Law:

Section:

Section 147(a) of the Income-tax Act, 1961 - Reassessment - Non-disclosure of primary facts - For assessment years 1968-69 and 1969-70, assessments had been completed - Thereafter enforcement branch of sales tax department searched premises of assessee and it was discovered that assessee had shown erroneous turnover of its business - Whether reopening of assessment for aforesaid assessment years on basis of information collected from sales tax department was justified - Held, yes Facts For the assessment years 1968-69 and 1969-70, on an enquiry, the assessee-firm had offered books of account and filed the books of profit and loss and balance sheets for each accounting year. On 27-9-1971, the ITO completed the assessments. Thereafter, the enforcement branch of the sales tax department searched the premises of the assessee and it was found that the assessee had shown erroneous turnover of the business. When this information reached the ITO concerned, he requested the Superintendent of Taxes to furnish necessary particulars of the revisions made by the department. After the particulars were received, the ITO under section 147 recorded the reasons for reopening the aferesaid assessments and the notices were served on 20-10-1973. On writ, the assessee contended that the account books were placed before the ITO and the assessment orders were concluded and, therefore, it was no more open for the department to reopen the assessments. Held The well settled principle is culled out from the words in clause (a ) of section 147. The words are whether the assessee has disclosed 'fully and truly all material facts necessary for assessment'. Once the assessee does that what inferences are to be drawn is in the hands of the ITO. It is open for the ITO not to act on the representation of the assessee, call for additional information or further investigate facts and pass the assessment order. In doing so, he may totally reject the case of the assessee or partially accept the representation of the assessee or fully agree with the case of the assessee. Once the assessment order is finalised the issues in the inquiry are settled in the assessment order and the same issues cannot be…

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