9911796707
TMI Blog1969 (2) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The petitioner's case is that be was a partner during the accounting year 1957-58 of two registered partnership firms, and the petitioner was the financing partner of the said firms, having the special responsibility of arranging finances for the said firms by way of loan, whenever required. The petitioner was all along assessed to tax and during the assessment year 1958-59, a return was filed showing the income received by the petitioner in his shares from the partnership firm. In response to the notice issued under section 23(2) of the Income-tax Act, 1922, the petitioner appeared before the Income-tax Officer through his pleader and produced account books, bank pass books and other evidence in support of the return filed. He also produced a statement showing the amounts taken on loan by the petitioner from different hundi dealers during the accounting year 1957-58. He usually made a prayer before the income-tax authority to deduct the interest already paid to them. It is stated that he disclosed and produced all evidence and materials necessary for the purpose of assessment of the year in question, truly and fully before the Income-tax Officer at Gauhati and after he was sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh their intelligence department got the information about the method of evading tax by introducing some hundi bankers and after strenuous efforts the Government was able to make out a list of such hundi bankers, who lend their names to be shown as lenders in the accounts of the tax dodgers without advancing any money as loan in fact. Further it appears therein that some of the hundi bankers admitted that they were merely name lenders to enable tax dodgers to introduce their secreted profits in the books of accounts. In our opinion the respondent not having disclosed any specific facts connected with the assessee about the said allegations and not having actually denied the averments made in paragraphs 1 to 7 of the petition, the principal fact remains unchallenged that all disclosures were truly and fully made before the income-tax authorities, at the time of the assessment during the relevant assessment year. We will again point out that there is a clear statement of fact in the petition that books of accounts were produced before the income-tax authorities and along with them a statement showing the amount taken on loan by the petitioner from different hundi dealers during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts beyond the period of four years, but within a period of eight years, from the end of the relevant year, two conditions have therefore to be satisfied. The first is that the Income-tax Officer must have reason to believe that income, profits or gains chargeable to income-tax have been under-assessed. The second is that he must have also reason to believe that such under-assessment has occurred by reason of either : (i) omission or failure on the part of an assessee to make a return of his income under section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year. Both these conditions are conditions precedent to be satisfied before the Income-tax Officer could have jurisdiction to issue a notice for the assessment or reassessment beyond the period of four years, but within the period of eight years from the end of the year in question. " This apart, it appears from the said decision that the expression " material facts " refers only to primary facts and the duty of the assessee is only to disclose primary facts and he has not also to indicate what factual or legal inference should pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this clause really a fetter is put upon the jurisdiction of the Income-tax Officer for embarking upon a proceeding beyond four years from the date of the last assessment. Clause (b) of section 147 of the Act provides : 147. If- (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153 assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year). " In this connection Mr. Bhattacharjee has referred us to another decision of the Supreme Court in Commissioner of Income-tax v. A. Raman and Co. It has been held, inter alia, in this case that : " By adopting a device, if it is made to appear that income which belonged to the assessee bad been earned by some other person, that income may be brought to tax in the hands of the assessee, and if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er that the Income-tax Officer did not apply his mind, whether he should have resorted to section 147(a) of the Act and the issue of notice ought not to have been embarked upon on a fishing enquiry. The next question for consideration is whether this court can exercise its jurisdiction under article 226 of the Constitution. We are of the view that, if the Income-tax Officer has reason to believe, in the circumstances as stated in section 147 of the Act, that income has escaped assessment and within his jurisdiction he honestly acts on such belief, this court will not exercise its jurisdiction under a writ petition ; nor will the court quash by a writ of certiorari an order of assessment made under this section merely because it is erroneous on points of fact or law. But if the Income-tax Officer initiates proceedings under this section after the period of limitation has expired or proposes to make an assessment after issuing a notice which is invalid, as found by us in the instant cases or it was not served in accordance with law or seeks to recover tax under assessment orders which were made without or in excess of the jurisdiction, a writ of certiorari, or prohibition or other a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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