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Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Illustrations - Gifts were made by third party to minor sons of assessee - Proceedings under section 147(a) were initiated against assessee on ground that assessee did not disclose aforesaid fact in his return - Whether there was no obligation on part of assessee to disclose that fact in his return, and, therefore, case did not fall within ambit of section 147(a) - Held, yes FACTS The Tribunal held that the initiation of proceedings under section 147( a) was invalid, inasmuch as the assessee was not under an obligation to disclose the factum of gifts to his minor sons by a third party in the return filed by him. The Tribunal declined to make reference under section 256(1). On application under section 256(2) : HELD Since gifts were made by a third party to the minor sons of the assessee, the Tribunal was justified in holding that there was no obligation on the part of the assessee to disclose this fact in his return. Therefore, the case did not fall within the ambit of section 147(a). It was never the case of the department that there was any information on the basis of which the case had been reopened. It was, therefore, not proper at the reference stage to justify the notice under section 147(1)(a). The application for reference was, accordingly, dismissed. Note : The decision is in favour of the assessee. JUDGMENT B.P. Jeevan Reddy, C.J-By this application under section 256(2) of the Income-tax Act, 1961, the applicant is asking this court to refer the following two questions…

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