Law: Income Tax Act, 1961

Section: 151

(a) Income-tax--Reassessment--Reasons for--I.-T.O. should state in his reasons basic facts constituting non-disclosure. The I.T.O. must in his reasons for reassessment indicate broadly the fact, or facts which constitute non-disclosure and which in turn, has led to assessable income escaping assessment. It may be that it is open to the Commissioner, to look into the relevant record, or to call for further reasons of material before being satisfied within the meaning of S.151(2), Indian Income-tax Act, 1961 and granting his approval to the proposed reassessment, but ordinarily, the statute contemplates his forming the requisite satisfaction primarily on the basis of the reasons recorded by the. I.-T.O. The provision as to satisfaction of the Commissioner is conceived as an administrative check upon the power of the I.-T.O. to issue such a notice. It necessarily means that the function of the Commissioner is not a mechanical one. He has to peruse the reasons and form an opinion that the assessee has failed to disclose fully and truly all material facts necessary for assessment of that year and that the same had led to the income chargeable to tax escaping assessment. He cannot form this opinion or satisfaction, as the case may be, unless the basic facts constituting such non-disclose are stated in the reasons recorded, by the I.-T.O. Thus, where the I.-T.O. in his reasons for the proposed reassessment of the assessee a Private Ltd. Company simply stated that assessee has failed to disclose certain profit arising from the sale of a machinery which amount is assessable under S.41 (2), Indian Income--tax Act, 1961 and that the assessee made a wrong claim of deduction under S.80-I, inasmuch as the assessee who was owning more than one priority industry has not aggregate the profits and losses of all the priority industries for the purpose of claiming the benefit under S.80-1, in which case the assessee due to losses in one of its priority industry would not have been entitled to any benefit or deduction under S.80-1, Indian Income-tax Act, 1961 without as regards the first reason, there being an allegation of non-disclosure of material fact on the part of the…

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