9911796707
TMI Blog1975 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. The income of the firm was determined at Rs. 1,09,430 and the allocation of the shares of the partners of the firm was made on the basis of the income so determined and the taxes were assessed and paid accordingly. Thereafter, the impugned notice dated March 10, 1971, has been issued under section 148 of the Act. The learned counsel for the petitioner has submitted: (1) that conditions precedent for issue of a notice under section 148 of the Act within the meaning of section 147(a) of the Act are totally absent in the present case and as such the Income-tax Officer issued the impugned notice illegally and without jurisdiction; (2) that since the notice is not under section 147(a) of the Act and even if it is assumed that the notice is under section 147(b) it is clearly barred by limitation prescribed under section 149(1)(b); and (3) that the sanction purported to be given by the Commissioner of Income-tax is wholly mechanical and without any application of mind on the part of the Commissioner and as such the alleged sanction cannot be termed as valid sanction as contemplated under section 151 of the Act and hence the notice is without jurisdiction. At this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e limit for notice.-(1) No notice under section 148 shall be issued,- (a) in cases falling under clause (a) of section 147- (i) for the relevant assessment year, if eight years have elapsed from the end of that year, unless the case falls under sub-clause (ii); (ii) for the relevant assessment year, where eight years, but not more than sixteen years, have elapsed from the end of that year, unless the income chargeable to tax which has escaped assessment amounts to or is is likely to amount to rupees fifty thousand or more for that year; (b) in cases falling under clause (b) of section 147, at any time after the expiry of four years from the end of the relevant assessment year. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilal 280 ------------------ 7,858 -------------------- In the assessment, these interests were allowed by the Income-tax Officer. Subsequently, the assessee-firm came out with a disclosure under the Finance (No. 2) Act of 1965 admitting that the credits standing in the names of the above parties were fictitious ones and these belonged to the partners of the firm. In the disclosure petition, the principal amount standing to the credit of the aforesaid bogus parties were only disclosed excluding the above interest shown as paid. In the subsequent assessments the interest paid to them on their bogus credits were disallowed by the Income-tax Officer in the hands of the firm's assessment. The action of the Income-tax Officer was also upheld by the Appellate Assistant Commissioner in the appeal against these subsequent assessments. As the assessee had not disclosed fully and truly the nature of the transaction in the course of original assessment the interest paid to the above parties amounting to Rs. 7,858 was allowed by the Income-tax Officer and thus the above interest escaped assessment in terms of section 147(a). Further, there is a loan account in the books of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the question of 'under-assessment' that would be sufficient to give jurisdiction to the Income-tax Officer to issue the notices under section 34. Whether these grounds were adequate or not for arriving at the conclusion that there was a non-disclosure of material facts would not be open for the court's investigation. In other words, all that is necessary to give this special jurisdiction is that the Income-tax Officer had when he assumed jurisdiction some prima facie grounds for thinking that there had been some non-disclosure of material facts. Clearly it is the duty of the assessee who wants the court to hold that jurisdiction was lacking, to establish that the Income-tax Officer had no material at all before him for believing that there had been such non-disclosure." The first submission of the learned counsel for the petitioner is that the conditions precedent for the issue of the notice under section 148 of the Act within the meaning of section 147(a) of the Act are absent in the present case. From the reasons recorded by the Income-tax Officer for issuing the notice under section 148, it is found that the Income-tax Officer assumed jurisdiction to issue the notice und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained hereinabove or in any other law for the time being in force, nothing contained in any declaration made under this section shall be admissible as evidence against the declarant for the purpose of any assessment proceeding or any proceeding relating to imposition of penalty or for the purpose of prosecution under any of the Acts mentioned in sub-section (9) of the Wealth-tax Act, 1957, in respect of any amount specified in an order made by the Commissioner under sub-section (4) or, if such amount is altered by an order of the Board under sub-section (6) then, such altered amount." Regarding the second ground we find that Ganpatrai Mundra, who has been shown in the books of accounts of the assessee-firm as the lender of the sum of Rs. 1,15,300, during the assessment year 1962-63, has not admitted anywhere that he did not lend the money. Before the Income-tax Officer in Calcutta, Mundra is stated to have admitted that he borrowed moneys from M/s. Surajmal Ganesh Ram for advancing the money to the assessee. But M/s. Surajmal Ganesh Ram confessed before his assessing Income-tax Officer that he was a mere name-lender. These facts, taken at the most, may be information gathered by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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