Law:

Section:

Income-tax---Reassessment--Failure of assessee to disclose fully and truly all material facts--Nature and scope--Common administrative expenses incurred by a foreign company on behalf of assessee and other companies--Allocation of such expenses to assessee at about 40%, and was allowed in original assessment by Income-tax Officer--Auditors certificate for later assessment year that 10% of such expenses was reasonable, held, would not entitle Income-tax Officer to reopen earlier assessment on the ground that assessee failed to disclose fully and truly all material facts--Jurisdiction of income-tax Officer to reopen and re-assessment discussed. C.I.T. v. Hemchandra Kar [1970] 77 I T R 1 (SC); Ganga Saran and Sons P. Ltd. v. I.T.O. [1981] 13Q T R 1 (SC); Hazi Amir Muhammad Mir Ahmed v. C.I.T. [1977] 110 I T R 630 (P & H); I.T.O. v. Lakhmani Mewal Das [1976] 103 I T R 437 (SC); I. T. O. v. Madnani Engineering Works Ltd. [1979] 118 I T R 1 (S C); Mukherjee (P.R.) v. C.I.T. [1956] 30 I T R 535 (Cal); Narayanappa (S) v. C.I.T. [1967] 63 I T 8 219 (S C); Sheo Nath Singh v. A. A. C. of I. T. [1971] 82 I T R 147 (S C) and Civil Appeals Nos. 1189 and 1190 of 1974 ref. JUDGMENT SABYASACHI MUKHARJI. J.--Whether the reopening of the assessments of the assessee under section 147(a) of the Indian Income-tax Act, 1961 (hereinafter referred to as "the Act"), was valid is the question involved in these appeals by special leave from the Bench decision of the Calcutta High Court dated December 7, 1973. The assessment years involved are 1957-58, 1958-59 and 1959-60. It may be mentioned that on notices being issued for reopening of tire assessments under section 148 read with section 147(a) of the said Act, the assessee challenged the said notices on the ground that there were no materials to initiate such reopening Such challenge was upheld by the learned Single Judge of the High Court and the notices in question were quashed. The Revenue being aggrieved preferred appeals before the Division Bench of the. High Court. The Division Bench of the High Court reversed the findings of the learned trial Judge and the notices were upheld. Hence these appeals. The assets and liabilities of…

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