Law:

Section:

Section 147 of the Income-tax Act, 1961 [Corresponding to section 34(1)(a) of the Indian Income-tax Act, 1922] - Income escaping assessment - Assessment year 1944-45 - Assessee filed return for relevant assessment year wherein he did not mention whether he was a partner in firm - Subsequently accountant of assessee wrote two letters mentioning that assessee had been a partner in firm but as there had been dispute regarding affairs of partnership firm same was not disclosed in return - It was also stated in said letters that assessee's claim was subject to outcome of dispute of said firm - Assessment was completed as per assessee's claim - Later department initiated action under section 34(1)(a) on ground that assessee failed to disclose full and true particulars of its income at time of assessment in as much assessee was a partner in a firm and assessee had earned profit therefrom - Whether profits in question for which assessee became liable was ascertained when assessment of firm was made on 17-12-1949, therefore, till that date assessee could not be charged with omission or failure to disclose fully and truly that fact - Held, yes - Whether therefore, Tribunal was right in holding that assessee had not been guilty of any omission or failure to disclose material facts necessary for assessment for assessment year in question - Held, yes FACTS The assessee was doing business as a contractor and was being assessed as an individual. In the year 1941 he joined a partnership firm. When the assessee made his return for the assessment year 1942-43, the assessee filed full details regarding the said partnership. In the form of return for that year Part III was a part requiring the disclosure of information in cases where the assessee was a partner in a firm or firms. In 1942-43, details about his partnership were disclosed but when the assessee made his returns for the assessment years 1943-44 and 1944-45 Part III was not filed up. A similar return for the assessment year 1944-45 was filled up by the assessee on 11-5-1945 though it bore the date 24-4-1945. Before and after this return for 1944-45, was made, a firm of chartered accountants on behalf of the assessee…

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