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TMI Blog1971 (1) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, 1967. The Appellate Assistant Commissioner proceeded on the view that the notice under section 34(1)(a) had been issued on the basis that the petitioner had not disclosed fully and truly all material facts in respect of its property income, and, as that was incorrect, there was no jurisdiction in the Income-tax Officer under section 34(1)(a) and, therefore, he annulled the reassessment. Thereafter, it appears, the Income-tax Officer served a notice dated. July 14, 1967, issued under section 148 of the Income-tax Act, 1961, for the same assessment year. The learned counsel for the petitioner has raised a number of contentions before us. The first contention is that if the income now sought to be assessed can be said to have escaped assessment, it has done so, not by reason of any omission or default on the part of the assessee during the original assessment proceeding but because of the failure of the Income-tax Officer to take valid proceedings for reassessment under section 34 of the Act of 1922. The contention, it seems to us, is without substance. The income of an assessee can be said to escape assessment because of the failure of the Income-tax Officer to include it in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding of the Tribunal. It observed that the finding of the Tribunal that the Income-tax Officer had knowledge of the interest income as well as of the forest income at the time when the original assessment was made was binding upon him, and, therefore, it could not be said that the interest income had escaped assessment by reason of any failure or omission on the part of the assessee. In the present case, the facts are entirely distinguishable. Learned counsel then relied on Commissioner of Income-tax v. Hemchandra Kar. The assessee in that case was a Hindu undivided family consisting of six members. Following the demonetisation of high denomination notes in January, 1946, the assessee encashed notes of the value of Rs. 19,000 and five members of the family encashed notes of the aggregate value of Rs. 1,10,000. The Income-tax Officer reopened the assessment of the assessee and the individual members and made orders of reassessment including the sum of Rs. 19,000 in the hands of the family and the sum of Rs. 1,10,000 separately in the hands of the five individual members. Subsequently, he also issued a notice under section 34(1)(a) of the Act of 1922, for the purpose of including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47. 2. The Appellate Assistant Commissioner has annulled this assessment vide his order dated May 10, 1967, mainly on the ground that the assessment was not properly reopened under section 34(1)(a) of the income-tax Act, as the assessee has not failed to furnish the full particulars of his income in regard to the property income, and, therefore, there was no scope to reopen the assessment under section 34(1)(a). Since the assessment was reopened under section 34(1)(a) on the only ground of failure on the part of the assessee to disclose property income fully, which was not there, the Appellate Assistant Commissioner has annulled the assessment without considering the merits of the additions at all. 3. As it has been established during the proceedings under section 34(1)(a) that the assessee had concealed a sum of Rs. 1 lakh, there is a clear failure on the part of the assessee to disclose the particulars of his income fully and truly. Therefore, action under section 147(a) of the Income-tax Act, 1961, is clearly called for. 4. Sanction may kindly be accorded for initiating the proceedings under section 147(a) for assessing this concealed income in this year." The Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner. We have been referred to paragraph 34 of the petition. What were the material primary facts placed by the petitioner before the Income-tax Officer during the original assessment proceeding have not been set out in that paragraph. Learned counsel says that the names and addresses of the constituents who stored potatoes with the petitioner were placed before the Income-tax Officer and that amounted to a sufficient disclosure of the material primary facts. In our opinion, the disclosure of the primary facts must be a full and true disclosure. There is no doubt, as the Supreme Court has observed in Calcutta Discount Co. Ltd. v. Income-tax Officer, Calcutta that once the assessee has disclosed the material primary facts it is for the Income-tax Officer to arrive at the necessary inferences flowing from those facts and that it is not for the assessee to advise him what inferences to draw. We do not find anything in the observations made in that case to justify the contention now raised before us that even though the facts disclosed by the assessee may not be consistent with the true factual position in the case, the assessee can be said to have discharged his obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation to the facts of the present case. It is also pointed out that the notice under section 34(1)(a) of the Act of 1922 was issued on December 21, 1961, and the reassessment was contemplated by the order dated December 22, 1965, and that, therefore, inasmuch as the said proceeding under section 34 was pending on April 1, 1962, when the Income-tax Act of 1961 was brought into force, no proceeding could be taken under section 147 of that Act. We have been referred to section 297(2)(d)(ii). The provision reads as follows : " 297. Repeals and savings.- (1) The Indian Income-tax Act, 1922 (11 of 1922), is hereby repealed. (2) Notwithstanding the repeal of the Indian Income-tax Act, 1922 (11 of 1922), hereinafter referred to as the repealed Act)..... (d) where in respect of any assessment year after the year ending on the 31st day of March, 1940, . . . . (ii) any income chargeable to tax had escaped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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