TMI Blog1986 (3) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had filed its return in November, 1962, showing an income of Rs. 2,092 as its profit. According to the assessee/appellant, mistake had occurred in the preparation of the return, inasmuch as a profit of Rs. 10,718,46 arising from construction work had been left out from the return. But, it appears that along with the original return, a copy of the balance-sheet and the profit and loss account was filed by the appellant. In the profit and loss account, the profit from the construction work was indicated. The Income-tax Officer made an assessment on November 27, 1963, and it appears from the assessment order that the profit from the construction work was taken into account in making the assessment. The assessee/appellant, however, filed a revised return showing a general profit of Rs. 2,092 as also profit from the construction work aggregating to Rs. 12,797. It is important in this connection to bear in mind that the return was filed by the assessee/appellant on November 29, 1962. This was received in the receiving section of the Department and a stamp had been duly put thereon in token of the receipt. It further appears that a revised return dated August 2, 1963, was received, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss account and the balance-sheet. After discussing the relevant provisions of law and other submissions urged on behalf of the assessee/appellant, the Division Bench dismissed the appeal and upheld the notice. Being aggrieved, the assessee/appellant has come up in appeal before this court by special leave. Before the position in law is discussed, it is necessary to bear in mind the factual position emerging from the documents. On behalf of the assessee/appellant, it was urged before us as it was urged before the Division Bench of the High Court that there was in this case no question of any escapement of income or underassessment of income because the profit from the construction work which was the item alleged to have been left out from the first return and included in the revised return was, in fact, taken into consideration by the Income-tax Officer in making the first assessment order. It was argued that this item of profit was not only before the Income-tax Officer as it was included in the profit and loss account but, in fact, it was taken into consideration by the said Income-tax Officer in making the order. The specific amount which provided the ground for the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present figures could be obtained by a process of back calculation with a view to reconcile the profit or income disclosed in the revised return with that disclosed in the balance-sheet. It is clear that the figures disclosed in the first return and the balance-sheet filed with it could not readily be reconciled with the profits disclosed in the revised return and the latter provided grounds for reason to believe that income chargeable to tax had escaped assessment. This reopening was under section 147 of the Act. Reopening under section 147 can only be made after completed assessment if the Income-tax Officer has reason to believe under clause (a) that by reason of omission or failure on the part of an assessee to make a return or to disclose fully and truly all relevant facts, income chargeable to tax has escaped assessment for that year and under clause (b), notwithstanding that there was no omission or failure on the part of the assessee, if the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment, then he is, subject to the provisions of limitation in respect of certain income, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Officer after completion of the assessment by the Income-tax Officer will not be any bar to the Income-tax Officer to issue notice for reopening of the assessment, if the other conditions are fulfilled. These principles are well settled. In CIT v. A. Raman Co. [1968] 67 ITR 11 (SC), dealing with section 147(b) of the Act, this court observed that even if the information which was obtained could have been gathered by the Income-tax Officer at the time of the original assessment, would not disentitle the Income-tax Officer to reopen the assessment if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information must come to the possession of the Income tax Officer after the previous assessment but if the information be of such a nature that it could have been obtained during the previous assessment or investigation of the materials but was not obtained, the Income-tax Officer was not precluded from reopening. In this case, it was contended that profit and loss account was there at the time of the original assessment and, therefore, the fresh information now relied upon could hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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