Law:

Section:

Section 147, read with section 148, of the Income-tax Act, 1961 – Income escaping assessment – Illustrations – Assessment years 1961-62, 1963-64 and 1965-66 – Whether expression "omission or failure to disclose fully or truly all material facts" in section 147 refer only to facts within knowledge of assessee at material time and, therefore, a person cannot be said to have omitted or failed to disclose something when of such thing he had no knowledge – Held, yes – Assessee-company was owner of a colliery – For relevant assessment year, ITO issued notice upon assessee under section 148 – Assessee filed return of income contending that no income had escaped assessment due to omission or failure on assessee's part to disclose fully or truely all primary and relevant facts – Subsequently, it was ascertained that those notices under section 148 had been issued as a result of report of underground measurement made by mining officials of Government - Whether since assessee had no knowledge at material time that there was under reporting of raising of coal which fact had been revealed after 11 years of assessment from report of mining authorities and ITO merely acted upon information on report received from said authorities and solely relying upon that information issued notice under section 147(a), proceedings under section 147(a)could not be initiated against assessee - Held, yes - Whether therefore, impugned notices must be cancelled- Held, yes FACTS The assessee –company incorporated under the Indian Companies Act and was the owner of the colliery. The ITO issued notices upon the assessee under section 148 for the assessment years 1961-62, 1963-64 and 1965-66, whereby the assessee was called upon to submit a return of income for the said assessment years as the ITO had reason to believe that the assessee's income chargeable to tax for the said assessment years had escaped assessment within the meaning of section 147. The assessee filed return of income for the said assessment years in response to the said notices issued under section 148 under protest as no income had escaped assessment due to omission or failure on the assessee's part to disclose fully and truly…

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