TMI Blog2002 (3) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... .5,51,700. In the course of assessment, the Assessing Officer had noticed that the following shortages were discovered by the sales tax authorities on the basis of a raid conducted by them on November 6, 1985. (1) shortage of 2,068.600 litres of arrack; (2) difference of 1,223 litres in the stock of vinegar; (3) unaccounted purchases of 60,230 litres of arrack from April 1, 1985, to October 30, 1985, from slips recovered. The Sales Tax Department had proceeded to add a sum of Rs.42,71,520 on account of suppressed sales being the sale value of the above 1,06,760 litres of arrack at Rs.40 per litre. This issue was agitated by the assessee. This was disputed and was pending at the time of income-tax assessment proceedings before the Agricultural Income-tax and the Sales Tax Appellate Tribunal. The Tribunal set aside the above addition of Rs.41,30,060 being the value of the abovesaid liquor made on the ground of suppression. The Income-tax Assessing Officer was aware in the course of the original assessment proceedings itself the claim with respect to the suppressed income. But nevertheless acting on the finding of the Sales Tax Appellate Tribunal he did not add any amount on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --------------------------------------------- The material part of section 147 reads as under: "147. Income escaping assessment.--If the Assessing Officer has reason to believe that any 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 and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating body. An assessee has a right to be heard and the decision of the officer affects the right to property of the assessee. It means, in the decision making process there is an element of weighing and sifting of evidence tendered before him or collected by him and coming to his own conclusion. By providing of appellate forum, to examine the correctness thereof, which decision is ultimately subject to scrutiny of this court, the statute has provided an inbuilt mechanism to assess the correctness of the decision, the decision making process and the decision arrived at. It is hence clear that the officer does not do what he likes merely because he is minded to do so but does only what he ought to do. If so, if with all the materials made available to the officer concerned, he draws an inference and such inference is proved to be wrong, can it be said that the same was due to the contribution of the assessee or due to failure on the part of the assessee to make a return under section 139 of the Act or due to the failure on his part to disclose fully and truly all material facts for making an assessment for that year? We are of the view that the answer should be in the negative. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say that the proviso to section 143 has any application to the present case. Similar is the view taken by the Supreme Court in Gemini Leather Stores v. ITO [1975] 100 ITR 1, wherein it is held that if the Income-tax Officer had all the material facts before him when he made the original assessment and if he drew a wrong inference on the basis of the facts available it cannot be treated as due to any default of the assessee. There their Lordships stated as under: "The law laid down in Calcutta Discount Co.'s case [1961] 41 ITR 191 (SC) has been restated in several subsequent decisions of this court: CIT v. Hemchandra Kar [1970] 77 ITR 1; CIT v. Bhanji Lavji [1971] 79 ITR 582 and CIT v. Burlop Dealers Ltd. [1971] 79 ITR 609 to name only a few. In the case before us the assessee did not disclose the transactions evidenced by the drafts which the Income-tax Officer discovered. After this discovery the Income-tax Officer had in his possession all the primary facts, and it was for him to make necessary enquiries and draw proper inference as to whether the amounts invested in the purchase of the drafts could be treated as part of the total income of the assessee during the relevant year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e formation of the requisite belief. It would be immaterial whether the Income-tax Officer, at the time of making the original assessment, could or could not have found by further enquiry or investigation, whether the transaction was genuine or not if, on the basis of subsequent information, the Income-tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and, therefore, income chargeable to tax had escaped assessment. The High Courts which have interpreted Burlop Dealers' case [1971] 79 ITR 609 (SC) as laying down the law to the contrary fell into an error and did not appreciate the import of that judgment correctly." In this case, the High Court had on June 9, 1989, set aside the order of the Sales Tax Appellate Tribunal. The Tribunal made the revised order on March 27, 1990. The period of four years to invoke power under section 143 de hors proviso expired on March 31, 1991. If that be so, the blame of the laches, if any, cannot be passed on to the assessee by invoking the proviso to section 143 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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