Law: Income Tax Act, 1922

Section: 34(1)(a)

Section 147, read with section 64 of the Income-tax Act, 1961 [Corresponding to section 34(1)(a), read with section 16(3)(a)(ii), of the Indian Income-tax Act, 1922] - Income escaping assessment - Position prior to 1-4-1989 - Assessment years 1949-50, 1951-52 and 1952-53 - Whether where assessee has furnished all material facts including particulars described in part III of his return, which would put ITO in a position to compute total income, it is duty of ITO to include all artificial incomes as contemplated by section 16, in assessee's total income and assessee is under no obligation to include income of minors within his total income for computation under section 16(3) - Held, yes FACTS The assessee and his sons constituted a HUF. They effected a partition of the joint family properties and applied to the department for recognition of the partition under section 25A. Immediately thereafter, the erstwhile male coparceners constituted themselves into a firm and the minor sons of the assessee were admitted to the benefits of the partnership. The ITO granted registration to the firm for the assessment year 1947-48 and for subsequent years also. In the returns submitted by the assessee, the income derived by the minors from the partnership was not included with the result that it was not brought to assessment for the assessment years 1949-50 to 1952-53. Subsequently, the ITO after initiating proceedings under section 34(1)(a) to include such income in the assessment of the assessee completed the re-assessment under section 34. The appeals carried by the assessee to the AAC and further appeals to the Tribunal proved unsuccessful. On reference : HELD Section 22 lays emphasis on the submission of the return in the prescribed form. The form prescribed under rule 19 expressly relates to 'particulars required under sub-section (5) of section 22 of the Income-tax Act, 1922'. Section 22(5), requires the assessee to furnish particulars regarding the shares of all the partners in the business, profession or vocation and any branches thereof, etc. The particulars described in Part III of the form must be furnished as they are all material facts within the contemplation of…

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