Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Illustrations - Assessment years 1995-96 and 1996-97 - Whether High Court, in proceedings under article 226, can scrutinize reasons recorded by Assessing Officer for initiating proceedings under section 147/148 of Income- tax Act and though sufficiency of material cannot be gone into but relevancy certainly be gone into - Held, yes - Whether, therefore, a writ petition challenging such notice under section 148 is maintainable - Held, yes - Assessees filed wealth- tax returns disclosing amount of gift received by them - In wealth-tax proceedings they had given sufficient details of donors and their gifts, and WTO after making full and complete enquiry, accepted returns - Subsequently, their income-tax returns were processed under section 143(1)(a) and ITO issued notice under section 147/148 for reopening of assessments - In income-tax returns, none of assessees disclosed amount of gift received by them nor there had been any scrutiny by ITO - Whether fact of disclosing gifts in wealth-tax return and its scrutiny in assessment under Wealth-tax Act, is of no consequence to proceedings under Income-tax Act - Held, yes - Whether it would not be correct to say that production of donors and material to prove alleged gifts before WTO in proceedings under Wealth-tax Act, would amount to full and true disclosure of fact under Income-tax Act also - Held, yes - Whether petitioner could not take advantage of scrutiny done by WTO in proceedings under Wealth-tax Act, regarding gifts in question - Held, yes FACTS The assessees filed wealth-tax returns with the concerned Wealth-tax Officer whereby they had also disclosed the huge amount of gifts received by them. Since their case was selected for scrutiny, the Wealth-tax Officer issued notices under section 16(2) of the Wealth-tax Act, 1957, in response to which the assessees participated in the scrutiny proceedings, submitted their replies, and gave complete list of donors, their names, addresses and affidavits along with the copies of the gift-tax returns of the donors. The WTO, after making full and complete enquiry, accepted their returns. Subsequently,…

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