TMI Blog1997 (5) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... n. It was claimed that during the assessment of income-tax for the accounting year 1975-76, he had supplied full information regarding the financial position, and now there is no ground for reopening of the assessment. It is submitted that mere change of opinion of the subsequent Income-tax Assessing Officer would not justify reopening of the assessment. On behalf of the respondents, it was submitted that by issuance of various orders in the form of a notification, the jurisdiction has been conferred on the officers as mentioned in the said orders and, therefore, the notice issued under section 147 of the Income-tax Act was quite proper and correct. It was submitted that the issuance of notice was under clause (a) of section 147 of the Income-tax Act, and not under section 147(b) as was wrongly assumed by the petitioner. My attention was also invited to the reasons that preceded the issuance of notice under section 147(a) of the Income-tax Act. It was submitted that after the assessment of the year 1975-76 was over, it came to the notice of the assessing authority that the petitioner had undervalued the closing stock of raw material, and thereby concealed the income. It was claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner and the Income-tax Officer. While conferring such jurisdiction, it is not obligatory that the assessee should be heard. The hearing of the assessee is contemplated only where as per sub-section (3) of section 125A of the Income-tax Act, instructions to be observed by the Income-tax Officer are issued. In that case such instructions prejudicial to the assessee shall not be issued without affording him an opportunity of being heard. In view of the orders issued by the Income-tax Commissioner, I find that the Inspecting Assistant Commissioner has jurisdiction to issue the notice in question. In the context of it, it also be noted that conferring jurisdiction under sections 125 and 125A of the Income-tax Act, should not be confused with the powers to transfer cases under section 127 of the Income-tax Act. In the present case, there is conferment of the jurisdiction, and not the transfer of a case. I, therefore, find no substance in the submission that the notice was by the authority having no jurisdiction. The next point raised pertains to the legality and propriety of issuance of notice under section 148 of the Income-tax Act. Such notice is issued in view of section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In that connection, my attention was invited to annexure P-2, which pertains to the notice dated May 7, 1977, from the Income-tax Officer to the petitioner, whereby he was called upon to supply details in respect of various items including the full details of the finished goods, raw material and goods in process as on March 31, 1975, along with the value, and the basis for such valuation. In response to that the petitioner replied, vide annexure P-3 dated July 23, 1977. In respect of the details regarding the closing stock referred to above, he has stated that he has attached details by separate annexure. These details are at annexure P-4. While giving the details of such closing stock he has mentioned by way of caption to the details that the basis of valuation is on cost price or market price whichever is lower. Figures showing the quantity of the stock and the amount of its value are mentioned. Pertinent to note that it does not clarify as to the method by which the closing stock of the raw material has been valued as mentioned in annexure P-4. Non-disclosure on such aspect was found to be one of the reasons for issuance of notice. Annexure R-1 attached with the written statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act. A perusal of that section indicates that whenever the Income-tax Officer has reason to believe that the income has escaped assessment by reason of the omission or failure on the part of the assessee (a) to make a return under section 139 of the Income-tax Act, or (b) to disclose fully and truly all material facts necessary for his assessment (sic). The term "disclosure" mentioned in clause (a) of section 147 of the Income-tax Act has been further clarified as per Explanation 2. It clearly states that mere production before the Income-tax Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure within the meaning of that section. In view of that it is obvious that the petitioner cannot say that the issuance of notice under section 148 was bad in law because he has placed the account books and information before the Income-tax Officer. In the context of this my attention was invited to Indo-Aden Salt Mfg. and Trading Co. P. Ltd. v. CIT [1986] 159 ITR 624 (SC). In that case, their Lordships, while repelling the contention that the Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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