Law:

Section:

Section 147 of the Income-tax A ct, 1961 - Reassessment - General - ITO reopened assessee's assessment which had been completed under section 143(1) on basis of information received that purchaser of assessee's lorry had disclosed purchase value at much higher figure in order to obtain bank loan - H owever, tribunal held that since assessee had disclosed all material facts necessary for assessment along with return, reopening of assessment was bad in law - Whether tribunal was justified in its view - Held, yes Facts For the assessment year 1973-74 the original assessment had been completed by the ITO under section 143(1) on the income declared by the assessee. Subsequently, on the basis of the information that the purchaser of the lorry belonging to the assessee had disclosed the purchase value at a much higher figure to obtain a loan from the bank, the ITO reopened the assessment by invoking the provisions of section 147. On appeal, the Tribunal was of the opinion that the assessee had made available all the informations and disclosed all the primary facts necessary for the assessment along with the return and that reopening of the assessment was, therefore, bad in law. The Tribunal also held that there had been no omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment. On reference : Held As held by the Supreme Court in the case of Gemini Leather Stores v. ITO [1975] 100 ITR 1 , where the assessee has disclosed primary facts relating to transactions, it is for the officer to make the necessary enquiries and draw a proper inference as to whether the income returned is correct or not. If he does not make an enquiry, it is a case of oversight and it cannot be said that income chargeable to tax has escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts. In the instant case, the Tribunal had given detailed reasons in support of its conclusion on the material facts disclosed by the assessee at the first instance. On the facts found, the conclusion of the Tribunal was justified. Case referred to Gemini Leather Stores v.…

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