Law: Income Tax Act, 1961

Section: 147

Law: Income Tax Act, 1922

Section: 23(3),34,34(1)

Section 147 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] - Income escaping assessment - Illustrations - Assessment years 1942-43 to 1944-45 - Whether it is duty of assessee to disclose fully and truly all primary relevant facts and once all primary facts are before assessing authority, he requires no further assistance by way of disclosure and it is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn - Held, yes - Whether if there are some reasonable grounds for thinking that there had been any non-disclosure as regards any primary facts, which could have a material bearing on question of 'under-assessment', that would be sufficient to give jurisdiction to ITO to issue notice under section 34 of 1922 Act - Held, yes - ITO issued notices under section 34 of 1922 Act to assessee - Only non-disclosure mentioned in ITO's report was that assessee had failed to disclose its 'true intention behind sale of shares' - Further, statements made by assessee which ITO considered to amount to non-disclosure of material facts were that assessee was not a dealer in shares and securities and that throughout whole of its history it bought no shares - Whether question of assessee's intention was an inferential fact and so assessee's omission to state his 'true intention' could not by itself be considered to be his failure or omission to disclose any material fact within meaning of section 34 of 1922 Act - Held, yes - Whether in view of facts that audited accounts of assessee were furnished and it had not been suggested by department that in fact at any time up to conclusion of assessment proceedings, assessee in fact made a single purchase of shares, ITO had no reasonable ground for thinking that anything as regards purchase of shares had not been disclosed - Held, yes - Whether therefore notices under section 34 of 1922 Act were issued without jurisdiction and same were liable to be quashed - Held, yes FACTS For the assessment years 1942-43 to 1944-45, the assessee-company was assessed under section 23(3) of the 1922 Act and tax assessed was duly paid by the…

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