Hari Swarup, J.
1. The question of law referred for our opinion by the Income-tax Appellate Tribunal at the instance of the assessee is:
'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the Income-tax Officer acquired valid jurisdiction under Section 147 of the Income-tax Act, 1961 ?'
2. The assessment year in question is 1957-58. The facts found by the Tribunal are that the assessee, Raj Bahadur Bhatnagar, was a partner in the firm styled, Messrs. Bhatnagar Brothers. In the year relevant to the assessment year 1957-58 the assessee brought a sum of Rs. 13,000 in the firm as his capital. The Income-tax Officer thinking that this amount of Rs. 13,000 had been introduced by the assessee on behalf of the Hindu undivided family of which the partner was a junior member proceeded to assess the Hindu undivided family by issuing a notice to it under Section 147(a) of the Income-tax Act, 1961. Ultimately, the Tribunal deleted this amount from the assessment of the Hindu undivided family. The Tribunal felt that although there was a possibility of the amount coming from the Hindu undivided family there was not sufficient evidence to establish it as a fact. It observed in the order that no pronouncement was being made as to whether the sum of Rs. 13,000 had been satisfactorily explained by the firm, Bhatnagar Brothers, or not. Thereafter, the Income-tax Officer issued a notice to the present assessee as an individual under Section 147(a) of the Income-tax Act, 1961, and included in his assessment the sum of Rs. 13,000 along with the income got by Mm as his share in the partnership. The assessee challenged the order before the Appellate Assistant Commissioner on the ground that the conditions precedent for the issue of the notice under Section 147(a) did not exist. The Appellate Assistant Commissioner of Income-tax accepted the assessee's plea and set aside the assessment. The Commissioner of Income-tax went up in appeal against that order before the Tribunal and the Tribunal allowed the appeal and held that the Income-tax Officer had jurisdiction to proceed under Section 147(a) of the Act. The assessee feeling aggrieved has got the present question referred to this court for opinion.
3. The Tribunal has held that the circumstance that the assessee had introduced Rs. 13,000 in the partnership as his capital was sufficient reason for the Income-tax Officer to believe that the income of the assessee chargeable to tax had escaped assessment. It further held that the assessee had not filed any return of his income and thus the second condition of Clause (a) of Section 147 of the Act regarding omission or failure on the part of the assessee to make the return was also present.
4. Learned counsel for the assessee has raised three contentions: (1) that there existed no reason for the Income-tax Officer to believe that any income chargeable to tax had escaped assessment; (2) that the Income-tax Officer had no right to change his opinion and proceed under Section 147 after he had first come to believe on the same facts that the amount represented the income of the Hindu undivided family and not the present assessee; and (3) that it was not a case of any omission or failure to file a return by the assessee.
5. In our opinion the circumstance that Rs. 13,000 had been introduced in the present partnership by the assesses as his capital was a good reason for making the Income-tax Officer believe that the amount represented the income of the assessee and that it had escaped assessment. We are of opinion that the Income-tax Appellate Tribunal was right in holding that the Income-tax Officer had reason to believe that the income of the assessee chargeable to tax had escaped assessment.
6. As regards the contention that the Income-tax Officer could not changehis opinion, i.e., after having once treated it as belonging to the Hindu undivided family could not subsequently have reason to believe the income asof the individual, we find that the argument is untenable. After the Tribunalhad held that the money was riot proved to be of the Hindu undivided familyand the assessment against the Hindu undivided family had been set asidethere was no bar to the Income-tax Officer proceeding against the assesseeas an individual. The bar to change of opinion cannot arise where therehas been no prior proceedings of assessment against a particular assessee.The question can arise only wherein regard to the same assessee the matteris once decided and is then reopened in the form of reassessment. Learnedcounsel in support of his contention relied upon certain decisions. Butthey are all cases where the Income-tax Officer had made an assessmentoriginally under Section 22 and had then reopened it under Section 34. Inthese circumstances it was held that the assessing authority had no rightto change his previous opinion about the non-taxability of the amount andtax the same amount under Section 34 of the Indian Income-tax Act, 1922,on a change of his opinion. No case has been cited in which the assessment was made in respect of any assessee for the first time under Section 34 of the old Act or Section 147 of the new Act and the bar of changeof opinion might have been resorted to challenge the assessment.Section 147(a) does not debar an Income-tax Officer from having reason tobelieve that the escaped income belonged either to A or to B. There may befacts which may justify the two alternate inferences, viz., that the incomemight belong to A or might belong to B. If that is so the Income-taxOfficer will have jurisdiction to proceed against either of the two persons.In case the proceeding against one person fails because it is not provedthat the income belonged to him, it would not mean that the Income-taxOfficer will have no jurisdiction to proceed against the other person inrespect of whom also the circumstances are such which may give himreason to believe that it was his income which had escaped assessment totax. Thus, in the present case, the finding that income did not belong tothe Hindu undivided family will not debar the Income-tax Officer to takeproceedings against the present assessee as an individual under Section 147 of the Act.
7. The contention of the learned counsel in respect of Ms third point is that it is only the opinion of the assessee about the taxability of his income that makes him liable to file the return and if he is of the opinion that his income was not taxable he need not file a return, and if he forms the opinion that his income was not taxable, the non-filing of return by him will not amount to omission or failure on his part to make the return within the meaning of Section 147(a) of the Act. We are unable to accept this contention. Once it is found as a fact that the income of the assessee was of such an amount which was above the minimum non-taxable limit, the assessee had to file a return under Section 22(1) of the Indian Income-tax Act, 1922. In case he omits to file such a return it would be a case of omission to file the return. In the case of Pannalal Nandlal Bhandari v. Commissioner of Income-tax : 41ITR76(SC) it was observed by the Supreme Court :
'Once a notice is given by publication in the press and in the prescribed manner under Section 22(1) every person whose income exceeds the maximum amount exempt from tax is obliged to submit a return and if he does not do so it will be deemed that there was omission on his part to make a return within the meaning of Section 34(1)(a).'
8. The contention of the learned counsel that this observation of the Supreme Court was applicable only to the cases of non-residents and not to the cases of residents is also without substance as the next sentence in the judgment of the Supreme Court is:
'There is no warrant for the submission that Section 22(1) applies to residents only and that an obligation to make a return on the part of a non-resident can only arise if a notice under Sub-section (2) is served.'
9. Residents are certainly under an obligation to submit a return and an omission to file a return which results in the escapement of an income from taxation will bring the case within the clutches of Clause (a) of Section 147 of the Income-tax Act, 1961.
10. For the reasons given above, our answer to the question referred to us is in the affirmative and against the assessee. The Commissioner of Income-tax will be entitled to his costs which we assess at Rs. 200.