Law:

Section:

Section 147, read with section 142 of the Income-tax Act, 1961 - Income escaping assessment - Illustrations - Assessment years 1962-63 to 1966-67 - Whether duty to disclose material facts necessarily postulates existence of a thing or material and if said material is not in existence or if material is such of which assessee had no knowledge or of which he cannot be attributed with any knowledge, there would be no duty to disclose such material - Held, yes - Whether if absence of such material handicaps ITO in assessing income or in passing order on return, he has ample power to call upon assessee under section 142(1) to supply such material but if he does not exercise that power or fails to exercise that power and proceeds to assess assessee on material which is before him, it can be said that Assessing Officer did not find that material necessary for assessment, and, therefore, he cannot resort to his power under section 147(a) - Held, yes FACTS The assessee filed his returns of income along with the copies of the trading account and profit and loss account. The assessee had not filed balance-sheets as the same were not drawn up. The capital account was not maintained and, therefore, the same was also not filed. The ITO completed the assessment on the basis of profit and loss account. Thereafter, the ITO issued a notice under section 148 on ground that certain income was under stated as compared to assets held by the assessee and brought to tax the said understated income. The AAC held that it was open to the ITO to call upon the assessee to prepare the balance-sheet and to produce the same in exercise of his powers under section 142(1)(ii) or, it was also open to him to estimate extra profits for each of the years as he had done in the past. The AAC, therefore, ultimately, held that since the ITO did not call upon the assessee to draw the balance-sheets and to produce the same nor did he call upon the assessee to furnish net wealth statement nor did he estimate the extra profits after scrutiny of the books of account produced before him as was done by the ITO for the earlier assessment years the ITO was not justified to invoke Jurisdiction under section…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492