Law:

Section:

SECTION 147(a) OF THE INCOME-TAX ACT, 1961 - REASSESSMENT - NON-DISCLOSURE OF PRIMARY FACTS - DURING ASSESSMENT YEAR 1972-73 PETITIONER AND HIS MOTHER WERE BEING ASSESSED BY SAME ITO - MOTHER HAD INVESTED A SUM OF RS. 90,583 IN RENOVATION OF ONE OF HER TWO HOUSES AND WAS DERIVING INCOME THEREFROM - IN ASSESSMENT PROCEEDING FOR AFORESAID YEAR, ITO EXAMINED HER AND ALSO HELD AN ENQUIRY INTO SAID INVESTMENTS AND ACCEPTED AFORESAID AMOUNT OF INVESTMENT - AFTER ABOUT THREE AND A HALF YEARS ITO SOUGHT TO REOPEN ASSESSMENT OF PETITIONER ON BASIS OF DEPARTMENTAL VALUER'S REPORT TO THE EFFECT THAT INVESTMENT IN CONSTRUCTION OF HOUSE WAS RS. 1,60,000 AND DIFFERENCE OF RS. 70,000 BETWEEN THIS AMOUNT AND THE ESTIMATED RENOVATION EXPENSES OF RS. 90,583, WAS PETITIONER'S INCOME WHICH HAD ESCAPED ASSESSMENT - WHETHER IMPUGNED REASSESSMENT NOTICE, BASED MAINLY ON VALUER'S REPORT, WAS LIABLE TO BE QUASHED - HELD, ON FACTS, YES Facts One H, the mother of the petitioner, was the owner of the two houses, and rental income from these houses was the only source of her income. In the previous year relevant to the assessment year 1972-73, H had invested a sum of Rs. 90,583 in the renovation of one of the said two houses. During the assessment proceeding for the assessment year 1972-73, the ITO examined her and also held an enquiry to the investments made by her in the construction and renovation of the house and the said investment of Rs. 90,583 as disclosed by her, was accepted. Assessments for the subsequent years 1973-74 and 1974-75 of H had also been completed. The petitioner was being assessed by the same ITO up to the assessment year 1974-75 in respect of his share income which was his only source of income. For the assessment years 1975-76 and 1976-77, for the first time the ITO held the petitioner to be the owner of the house in question and included the rental income therefrom in the petitioner's income. On appeal, the AAC deleted the rental income from the petitioner's assessment holding that his mother H was the owner and not the petitioner. After a lapse of three and a half years from original assessment on 29-6-1976, the ITO referred the matter to the valuation cell of…

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