9911796707
TMI Blog2001 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment within the meaning of section 147 of the said Act. Briefly stated the case of the petitioner is that it is a partnership firm constituted by a deed dated March 31, 1995, comprising of N. Venugopal, his two sons V. Kanan and V. Prasanna and his niece E. Puspa--to carry on the business for execution of the contract works. V. Venugopal, one of the partners, was alone assessed to income-tax up to the assessment year 1994-95 in the status of an individual. The other partners had not been assessed as their income fell below the taxable limit. On August 23, 1999, the petitioner's residence-cum-business premises were invaded and the Income-tax Officer seized some books of account. On the next day, he recorded the statement on oath from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment registers, work order files, etc., but all those books of account were with his accountant, S. Balaji--who had gone to his native place in Chennai and in his absence it is not possible to produce them. He, however, promised to produce them within 10 to 15 days. The books of account and other documents found during the survey were rough and were unsystematic records of sundry payments. The rough books of account found were xeroxed and copies have been retained for cross-verification with regular books of account as and when they would be produced by the assessee. On January 12, 2000, the authorised representative of the assessee sought for the recorded reasons for issuance of the impugned notices. The same was not furnished because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , annexure1: "Notice under section 148 of the Income-tax Act, 1961. Dated, Khurda, the 31st August, 1999. To, M/s. Vishnu Borewell, At P.O. Nayagarh, Dist. Nayagarh. Whereas I have reasons to believe that your income chargeable to tax for the assessment year 1997-98 has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961, I, therefore, propose to reassess the income/recompute loss/depreciation allowance for the said assessment year, and I hereby require you to deliver to me within 30 days from the date of service of his notice, a return in the prescribed form of your income for the said assessment year." We may refer here to sections 147 and 148 of the Act which read as follows: "147. Income escaping as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the foregoing proviso. Explanation 2.--For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:-- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (c) where an assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason to believe" is stronger than the words "is satisfied". The belief entertained by the Assessing Officer should not be arbitrary or irrational. It must be reasonable. In other words, it must be based on reasons which are relevant and material. The court, no doubt, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the Assessing Officer in coming to the belief, but the court can certainly examine whether the reasons are relevant and have a bearing on the matters with regard to which he is required to entertain the belief before he can issue notice. If there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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