TMI Blog1979 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... BHAGWATI. JUDGMENT The judgment of the court was delivered by BHAGWATI J.-- This appeal by certificate is directed against an order passed by a Division Bench of the High Court of Calcutta allowing an appeal against a decision of a single judge dismissing the writ petition of the respondent. The facts giving rise to the appeal may be briefly stated as follows : The respondent was assessed to income-tax for the assessment year 1959-60 and certain interest paid by the respondent to creditors from whom it claimed to have borrowed monies on hundis, was allowed as deductible expenditure. The assessment of the respondent was completed on 23rd August, 1960. On or about 25th January, 1968, however, a notice was issued by the ITO und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use great prejudice to the interests of the revenue and would frustrate the object of reopening the assessment. This was obviously an untenable stand because the existence of reason to belief on the part of the ITO was a justiciable issue and it was for the court to be satisfied whether in fact the ITO had reason to believe that income had escaped assessment by reason of failure of the respondent to make a full and true disclosure. The ITO realising this position filed a further affidavit on 27th January, 1970, stating as follows : " In January, 1968, I was the Income-tax Officer, 'I' Ward, Hundi Circle, Calcutta. On or about the 25th January, 1968, I issued a notice under section 148 of the Income-tax Act, 1961, on the petitioner. My rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of which it could be said that the ITO had reason to believe that any part of the income had escaped assessment by reason of such failure on the part of the respondent. The Division Bench, accordingly, allowed the writ petition and quashed and set aside the notice for reopening the assessment. The ITO thereupon preferred the present appeal to this court after obtaining a certificate from the High Court. The present case is clearly covered by the decision of this court in CIT v. Burlop Dealers Ltd. [1971] 79 ITR 609 (SC). There the assessee in the course of its original assessment to income-tax for the assessment year 1949-50 had produced a partnership agreement with one Ratiram Tansukhrai and claimed that the profits earned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This contention was negatived by the ITO and the income of the assessee was reassessed by adding Rs. 87,937 to the income returned by the assessee. The AAC confirmed the order of the ITO on appeal, but on further appeal, the Tribunal accepted the contention of the assessee and held that there was no failure on the part of the assessee to make a full and true disclosure of the material facts and, hence, the ITO was not justified in seeking to reopen the assessment under s.34(1)(a) of the I.T. Act. The revenue applied to the Tribunal for a reference but the application was rejected and the High Court also dismissed the application of the revenue for calling for a reference from the Tribunal. The revenue thereupon preferred an appeal to this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dealers' case [1971] 79 ITR 609 (SC) and the present one and the language of s. 147(a) being identical with that of s. 34(1)(a) the ratio of the decision in Burlop Dealers' case must govern the decision of the present case. We must, therefore, hold that there was no failure on the part of the respondent to disclose fully and truly all material facts necessary for its assessment and the condition for the applicability of s. 147(a) was not satisfied. We may also point out that though it was contended in the writ petition that the ITO could have no reason to believe that any part of the income of the respondent had escaped assessment by reason of its failure to make a full and true disclosure of material facts, the ITO did not disclose in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
