Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 1991-92 - Assessee claimed deduction under section 80-I on premise that it had set up a new industrial unit which was ultimately allowed by revenue under section 154 for rectification - After about three years, Additional Commissioner issued notice under section 148 on ground that assessee had nowhere disclosed materials and primary facts and information with regard to setting up of a separate unit - Date of setting up of unit, investment made and items manufactured in unit or details of plant and machinery, whether new plant and machinery was purchased and if so when; had not been disclosed - No separate profit and loss account for industrial undertaking was filed - Further, deduction was allowed on profits of company and not on profits of separate industrial undertaking - Whether a perusal of reasons recorded by Addl. Commissioner showed that he had applied his mind to relevant material and formed a belief that petitioner had not disclosed complete facts which could enable it to claim deduction under section 80-I and, therefore, its income had not been properly assessed - Held, yes - Whether at that stage, Court could neither go into sufficiency or adequacy of reasons recorded by Addl. Commissioner nor could it interfere with notice simply because on an overall reappraisal of material, a different opinion might be formed - Held, yes FACTS The petitioner-assessee, for the assessment year 1991-92, claimed deduction under section 80-I on the premise that it had set up a new industrial unit. After long litigation, the assessing authority accepted the petitioner-assessee's claim for deduction. After about three years, the Additional Commissioner issued notice under section 148 and called upon the petitioner to show-cause against the proposed reassessment by observing that its income for the relevant assessment year had escaped assessment within the meaning of section 147 on ground that the assessee had nowhere disclosed that a separate unit had been set up by it during the year. Even the primary and material facts with regard to claim of…

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