TMI Blog1993 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... t was confirmed by the Tribunal. It was, however, deleted in consequence of the opinion of the High Court in reference. As a result, the income, as originally assessed by the Income-tax Officer, stood final. The fact of enhancement of the income of the assessee by the Appellate Assistant Commissioner and the ultimate deletion of the enhancement has been mentioned only to complete the narration of facts though it is not relevant in view of the admitted position that none of the amounts for which the proceedings had been initiated under section 147(a) of the Act was the subject-matter of enhancement by the Appellate Assistant Commissioner. Similarly, the assessment for the assessment year 1966-67 was also completed under section 143(3) of the Act and the income of the assessee was determined at Rs. 2,73,150. Later, in the course of assessment proceedings for the assessment year 1967-68, one of the partners of a firm, Messrs. Madhusudan Gordhandas, in whose name some loans stood in the books of account of the assessee was examined by the Income-tax Officer. In his examination, the said partner deposed before the Income-tax Officer, inter alia, that the loans to the extent of Rs. 4,50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot at all genuine. In his opinion, in such a case, it cannot be said that the assessee had made a full and true disclosure of the material facts at the time of the original assessment which he was required to do. The Appellate Assistant Commissioner also noted the fact that the said partner of Messrs. Madhusudan Gordhandas was even subjected to cross-examination by the assessee but he stood the cross-examination well. The Appellate Assistant Commissioner also took note of the fact that despite the above statement on oath given by the partner of the firm in regard to the bogus nature of the loan, the assessee himself did not enter the witness box to give any counter evidence on oath. Considering the totality of the facts and circumstances of the case, the Appellate Assistant Commissioner arrived at a finding that the Income-tax Officer had rightly reopened the assessment in question under section 147(a) of the Act and was justified in reassessing the income of the assessee. He, therefore, upheld the action of the Income-tax Officer and confirmed the order of reassessment passed by him. Further appeal by the assessee to the Tribunal was also dismissed. Hence this reference under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajrang Lal v. ITO [1993] 203 ITR 456; [1993] 3 Scale 180. The Supreme Court in the above case had occasion to interpret the expression "true and full" disclosure. In the case before the Supreme Court, as in the present case, the Income-tax Officer, subsequent to the completion of the original assessment proceedings, on making an enquiry from the jurisdictional Income-tax Officer at Calcutta, learnt that the Calcutta company from whom the assessee claimed to have borrowed the loan of Rs. 50,000 in cash, had not really lent any money but only its name, to cover up a bogus transaction and after recording his satisfaction as required by the provisions of section 147 of the Act, proposed to reopen the assessment proceedings. It was contended by the assessee that he had disclosed the material facts in regard to the loan at the time of the original assessment and it was for the Income-tax Officer to draw the correct inference therefrom. It was not for the assessee to state as to what inferences could be drawn by the Income-tax Officer from such facts. The Supreme Court observed: "The present is thus not a case where the Income-tax Officer sought to draw any fresh inference which could h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et away by wilfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say 'you accepted my lie, now your hands are tied and you can do nothing'. It would be a travesty of justice to allow the assessee that latitude." In the above decision, the Supreme Court has discussed its earlier decision in Calcutta Discount's case [1961] 41 ITR 191 and Burlop Dealers' case [1971] 79 ITR 609. The Supreme Court also explained its earlier decision in Burlop Dealers' case [1971] 79 ITR 609 and observed: "The judgment in Burlop Dealers' case [1971] 79 ITR 609 (SC), cannot be understood as laying down any such proposition that even where the Income-tax Officer gets some fresh information which was not available at the time of the original assessment, subsequent to the conclusion of the original assessment proceedings, which enables him to form a reasonable belief that the income of the assessee had escaped assessment because of the omission or failure of the assessee to disclose true and full facts during the assessment proceedings, he cannot reopen the assessment. The observations in Burlop's case [1971] 79 ITR 609 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the decisions of the Supreme Court in Mattulal v. Radhe Lal, AIR 1974 SC 1596, and Union of India v. K. S. Subramanian, AIR 1976 SC 2433, in support of this contention. We have considered the above submission. We, however, do not find any merit in the same. The question of following a larger Bench judgment against a smaller Bench judgment can arise only where there is a conflict between the two decisions. Such is not the case here. In Calcutta Discount's case [1961] 41 ITR 191, the Supreme Court was required to consider the true meaning of the expression "material facts" used in sub-section (1)(a) of section 34 of the Indian Income-tax Act, 1922 (corresponding to section 147(a) of the Act). The Supreme Court held that the expression "material facts" refers only to primary facts. So far as the primary facts are concerned, it was the assessee's duty to disclose all of them including particular entries in account books, particular portions of documents, and documents and other evidence which could have been discovered by the assessing authority, from the documents and other evidence disclosed. The duty did not extend beyond the full and truthful disclosure of all primary facts. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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