TMI Blog1981 (1) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... ppears that there was a firm known as 'Bhagwati Prasad Ram Swarup' which carried on the business in supply of bidi and match boxes on wholesale basis. It is claimed that there was a partial partition in the HUF which carried on the business under the name style of Bhagwati Prasad Ram Swarup aforesaid. After the partition, the business was said to have been carried on in 'Partnership' between Ram Prasad and Smt. Kalavati, wife of late Shri Ram Swarup who was the elder brother of Ram Prasad. Smt. Kalavati died on 21-12-1975 and, thereafter, the business was done in partnership by Ram Prasad and one Shri Hardwari Lal (sister's son of Ram Prasad). The share income of Ram Prasad from the said business as well the income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter with the ITO except that the petitioner applied for extension of one month's time to file the income-tax returns in response to the impugned notices. However, without filing any income-tax returns, the petitioner filed this writ petition seeking quashing of the impugned notices on the grounds set out therein. 3. We have heard Shri Manish Mehrotra, the learned counsel who appeared for the petitioner. No one appeared on behalf of the respondents although a counter-affidavit had been filed on behalf of the respondents, to which no rejoinder affidavit is filed by the petitioner. 4. The learned counsel for the petitioner assailed the impugned notices on two short grounds. The first attack was that the income sought to be assessed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Assessing Officer with a power to assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, in respect of a given year subject to the fulfilment of requirements contemplated under that section. To confer a valid jurisdiction under section 147(a), two conditions are to be satisfied: firstly, the Assessing Officer must have reason to believe that income, profit, or gains chargeable to income-tax have escaped assessment; and secondly, he must have also reason to believe that such 'escapement' has resulted by reason of either (i) omission or failure on the part of the assessee to make a return under section 139 for that assessment year to the Assessing Officer or (ii) to disclose fully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al facts bearing on the assessment and consequent escapement of income from assessment and tax. 6. Now the term 'escaped assessment' includes both non-assessment as well as under-assessment. When a person, though liable to be taxed, has not been assessed to tax, there is an escapement. Further, although the same person may be taxed both as an individual and as a karta of a HUF, the two capacities are intrinsically different units of taxation under the Act. They are treated as different assessees for the purposes of the Act. The revenue authorities are not precluded from taking appropriate proceedings or to issue a notice for reassessment to another, merely because that income has been assessed in the hands of 'individual' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully and truly which are material for the relevant assessment year. What is a full disclosure of all relevant and material facts would depend upon the circumstances of each case. The argument that in the instant case, the petitioner had discharged the burden of making full and true disclosure when the account books of the firm were produced before the Assessing Officer during the course of the assessment proceedings of the firm, cannot be accepted as a valid one, particularly, in view of the provisions contained in Explanation 2 appended to section 147. The said Explanation reads: Production before the Assessing Officer of account books or other evidence from which material could with due diligence have been discovered by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the duty of the assessee to disclose it. The evidence which is produced by the assessee discloses only primary facts, but to interpret the evidence, certain other facts may be necessary. Thus, the question of status, agency, the benami nature of transaction, the notice of trading and like matters may not appear from the evidence produced, unless disclosed.... (p. 219) It follows from the dictum of the Supreme Court that the assessee cannot be exonerated from the duty to make a full and true disclosure of material facts by showing that the ITO could have in the original assessment proceedings found out correct factual affairs by probing into the material or evidence placed before him but he failed to do so. The second argument, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
