TMI Blog1993 (3) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... as : (1) Income-tax Reference No. 535 of 1980 as a reference in respect of the assessment year 1966-67, and (2) Income-tax Reference No. 535A of 1980 as a reference in respect of the assessment year 1967-68. As the questions which are referred are identical, both these references are heard together and disposed of by this common judgment. The questions which have been referred to this court are as under: "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that by reason of the omission or failure, if any, on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, the income chargeable to tax did not escape assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se godowns were in the occupation of the assessee and, therefore, while submitting the returns of its income, the assessee did not compute the annual letting value so far as those godowns were concerned and also claimed deduction of municipal taxes in respect of them. The Income-tax Officer accepted the computation made by the assessee in this behalf and completed the assessment on that basis on February 25, 1970, and January 25, 1971, respectively. Subsequently, in view of the decision of the Calcutta High Court in Liquidator, Mahmudabad Properties Ltd. v. CIT [1972] 83 ITR 470, the Income-tax Officer issued notice under section 148 read with section 147(a) of the Act and reopened the assessments for those years. He revised the income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Revenue could not forcefully contend before us that the view taken by the Tribunal is erroneous. He only made a feeble attempt to show that, as the assessee had not disclosed the correct facts, income had escaped assessment. The law on the point is now very clear. As pointed out by the Full Bench of this court in Poonjabhai Vanmalidas and Sons (HUF) v. CIT [1974] 95 ITR 251 (at page 274): "Whenever action of the Income-tax Officer in issuing the notice under section 34(1)(a) is challenged before a court of law, the court has to ask itself the question whether in fact there are reasonable grounds for the Income-tax Officer to believe that there had been non-disclosure as regards any fact which could have a material bearing on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to what he contends for or contrary to what he has written in his books of account. In certain circumstances, the question whether particular transaction is genuine or not is an inference to be drawn from primary facts. If the assessee has disclosed primary facts relevant to the assessment, he is under no obligation to instruct the Income-tax Officer about the inference which the Income-tax Officer may raise from those facts. Further, where, on the evidence and material produced at the time of the original assessment, the Income-tax Officer could have reached conclusion other than the one which he has reached, the proceeding under section 34(1)(a) will not lie merely on the ground that the Income-tax Officer had earlier raised an inference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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