TMI Blog1993 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... h section 148 of the Act?" The brief facts of the case are that the assessment of the assessee was completed on December 22, 1973. In the said assessment, a cash credit of Rs. 20,000 appearing in the name of Shri Raoveer Vikram Singh was found. The said amount was not disclosed in the assessment year at all. Later on, the Income-tax Officer discovered from the statement of Shri Raoveer Vikram Singh that the cash credit of Rs. 20,000 was not genuine and, therefore, he was of the view that the income represented by the cash credit and interest claimed thereon by the assessee escaped assessment. The Income-tax Officer, therefore, initiated proceedings under section 147(a) read with section 148 of the Act. The notices were issued on July 24, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he apex court in Civil Appeal No. 1235 of 1977 (Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456), decided on July 13, 1993, wherein it has been held by the apex court that : "From the plain phraseology of sections 147, 148 and 149 of the Act, it appears that two conditions precedent which are required to be satisfied before an Income-tax Officer can acquire jurisdiction to proceed under clause (a) of section 147 read with sections 148 and 149 of the Act, beyond the period of four years but within a period of eight years from the end of the relevant year, are : (a) that the Income-tax Officer must have reason to believe that the income, profits or gains chargeable to tax had either been underassessed or had escaped assessment and (b) tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r further enquiry and investigation into the genuineness of the loan transaction but, in our opinion, his failure to do so and complete the original assessment proceedings would not take away his jurisdiction to act under section 147 of the Act, on receipt of the information subsequently. The subsequent information on the basis of which the Income-tax Officer acquired reasons to believe that income chargeable to tax had escaped assessment on account of the omission of the assessee to make a full and true disclosure of the primary facts was relevant, reliable and specific. It was not at all vague or non-specific". It has also been held that : "From a combined review of the judgments of this court, it follows that an Income-tax Officer acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d enable the Income-tax Officer to form a reasonable belief that the income of the assessee had escaped assessment in the earlier year. As a matter of fact, after the conclusion of the original assessment proceedings, there was no fresh material at all available with the Income-tax Officer in Burlop Dealers' case [1971] 79 ITR 609 (SC), which could have enabled the Income-tax Officer to entertain any reason to believe that the income of the assessee had escaped assessment for the assessment year 1949-50. An assessment order for a subsequent year could not by itself lead to any inference, much less to the formation of a reasonable belief that income chargeable to tax had escaped assessment in the previous year, on account of the failure on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor and the law laid down by the apex court, we are of the opinion that the subsequent information which had come to the knowledge of the Income-tax Officer was specific and relevant information and the Income-tax Officer had reason to believe that income, profits and gains chargeable to tax had escaped assessment to tax and that the escapement was occasioned by reason of omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. After giving the statement by the creditor the assessee was given opportunity to cross-examination which was not availed by the assessee and thus the said statement remained unrebutted and uncontroverted and as such the Income-tax Appellate Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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