9911796707
TMI Blog1969 (12) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... l material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (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.... Explanation (2).- Production before the Income-tax Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure within the meaning of this section. " The petitioner is a company carrying on the business, inter alia, of financing hire purchase of automobiles. For the assessment years 1959-60, 1960-61 and 1961-62 the petitioner was duly assessed by the Income-tax Officer, " I " Ward, Companies District I, Calcutta, and in making these assessments the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had filed its, books of account, profit and loss accounts and its balance-sheets for the relevant accounting years and had disclosed all facts material for its assessment. At the time of the original assessments the petitioner made the claim before the Income-tax Officer that it had paid Rs. 5,000 to Messrs. Purushottam Chowbey & Co. in each of these years as financial commission and this claim had been accepted by the assessing Income-tax Officer after due investigation. There had been no failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment and the action of the respondent-Income-tax Officer in taking proceedings under section 147(a) was not justified in law. Mr. Chowdhury, the learned counsel for the respondents, submitted that, as it was the assessee duty to disclose fully and truly all facts necessary for its assessment, it should have disclosed the fact that the payment of the amount to Messrs. Purushottam Chowbey & Co. was not related to any business assistance rendered by the latter to the petitioner and was as such not admissible as a deduction in the petitioner's assessments. Mr. Chowdhury drew my attention to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to the decision of the question before the assessing authority lies on the assessee. To meet the possible contention that when some account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income-tax Officer might have discovered, the legislature has put in the Explanation, which has been set out above ... His omission to bring to the assessing authority's attention those particular items in the account books, or the particular portions of the documents, which are relevant, will amount to 'omission to disclose fully and truly all material facts necessary for his assessment'. Nor will he be able to contend successfully that by disclosing certain evidence, he should be deemed to have disclosed other evidence, which might have been discovered by the assessing authority if he had pursued investigation on the basis of what has been disclosed. . . Does the duty, however, extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and served long after the expiry of four years from the end of the relevant assessment year, the notices are invalid and should be quashed. Apart from relying on the observations of the Supreme Court in Calcutta Discount Co.'s case already quoted, viz., that mere production of books of account is not enough disclosure on the part of the assessee and the assessee is not entitled to argue that it might have been possible for the Income-tax Officer to discover the true facts if he had pursued investigation on the basis of what had been disclosed. Mr. Chowdhury also referred me to another decision of the Supreme Court in Kantamani Venkata Narayana & Sons v. First Additional Income-tax Officer, Rajahmundry. But in this latter case the Supreme Court merely reiterated what they had stated in Calcutta Discount Co.'s case. The whole point, therefore, boils down to this : Whether it was the duty of the petitioner to disclose at the time of the original assessment not only the fact that it was claiming an allowance of Rs. 5,000 as payment made to Messrs. Purushottam Chowbey & Co. as financing commission but was also under an obligation to disclose that the latter firm did not render any se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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