TMI Blog1998 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... V Rs. 14,25,190--50 per 7,12,595.00 cent. ---------------------- Total depreciation 10,14,837.00 ---------------------- The assessment under section 143(3) of the Act was made on July 31, 1991. On the presumption that there is an apparent mistake from records rectifiable under section 154 of the Act, an order was passed on March 27, 1996, to rectify the mistake. An appeal was filed, inter alia, contending that there was no mandatory notice under section 154(3) of the Act. The Commissioner of Income-tax (Appeals) allowed the appeal and cancelled the rectification order on November 3, 1997 on the ground that it was invalid for want of notice and opportunity. Thereafter fresh proceedings were initiated by issuing a notice dated January 16, 1998, under section 154 of the Act and again another dated April 24, 1998, under section 148 of the Act proposing to reassess the income on the plea that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. The petitioner submitted a reply dated May 13, 1998, stating that the proceedings are time barred and invalid and also this petition under article 226 of the Constitution challenging the initiati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. In CIT v. Burlop Dealers Ltd. [1971] 79 ITR 609 (SC), following the decision in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC), the Supreme Court held that the assessee had disclosed his books of account and evidence from which material facts could be discovered. It was under no obligation to inform the Income-tax Officer about the possible inferences which may be raised against him. It was for the Income-tax Officer to raise such an inference and if he did not do so the income which has escaped assessment cannot be brought to tax under section 34(1)(a) of the 1922 Act. In ITO v. Lakhmani Mewal Dos [1976] 103 ITR 437 (SC), it was held by the Supreme Court in reference to the notice issued under section 148 that the duty which is cast upon the assessee is to make a true and full disclosure of the primary facts at the time of the original assessment. Production before the Income-tax Officer of the account books or other evidence from which material evidence could wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d now by the several authorities of this court and of several High Courts, there must be materials to come to the conclusion that there was 'omission or failure to disclose fully and truly all material facts necessary for the assessment of the year'. It postulates a duty on every assessee to disclose fully and truly all material facts necessary for the assessment. Therefore, the obligation is to disclose facts ; secondly, those which are material ; thirdly, the disclosure must be full and, fourthly, true. What facts are material and necessary for assessment will differ from case to case. In every assessment proceeding, for computing or determining the proper tax due from the assessee, it is necessary to know all the facts which help the assessing authority in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise, the assessing authority has to draw inferences as to certain other facts. But on the primary facts it is for the taxing authority is to draw inferences. It is not necessary for the assessee to draw inferences for him. See, in this connection, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection and concluded by the authorities of this court." This judgment is distinguishable on facts and cannot apply to the case on hand. In Renusagar Power Co. Ltd. v. ITO [1979] 117 ITR 719, a Division Bench of the Allahabad High Court relying on Kantamani Venkata Narayana and Sons v. First. Addl. ITO [1967] 63 ITR 638 (SC), held that even though an enquiry had been made by the Income-tax Officer at the time of the original assessment, still section 147(a) can be invoked if materials coming subsequently to the possession of the Revenue showed that the disclosure made by the petitioner was neither full nor true. Even in cases where the Income-tax Officer, if he had been circumspect, could have found out the truth from the books and other documents produced, he is not precluded from exercising the power to assess the income which has escaped assessment. It could not, therefore, be held that the non-disclosure of primary facts by the petitioner was not responsible for allowance of the rebate. In that case the claim of development rebate at the rate of 35 per cent. was held to be not justified. Admittedly, the petitioner in that case was not engaged in any manufacturing business an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is provided to be filed. The petitioner had claimed depreciation on plant and machinery. On eight items they have claimed depreciation at the rate of 33 1/3 per cent. In reference to 12 other items they have claimed at the rate of 50 per cent. The written down value as on March 31, 1988, and the written down value as on March 31, 1989, after claiming depreciation at the rate specified, were given in the statement. Therefore, the primary facts in support of their claim of written down value have been furnished. However, while working out the depreciation rate, instead of 33.33 per cent. for all items they have made a claim of 50 per cent. in reference to 12 items. This claim on the rate of depreciation cannot be held to be failure to disclose full and true material facts necessary for assessing, It cannot be stated that this is the duty of the assessee to point out that he had made a wrong claim in the rate of depreciation. The claim was made as the assessee understood as leviable, according to law. The material facts having been placed before the Assessing Officer it is the duty of the officer to draw inferences from those material facts disclosed. On his failure the burden cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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