Law:

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Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Position prior to 1-4-1989 - Assessment year 1965-66 - Whether concealment of income by firm can provide a justifiable ground for reopening assessment of its individual partners - Held, yes - Whether in cases where reassessment under section 147 or rectification under section 154 are both equally competent, revenue can take action under either section since two sections are not mutually exclusive - Held, yes - Assessment of assessee who was partner in a firm, was completed - Subsequently, as a consequence of search of premises of firm and its partners, it was found that assessee had received more amount than returned by firm - ITO, thus, initiated reassessment proceedings under section 147 - Assessee challenged reassessment proceedings on ground that after reassessment of firm, ITO could amend assessment of individual partners under section 155 and as such he had no jurisdiction to reopen assessment - Whether in view of fact that assessee had other individual incomes as well which had escaped assessment, reopening of assessment under section 147 was more appropriate than modification of assessment under section 155 - Held, yes - Whether, therefore, order passed by ITO was to be affirmed - Held, yes FACTS For the assessment year 1965-66, the petitioner, a partner of a firm 'V' was assessed after a thorough scrutiny of the account books. Subsequently, as a consequence of search of the premises of the firm and its partners and seizure of certain incriminating documents, the assessment of the firm was reopened and a revised return filed. As per the revised return filed by the managing director, the petitioner had received towards his share more amount than returned by the firm. On this basis, the ITO issued notice for reopening his assessment under section 148. On writ, the petitioner contended that (1) the impugned notice did not disclose the sub-section of section 147 or the reasons for reopening the assessment, (2) concealment of income by the firm did not justify reopening of assessment of individual partners, and (3) after reassessment of the firm the ITO could amend the assessment of…

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