TMI Blog1974 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... une 28, 1965, declaring an income of Rs. 71,331 for the assessment year 1965-66, accounting year commencing on July 31, 1963, and ending on July 18, 1964. The assessment was completed on July 22, 1965, and the income as declared was accepted on January 25, 1967. The Income-tax Officer received a circular letter dated January 17, 1967, from the Inspecting Assistant Commissioner, Amritsar. This letter was in connection with M/s. Shiv Parkash Janak Raj group. This group was alleged to be indulging in bogus purchases and hawalas through different patties. A list showing details of hundi loans which came out of concealed income of Shiv Parkash Janak Raj group was enclosed with this circular. In the list, the name of the assessee was mentioned as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t made by the Income-tax Officer. The assessee preferred second appeal to the Tribunal and two matters were agitated before it, namely : (a) that the notice under section 147(a) of the Act was invalid, and (b) that the addition of Rs. 28,112 was not justified on facts. In so far as the first matter is concerned, the Tribunal observed as follows : " The circular received by the Income-tax Officer contained the information that Shiv Parkash Janak Raj group had arranged bogus hundi loans and the name of the assessee was found in that list. The list indicated that the assessee had advanced a loan of Rs. 25,000 to Simplex Woollen Mills. The assessee in its balance-sheet as on July 30, 1963, had shown an amount of Rs. 25,000 due from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or referring the following two questions of law for the opinion of this court : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the proceedings under section 147(a) of the Act were not validly initiated ? (2) If the answer to question No. 1 is in the negative, whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the reassessment of the assessee was invalid ? " The Tribunal was, however, of the opinion that only the first question arose and it, accordingly, referred that question for the opinion of this court. It will be apparent from the facts found before the Tribunal that the only material in the hands of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eve that the income, profits or gains chargeable to income-tax had been under-assessed. The second condition is that he must have reason to believe that such ' under-assessment ' had occurred by reason of either, (i) omission are failure on the part of an assessee to make a return of his income under section 22, or (ii) omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment for that year. Both these conditions are conditions precedent to be satisfied before the Income-tax Officer acquires jurisdiction to issue a notice under the section. But the legal position is that if there are, in fact, some reasonable grounds for the Income-tax Officer to believe that there had be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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