TMI Blog2002 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 148 read with section 147(a) of the Income-tax Act on the ground that the assessee has failed to disclose material facts. Accordingly, we answer the question in the affirmative and in favour of the assessee. - - - - - Dated:- 28-11-2002 - Judge(s) : S. H. KAPADIA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by J.P. DEVADHAR J.- In this income-tax reference, relating to the assessee's assessment year 1966-67, the following seven questions have been referred by the Tribunal at the instance of the Revenue, for the opinion of this court under section 256(1) of the Income-tax Act, 1961: "1. Whether, on the facts and in the circumstances of the case, the assessee-company not having filed the particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered for the computation of capital gains but only the fair market value of the assets handed over to the assessee as compensation as on the date of transfer? 7. Whether, on the facts and in the circumstances of the case, and in the absence of evidence of the market value as on January 1, 1954, of the assets transferred, the Tribunal was right in law in directing that for the computation of chargeable capital gains, such market value should be taken as claimed?" At the hearing of the reference, Mr. R.V. Desai, learned senior counsel appearing for the Revenue, fairly stated that the principal issue involved in this reference, is the validity of the reopening of the assessment proceedings under section 147(a) read with section 148 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the assessee to disclose material facts. According to the Revenue, apart from the surplus agricultural lands, the State Government had acquired structures and non-agricultural assets belonging to the assessee which were not disclosed by the assessee in its return for the assessment year 1966-67. According to the Revenue, the compensation received by the assessee from the State Government on transfer of the said agricultural assets (other than agricultural lands) were liable for capital gains tax and on account of the failure on the part of the assessee to disclose the above facts, there was escapement of income. Action under section 147(a) of the Income-tax Act, was therefore, initiated to bring to tax the escaped income under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals). By his order dated February 28, 1980, the Commissioner of Income-tax (Appeals) held that there was no failure or omission on the part of the assessee to disclose fully and truly all material facts for the purpose of the assessment and accordingly held that the reopening of the assessment was without jurisdiction. On further appeal filed by the Revenue, the Income-tax Appellate Tribunal by its order dated July 22, 1981, confirmed the order of the Commissioner of Income-tax (Appeals). Hence, this reference at the instance of the Revenue. Mr. Desai, learned senior counsel appearing on behalf of the Revenue drew our attention to Explanation 2 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial facts and the assessee must disclose particular portions of documents which are material. It is held in the aforesaid cases that failure on the part of the assessee to disclose material facts would empower the Assessing Officer to reopen the assessment under section 148 read with section 147(a) of the Income-tax Act. In the light of the aforesaid decisions, the issue that arises for our consideration is, in the facts and circumstances of the present case, whether, there was failure on the part of the assessee to disclose material facts? The finding of fact recorded by the Tribunal in para. 5 of its judgment is that the balance-sheet of the assessee contained in an annual report relevant for the assessment year 1966-67 disclosed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to the State Government. Under the circumstances, in the facts of the present case, we are of the opinion that the Tribunal was justified in holding that all the primary facts were disclosed by the assessee and that there was no failure on the part of the assessee to disclose fully and truly all the material facts. We, accordingly, hold that the reopening of the assessment could not be initiated under section 148 read with section 147(a) of the Income-tax Act on the ground that the assessee has failed to disclose material facts. Accordingly, we answer question No. 4 referred, in the affirmative and in favour of the assessee. In the light of our answer to question No. 4 in the affirmative and against the Revenue, the remaining six q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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