Law:

Section:

Section 131 read with section 142 of the Income-tax Act, 1961 - Discovery, production of evidence - Powers regarding - Assessment year 1961-62 - Whether since under section 143(3), ITO is entitled to call upon the assessee to produce such other evidence as he may require on specific points in addition to what assessee himself pointed out; and for this purpose he can invoke section 131 and call upon an assessee to produce books of accounts for period even beyond three years prior to previous year in question - Held, yes FACTS While completing the assessment under section 143 for the assessment year 1961-62, the ITO issued a notice under section 131 to the assessee to produce his books of accounts for the financial year ending on 31-3-1949, 31-3-1950, 31-3-1951 and 31-3-1952 on 22-2-1966. The appellant submitted that the ITO is restricted to clause (b ) of the proviso to section 142 and cannot invoke his powers under section 131 and call upon the assessee to produce books of accounts for periods beyond three years prior to the previous year. HELD Clause (b) of the proviso to section 142 relates to a stage in the proceeding before the actual assessment is made. The heading of the section is 'Enquiry before assessment'. The assessment is made under the various provisions of section 143. Sub-sections (2) and (3) of section 143 make it quite clear as to what kind of evidence the ITO will call upon the assessee to produce. Sub-section (2) of section 143 deals with or relates to that kind of evidence which the assessee may choose to rely upon in support of the return which the assessee had filed. But the matter does not end there. Under sub-section (3) of section 143, the ITO is entitled to call upon the assessee to produce such other evidence as he may require on specified points in addition to what the assessee himself has produced in compliance with a notice served upon him under section 143(2) in support of his return. In order to exercise this power the ITO, can rely on the provisions of section 131 because he is exercising the power for the purposes of the Act. From this point of view, there was no conflict between section 131 and section 142, clause (b) of the…

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