Law: Income Tax Act, 1961

Section: 147(a),148,149

Income-tax----Reassessment---Failure to disclose fully and truly material facts necessary for assessment ---Assessees owning lands transferring them as capital in a firm in which they were partners---Transfer resulting in capital gains--¬Transfer not disclosed in return or at time of assessment---Fact that Income¬-tax Officer could have found out fact of transfer of lands by assessee to firm while assessing firm did not exonerate assessees from their duty to make full and true disclosure of material facts---Reassessment valid---Indian Income Tax Act, 1961, Ss. 147(a), 148 & 149. The assessee who owned lands transferred them at market value as capital in a firm of which they were partners. For the assessment year, the Income-tax Officer reopened the assessment of the assessees under section 147(a) read with section 148 of the Income Tax Act, 1961, on the ground that in the returns filed by them the fact of transfer of lands to the firm, which resulted in escapement of capital gains liable to tax, was not disclosed by the assessees. The assessees challenged the order of the Income-tax Officer before the Commissioner of Income-tax (Appeals) on the ground that the Income-tax Officer was aware of the transfer of the lands by the assessee to the firm as the very same lands had been sold by the firm to a limited company, that the Income-tax Officer when assessing the firm was aware of the capital gain arising from the transfer of the lands by the firm to the company and hence the Income-tax Officer was aware of all material facts relevant for the assessment of the assessees also and that, therefore, there was no necessity of disclosing these facts to the Income-tax Officer at the time of the assessment. The Commissioner of Income-tax (Appeals) accepted the contention of the assessee and cancelled the reassessment. On further appeal, the Tribunal affirmed the order of the Commissioner of Income-tax (Appeals). On a reference: Held, that it is well-settled that it is the duty of the assessee to disclose all primary facts necessary for his assessment before the assessing authority. If the assessee fails to do so, he cannot be permitted later to contend that it was the…

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