TMI Blog2005 (5) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... acts. There is no duty cast on the assessee to indicate or draw the attention of the Income-tax Officer to what factually or legally or other inferences can be drawn from the primary facts - it is held that there was no failure on the part of the assessee in disclosing the primary facts and, therefore, the initiation of proceeding under section 17(1)(a) was not justified. - - - - - Dated:- 5-5-2005 - Judge(s) : R. K. AGRAWAL., RAJES KUMAR. JUDGMENT The judgment of the court was delivered by Rajes Kumar J.- The Income-tax Appellate Tribunal, Allahabad, has referred the following question under section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act") relating to the assessment years 1970-71 to 1976-77 for opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reference arising out of the proceedings relating to the assessment years 1957-58 to 1959-60 was made to this court which was disposed of by this court vide order dated September 10, 1970, which is reported in Chintamani Ghosh Trust v. CWT [1971] 80 ITR 331. In the said reference this court held that 15 per cent, reserve and 15 per cent, of sewa puja were to be assessed under section 21(4) of the Wealth-tax Act, and the allowances called "A" and "B" were to be assessed under section 21(4) of the Act and the remaining part under section 21(4) of the Act for the assessment year under consideration. The assessee filed the return giving complete details of the allocation of the income of the trust deed. However, the assessing authority has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hon'ble High Court and it cannot be held that it was ignorant of the same and it was the duty of the assessee to bring the order of the High Court to the notice of the Revenue. The Tribunal, accordingly concluded that it cannot be held that the assessee had suppressed material information and there was failure on his part to disclose material facts. The Tribunal accordingly held that the provision of section 17(1)(a) of the Act was not valid. The Tribunal, however, restored the matter to the file of the Appellate Assistant Commissioner to examine whether the requisite conditions for the purpose of reopening the proceedings under section 17(1) (a) of the Act were satisfied or not. We have heard Sri Shambhu Chopra learned standing coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said material. In the reference case, decided by the Allahabad High Court, the Revenue was also the party and it was the duty of the assessing authority to apply the decision of the High Court and in case he failed to apply the said decision while passing the original assessment order, it cannot be said that the assessee had failed to disclose the primary material facts. It is a settled principle of law that the responsibility of the assessee is limited to the extent of disclosure of all primary material facts and nothing beyond that vide Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC). Once the assessee has disclosed all the primary facts that is the end of his duty. It is then for the assessing authority to draw the proper concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hildren of the assessee in her total income in the original assessment. Proceeding under section 147(1) of the Income-tax Act was initiated. The Karnataka High Court held that the formation of belief must have a nexus to the failure of the assessee to disclose true and full particulars, it is sufficient if the assessee has disclosed all the primary facts and any further enquiry or investigation that is called for should be done by the Income-tax Officer. If the Income-tax Officer failed to make any enquiry or investigation, it was the failure of the part of the Income-tax Officer rather than the assessee, the proceeding under section 147(1) (a) of the Act has been accordingly quashed. In the case of CIT v. Gujarat Ginning and Manufacturin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Liquidator, Mahmudabad Properties Ltd. v. CIT [1972] 83 ITR 470, that the subsequent Income-tax Officer changed his opinion. Thus, this clearly appears to be a change of opinion and it cannot be said that the income in this case had escaped assessment as a result of any failure or omission on the part of the assessee to disclose truly and correctly all the facts pertaining to its income. In the case of Associated Stone Industries (Kotah) Ltd. v. CIT [1997] 224 ITR 560, the hon'ble Supreme Court held that the duty of the assessee is only to disclose full particulars of material facts necessary for his assessment for the relevant year. The expression "material facts" in section 34(1)(a) of the Indian Income-tax Act, 1922 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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