Law: Income Tax Act, 1961

Section: 147,256

Income-tax----Reference---Reassessment---Failure to disclose material facts necessary for assessment---Finding by Tribunal that assessee had disclosed primary and material facts necessary for assessment---Tribunal justified in holding that reassessment proceedings were not valid---No question of law arose---Indian Income Tax Act, 1961, Ss. 147 & 256. During the course of assessment proceedings for the assessment year 1970-71, cash credits of Rs.35,000 in the name of one BL, son of BR, were noticed. The Income-tax Officer directed the assessee to produce BL to prove the genuineness of the advance made by BL. The assessee stated that BL had turned hostile and produced indirect evidence in the form of a copy of a sale¬-deed and copies of accounts. The Income-tax Officer on this evidence accepted the genuineness of the cash credit. Subsequently, reassessment proceedings were started and the sum of Rs.35,000 was added as unexplained cash credit. The Tribunal held that the reassessment was not valid. On an application to direct reference. Held, dismissing the application, that during the original assessment proceedings the credit in question was accepted after due investigation. It could not be said that the assessee had failed to make a true and full disclosure of the material facts. The Tribunal was right in law in cancelling the reassessment. No question of law arose from its order. JUDGMENT ASHOK BHAN, J.---This is a petition under section 256(2) of the income Tax Act, 1961 (hereinafter referred to as "the Act"), relating to the assessment year 1970-71 filed by the Commissioner of Income-tax, Haryana, Rohtak, for issuance of a mandamus directing the Income-tax Appellate Tribunal, Delhi Bench, Delhi (hereinafter referred to as "the Tribunal"), to draw up a statement of the case and refer to this Court the following question of law stated to be arising from the order of the Tribunal, dated October 23, 1989: "Whether, on the facts and in the circumstances of the case, the learned Tribunal is right in law in canceling the reassessment by not considering the statement of Shri Basheshar Lal as information to justify action under section 147(a) of the Income Tax…

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