TMI Blog1996 (8) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of the returns filed under section 139(1) of the Income-tax Act, 1961 (for short, " the Act "). The assessee had shown income by way of commission at Rs. 51,661. An addition of Rs. 25,000 to the assessee's income was, however, made by the Income-tax Officer on the ground that quantitative details regarding the sales had not been shown and, therefore, addition was required to be made in the trading account. This addition was, however, deleted in appeal, vide order dated January 22, 1977. The Income-tax Officer, while processing the case of the assessee during the assessment proceedings for the assessment year 1978-79, noticed that commission had been charged by the assessee at more than four per cent. whereas the usual rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee could not be charged with the suppression of any material facts regarding income by way of commission. It is also stated that the period of limitation was four years in a case where notice was issued under clause (b) of section 147 of the Act. The said clause empowers the Assessing Officer to issue a notice to an assessee where, in consequence of information in his possession, the Income-tax Officer has reason to believe that income chargeable to income-tax had escaped assessment for any assessment year. It is stated that the case of the assessee did not also fall under clause (a) of section 147 of the Act because the assessee had disclosed all the relevant and material facts at the time of regular assessment and, therefore, it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, standing counsel for the respondents, that the assessee had no reason to invoke the extraordinary jurisdiction of this court and had an opportunity to appear before the Assessing Officer and to show that he had not suppressed any sales. The plea of the assessee that sometimes commission in excess of the usual rate of four per cent. had also been charged for rendering certain other services to the principals, can be examined by the Income-tax Officer at the time of reassessment. Therefore, the entire question is open to detailed examination during the assessment proceedings and, for that reason, the writ petition must be rejected. The case put forward by the petitioner does not make out a case in its favour. Whatever was detected during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed, exposing the untruthfulness of such facts. In the present case also, the Income-tax Officer entertained a belief that the assessee had adopted a modus operandi to suppress the excess sales made in the course of business on own account. Commission was chargeable at the rate of four per cent. but, since excess commission had been shown, it led to a belief that the assessee had done certain business outside the books of account. In State Bank of Patiala v. CBDT [1994] 207 ITR 190 this court had again an occasion to examine a matter regarding the issuance of notice under section 147(a) of the Act. It has been observed therein that where proceedings for reassessment are initiated under section 147(a) of the Act, there must be materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso charged, needed examination. It is, therefore, open to the petitioner to explain that whatever income had been shown by way of commission, that was based on the disclosure of material facts fully and truly and the presumption that the excess commission charged represented the excess sales not disclosed in the books of account was not well-founded. The plea of the petitioner that the notice could not be issued under clause (a) of section 147 also does not appear to be correct in the light of above facts. Prima facie, the Income-tax Officer had reason to believe and to form an opinion that the assessee had not disclosed fully and truly all the material facts. Therefore, the period of limitation would be eight years from the end of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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