Law:

Section:

Section 147(a) of the Income-tax Act, 1961 - Reassessment - Non-disclosure of primary facts - Assessment years 1971-72 to 1973-74 - ITO initiated reassessment proceedings on basis of information that assessee, who was carrying on transport business, admitted before excise authorities that he was real owner of trucks standing in names of his two brothers - On appeal, AAC held that since assessee and his two brothers together carried on business by pooling their resources agreeing to share profits, assessments should be made by altering assessee's status from individual to AOP - Tribunal upheld AAC's orders - Whether ITO was justified in drawing inference that trucks belonged to assessee even though same were purchased in his brothers' names and consequently, in initiating reassessment proceedings under section 147(a) - Held, yes Section 251 of the Income-tax Act, 1961 - Appellate Assistant Commissioner/Commissioner (Appeals) - Powers of - Whether in view of facts stated under head 'Reassessment - Non-disclosure of primary facts' AAC had powers to direct ITO to vary status of assessee to that of AOP without giving concerned persons an opportunity of being heard and assess business income in status of AOP - Held, no Facts The assessments of the assessee for the assessment years 1971-72 to 1973-74 were completed in the status of an individual. The ITO subsequently got the information that the assessee, who was carrying on the business of transport, was the real owner of the trucks standing in the names of his two brothers, and, hence, he initiated reassessment proceedings under section 147(a). On appeal, the assessee contended before the AAC that initiation of proceedings under section 147(a) was not valid as the ITO could not proceed on the basis of his admission before the excise authorities that all the trucks belonged to him, even though some of them were purchased in his brothers' names. The AAC while upholding the reassessment proceedings, however, directed the ITO to vary the status of the assessee as an AOP, without giving an opportunity of being heard to the concerned persons, The Tribunal upheld the orders of the AAC. On reference: Held On a perusal of…

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