Law: Income Tax Act, 1961

Section: 147

Income-tax-----Reassessment---Failure to disclose material facts necessary for assessment ---Amount shown as secured advances of CPWD, Ranchi, in assessment year 1986-87---Subsequent letters from CPWD and documents showing that amount had been recovered---Reassessment proceedings had been validly initiated---Indian Income Tax Act, 1961, S.147. During the course of hearing of the petitioners case for assessment year 1991-92, the Assessing Officer found that a sum of Rs.1,40,552 had been shown as secured advance of CPWD, which was being carried forward from the assessment year 1986-87. The enquiry in this regard, however, had revealed that the entire amount of Rs.1,40,552 had been realised by the CPWD through adjustment of the bills on March 31, 1986. A letter dated October 29, 1992, from the CPWD stated the advances had been recovered. The Income-tax Department made further queries from the Executive Engineer, CPWD, Ranchi Central Division, pursuant to which the Executive Engineer furnished details of payment and recoveries alongwith his letter, dated November 2, 1593. On the question whether the notice of the reassessment was valid; Held, that in view of the contents of the letter of the Executive Engineer, CPWD, dated October 29, 1992 and November 2, 1992, supported by facts, figures and documents, it was, prima facie, difficult to accept the plea of full and true disclosure of material facts. In the return which the, petitioner filed on August 27, 1986, he showed the aforesaid amounts as secured advance. Merely because the petitioner produced its books of account before the Assessing Officer, it did not necessarily follow that there w, as full and true disclosure of all material facts within the meaning of section 147(a). The notice could also be justified under section 147(b). The amount which had allegedly escaped assessment was to the tune of Rs.1,40,552. In terms of section 149(1)(a)(ii) of the Act the notice under section 148 could be issued within seven years from the end of the relevant assessment year. The relevant assessment, year being 1986-87 issuance of notice on March 12, 1993, was well within the period of limitation. CIT v. Burlop Dealers Ltd.…

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