TMI Blog1985 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... the total income of the above assessee, the income ostensibly earned by a firm known as Preetpal Singh and Company. It is the correctness of these reassessments that is being challenged in these references. Preetpal Singh Co. was constituted as a firm under a partnership deed dated December 7, 1961. The partners were said to be Smt. Satwant Kaur (mother of Shri Sohan Singh), Shri Preetpal Singh, Shri Harvinder Pal Singh and Km. Kamal Anand (minor children of Shri Sohan Singh) and Shri Surinder Singh Kohli. Under the instrument of partnership, Shri Surinder Singh Kohli was entitled to a 10% share in the profits and losses of the firm. The balance of 90% was to be shared equally by Smt.Satwant Kaur and the minor children admitted to the benefits of the partnership when there were profits, but to be borne entirely by Smt. Satwant Kaur in the event of the firm making losses. The business of the firm was to deal in shares and other commodities on forward transactions or otherwise as agreed to between the partners. On February 27, 1967, Smt Satwant Kaur died. The firm was thereafter reconstituted under an instrument of partnership dated May 25, 1967. By this time, Shri Preetpal Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n brokers Shri Bhagwan Dass Gupta, Shri P. S. Khambate Co. and Shri H. P. Mehta. He also recorded a statement of Shri Hindpal Singh, an employee of Shri Sohan Singh. Ultimately, he came to the conclusion, for the reasons set out in a detailed order passed in relation to the assessment year 1963-64, that Preetpal Singh and Company was only benami concern of Shri Sohan Singh himself and that Shri Sohan Singh was the beneficial owner of the income said to have been earned by the firm. He, therefore, included the income which had been assessed (protectively) in the name of Preetpal Singh and Company by the officer assessing the firm in the total income of Shri Sohan Singh. Similar orders were passed in relation to the assessment years 1964-65 to 1969-70. The appeals of Shri Sohan Singh against these assessment orders having been rejected by the Appellate Assistant Commissioner as well as the Appellate Tribunal, the following two questions of law have been referred to this court at the instance of the present assessee, Shri Sohan Singh : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the Income-tax Officer validly assumed jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and truly all material facts necessary for his assessment for the years in question. No doubt, the Income-tax Officer assessing the present assessee acted on the information provided to him by the Income-tax Officer assessing the firm, but this information, the details set out in the assessment order, as well as the evidence recorded by the said officer led the Income-tax Officer assessing Shri Sohan Singh to believe that the income had escaped assessment by reason of the omission or failure on the part of Shri Sohan Singh to disclose fully and truly the material facts necessary for his assessment for the years in question. The information provided to the Income-tax Officer clearly led him to believe that the income in question was that of Shri Sohan Singh and since Shri Sohan Singh had not disclosed either the existence of the business or the details of the income therefrom, he had withheld material facts necessary for his assessments. As pointed out by the Tribunal, this is a case of the type considered by the Supreme Court in the case of Malegaon Electricity Co. P. Ltd. v. CIT [1970] 78 ITR 466. The conclusion in the reassessment on merits is a very material aspect relevant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion that the said firm was a genuine firm and had completed an assessment on it as a registered firm, that conclusion cannot stop the Income-tax Officer assessing a different assessee, namely, Shri Sohan Singh, from reaching a conclusion on the facts before him that the income allegedly earned by the firm was really the income of Shri Sohan Singh, There can be no estoppel of one authority or officer consequent on conclusions on fact arrived at by another Officer. But that apart, in the present case, there is no basis at all for any claim of estoppel because even the Income-tax Officer assessing Preetpal Singh and Company did not really come to the conclusion that it was a genuine firm. In fact, he came to the conclusion on the materials before him that the firm was not genuine and that it had been merely put up to screen the profits of Shri Sohan Singh and to avoid proper assessments thereon. However, that the Income-tax Officer was assessing the firm and in spite of his conclusion that the income really belonged to Shri Sohan Singh, he considered it necessary to make protective assessment on the firm itself. Such a protective or precautionary assessment has the sanction of law, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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