TMI Blog1975 (7) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... pur, issued a notice to the assessee under section 22(2) of the Indian Income-tax Act, 1922, followed by a notice under section 22(4). Both these notices remained uncomplied with and the Income-tax Officer made an ex parte assessment order under section 23(4) of the Act on a total income of Rs. 10,000 including a sum of Rs. 6,000 being income from property. The assessee moved an application under section 27 of the Act. This application was allowed and the assessment made by the Income-tax Officer, Special Survey Circle, Kanpur, was cancelled, on the ground that the assessee had already filed its return before the Income-tax Officer, District III(1), Kanpur, and as such the assessment made by the Income-tax Officer, Special Survey Circle, was unauthorised. This order was passed on 15th March, 1966. However, no assessment was completed by 31st March, 1966, on which date the normal period of four years' limitation for making an assessment expired. The assessment order was passed as late as 25th of March, 1970, on a total income of Rs. 66,504 made up as under : Rs. Business income 10,000 Income from other sources 55,000 Property income 1,504 ---------------- Total 66,504 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing provisions of the old Act and there is no material difference on the point in issue between the provisions of the old and the new Acts. We shall, therefore, refer to the corresponding provisions of the old Act wherever necessary. Sub-section (3) of section 34 prescribes a period of limitation for assessment. It provides that : " No order of assessment or reassessment, other than an order of assessment under section 23 to which clause (c) of sub-section (1) of section 28 applies...... shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable." Then there is the second proviso which says that : " .... nothing contained in this section limiting the time within which any action may be taken or any order, assessment or reassessment may be made, shall apply to a reassessment made under section 27 ........" Thus the normal period for completing the assessment is four years from the end of the assessment year in which the income, profits or gains are first assessable. There are two exceptions to it : (i) when the assessment is made under section 27, or (ii) under section 23 to which the provisions of clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies. In other words, it had to be seen whether it was a case of concealment or of furnishing inaccurate particulars by the assessee. The concealment attributed to the assessee is two-fold. First, that it had not included in its original return the income from, property, and, secondly, that it had not disclosed its investments in the construction of the house which was estimated by the Income-tax Officer at Rs. 55,000 and was treated as income of the assessee from other sources on the ground that the assessee had failed to explain the source of the investment. So far as the income from property is concerned, the assessee had included the same in the revised return filed by it before the Income-tax Officer detected the omission. On these facts the Tribunal has held that the assessee could not be said to be guilty of concealment. We agree with this view of the Tribunal without laying down the proposition that an assessee can always escape penal consequences by filing a revised return. On the facts found by the Tribunal, we are satisfied that no penalty could be levied upon the assessee in respect of the income from property. As regards the second charge, namely, that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the purpose for which section 153(1)(b) is put in in the statute." This view finds support from a decision of Manchanda J. in Ram Bilas Kedar Nath v. Income-tax Officer [1964] 54 ITR 11 (All). There it was held that the Income-tax Officer was bound to complete the assessment under section 23 of the Act within the normal period of 4 years provided for the completion of all assessments under section 34(3) of the Act, unless there existed a prima facie case for the applicability of the provisions of section 28(1)(c) of the Act, and if for four long years the Income-tax Officer had not been able to glean any information from any outside source of any concealment and no notice under section 28(1)(c) was issued when the assessment under section 23(4) was completed by him, he could not on any theoretical considerations or on the remote possibility of discovering some concealment in the future arrogate to himself the right to complete the assessment after the lapse of four years. The learned judge then made the following observation : " If that were the law then no assessment need ever be completed within the normal period of four years and the sword of Damocles could be kept hanging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to dwell upon this point any further, because the instant case is one to which section 28(1)(c) would never be attracted. We have already indicated that the form of return does not require an assessee to reveal his investments. Obviously, therefore, when the assessee filed its return without disclosing the investment, he did not commit any default, nor could he be said to be guilty of any concealment. When the assessee was called upon to disclose the source of investment, he did offer an explanation. Maybe, the explanation was not acceptable to the Income-tax Officer, but that fact by itself will not attract section 271(1)(c) of the new Act or section 28(1)(c) of the old Act. This proposition admits of no doubt after the decision of the Supreme Court in Commissioner of Income-tax v. Anwar Ali [1970] 76 ITR 696 (SC). There the Supreme Court has held that the gist of the offence under section 28(1)(c) is that the assessee had concealed the particulars of his income or deliberately furnished inaccurate particulars thereof and the burden is upon the department to establish that the amount in dispute is the assessee's income and that the assessee had deliberately concealed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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