TMI Blog1984 (6) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 before the ITO, M-Ward, Indore, who, at the relevant time had the jurisdiction in respect of the petitioner, by his order dated December 23, 1972, completed the assessment of the petitioner against which no appeal was filed. Accordingly, the petitioner continued to file his return for the assessment year 1973-74, which was also completed on March 2, 1974. The petitioner similarly filed his return for the assessment year 1974-75 in which also he showed his share income from the said partnership firm. The ITO in the course of these assessment proceedings added an amount of Rs. 10,000 as income from alleged smuggling business of the petitioner which was challenged before the AAC of Income-tax who deleted that addition and the same was also upheld by the Tribunal on appeal by the Department on October 22, 1977 (annexure D). Mst. Hajjani Zulekhabai, who was the mother of the petitioner, died on February 1, 1979. During her lifetime, she was the owner of the house No. 2/2, Daulat Ganj, Indore, and also owned another house in the small town Amreli in the State of Gujarat. The rental income from these houses was the only source of income of the said Hajjani Zulekhabai. In pursuance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n January 20, 1979, holding that the ownership of the houses was not that of the petitioner and deleted the rental income from the assessments of the petitioner in respect of the said assessment years (annexure-L) and (annexure-M), whereby he also held that the petitioner's mother, Hajjani Zulekhabai, was the owner of the two houses and that the rental income thereof should be assessed only in her hands as her income on substantive and productive basis. The Department did not file any appeal against these orders of the AAC. In the meanwhile, the ITO, E-Ward, Indore, who had acquired jurisdiction in respect of the petitioner as also his mother, on July 7, 1976, issued a notice to Hajjani Zulekhabai under s. 148 of the I.T. Act, 1961, claiming to reassess her in respect of the assessment year 1972-73 on the ground that income chargeable to tax bad escaped assessment. She, therefore, in compliance with the said notice filed her return and had earlier already filed the report of her valuer. But, it appears, the ITO being not satisfied, after a lapse of 3 1/2 years, on June 29, 1976, referred the matter to the valuation cell of the Department who reported that the investment in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er's mother in the house No. 2/2, Daulat Ganj, Indore, that the order of the AAC does not come in the way of the respondent who had every right to make the assessment in respect of the mother; that as the Department's valuer had as per his report estimated the investment to the tune of Rs. 1,60,000, the difference of Rs. 70,000 thus remained unexplained which amounted to escaped assessment as the petitioner was liable to account for the same being the owner of the said house. The respondents have not disputed that the assessment of the petitioner for the accounting year 1972-73 has been reopened under s. 147(a) and not under s. 147(b) of the I.T. Act, 1961. It is, therefore, not necessary to consider the authorities cited on behalf of the respondent on this point, namely, Lalji Haridas v. ITO [1961] 43 ITR 387 (SC) and Lalji Haridas v. Bhatt [1965] 55 ITR 415 (SC). However, we may point out that the real distinction between the provisions of s. 147(a) and (b) is that where the assessee is found to be lacking in disclosing fully and truly all material facts necessary for the assessment in question, the provisions of s. 147(a) of the Act will be attracted, so as to give eight years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year to the ITO, or (b) to disclose fully and truly material facts necessary for his assessment for that year. Both these conditions must co-exist in order to confer jurisdiction on the ITO. It is also imperative for the ITO to record his reasons before initiating proceedings as required by s. 148 (2). Another requirement is that before a notice is issued after the expiry of four years from the end of the relevant assessment year, the Commissioner should be satisfied on the reasons recorded by the ITO that it is a fit case for the issue of such notice. We may further add that the duty which is cast upon the assessee is to make a true and full disclosure of the primary facts at the time of the original assessment. Production before the ITO of the account books or other evidence from which material evidence could with due diligence have been discovered by the ITO will not necessarily amount to disclosure contemplated by law. The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that, his duty ends. It is for the ITO to draw the correct inference from the primary facts. It is not the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its decision reported in Ganga Saran Sons Pvt. Ltd. v. ITO [1981] 130 ITR 1 (SC), though the learned counsel for the petitioner also placed reliance on the decisions in Jawaharlal Daryavbuxmal v. CIT [1982] 137 ITR 54 (MP), Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC), Modi Spinning and Weaving Mills Co. Ltd. v. ITO [1970] 75 ITR 367 (SC), Amala Das v. CIT [1984] 146 ITR 216 (P H), ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) and Chunnilal Onkarmal (Pvt.) Ltd. v. ITO [1983] 139 ITR 380 (MP), which have all taken a similar view. In the light of these decisions, the decisions cited on behalf of the Revenue, CIT v. Chidambaram Chettiar [1971] 80 ITR 467 (SC), CWT v. Chhatrshal Sinhji D. Zala [1982] 135 ITR 826 (Guj) and Nanji Co. v. ITO [1979] 120 ITR 593 (Cal), are distinguishable and to some extent they also support the proposition laid down in the decisions referred to above, cited on behalf of the petitioner. Keeping the above principles in view, we may now turn our attention to the facts of the present case. It is not disputed that no grounds have been mentioned by the ITO for reopening the assessment of the petitioner assessee with a view to show that h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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