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Lakshmi Chand Swaika Vs. Income-tax Officer, b Ward and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberMatter No. 686 of 1973
Judge
Reported in[1978]112ITR212(Cal)
ActsIncome Tax Act, 1961 - Sections 148, 282(2) and 283(2)
AppellantLakshmi Chand Swaika
Respondentincome-tax Officer, "b" Ward and ors.
Cases Referred and M. X. De Nornha & Sons v. Commissioner of Income
Excerpt:
- .....the time of original assessment and this involves an extra tax of rs. 19,440 plus extra taxes on disclosed income. hence, this proposal.'3. it further appears that the said recorded reasons have been explained in paragraph 8 of the affidavit of sanat kumar roy affirmed on 20th november, 1975. the evidence of r.a. goel has also been annexed. on these materials, in my opinion, it cannot be said that there were no materials for the income-tax officer to believe that there was failure or omission on the part of the assessee to disclose fully or truly all materials which were relevant facts and as a result of such failure the income of the assessee had escaped assessment. my attention was drawn to some of the decisions dealing with this question. whether in a particular case there were.....
Judgment:

Sabyasachi Mukharji, J.

1. This is an application challenging the notice dated 27th March, 1973, under Section 148 of the Income-tax Act, 1961.' The impugned notice relates to the assessment year 1964-65. Two contentions were urged in support of this application. It was contended that at the time of the issuance of the notice the firm was dissolved and the income-tax department had knowledge of that fact. In the premises, it was contended that the notice was not properly addressed. The notice was addressed in the name of the firm. It is not in dispute that the notice has been served but the contention was that the notice was not properly addressed. In this connection, reliance was placed on Sub-section (2) of Section 283 of the Income-tax Act, 1961, as well as on Clause (a) of subsection (2) of Section 282 of the said Act. But, in my opinion, the said pro-visioi s are permissive provisions and a notice in the case of a dissolved firm can be addressed to the firm itself. For this proposition reliance may be placed on the observations in the cases of Ramnivas Hanumanbux Somani v. S. Venkataraman, Income-tax Officer : [1959]37ITR329(Bom) , Sonu Led v. Commissioner of Income-tax : [1938]6ITR94(Patna) , Commissioner of Income-tax v. Devidayal and Sons : [1968]68ITR425(Bom) , V. D. M. R. M. Ramana-than Chettiar v. Commissioner of Income-tax [1927] 2 ITC 474 (Rang) , Rama Guha v. Income-tax Officer, : AIR1967Cal348 and M. X. De Nornha & Sons v. Commissioner of Income-tax : [1950]18ITR928(All) . On that ground I am unable to accept the contention that the notice was not pro-perly addressed.

2. The next contention was that there were no materials upon which it could be said that income of the assessee had escaped assessment due to any failure or omission on the part of the assessee to disclose fully or truly all material and relevant facts. The recorded reasons upon which the assessment was reopened and upon which the Commissioner granted sanction was produced before me. The same reads as follows :

'The original assessment was completed under Section 144 for non-compliance of the notice under Sections 143(2) and 142(1) and the said quantum of income has been confirmed in appeal by the A.A.C. It now appears that during this year he introduced cash credit in his books to the tune of Rs. 1,35,000 as borrowing from R.A. Goel, who is a confessed name-lender. This represents his income from some undisclosed source which has escaped assessment due to failure on the part of the assessee to disclose truly and fully all material facts at the time of original assessment and this involves an extra tax of Rs. 19,440 plus extra taxes on disclosed income. Hence, this proposal.'

3. It further appears that the said recorded reasons have been explained in paragraph 8 of the affidavit of Sanat Kumar Roy affirmed on 20th November, 1975. The evidence of R.A. Goel has also been annexed. On these materials, in my opinion, it cannot be said that there were no materials for the Income-tax Officer to believe that there was failure or omission on the part of the assessee to disclose fully or truly all materials which were relevant facts and as a result of such failure the income of the assessee had escaped assessment. My attention was drawn to some of the decisions dealing with this question. Whether in a particular case there were materials for the Income-tax Officer to form the belief that there was omission or failure on the part of the assessee to disclose fully or truly all material facts is a question of fact dependent upon the facts of each case. Having regard to the nature of the materials upon which the revenue has relied on in this case, in my opinion, it cannot be said that there were no materials from which, prima facie, such belief can be formed that there was failure or omission on the part of the assessee to disclose truly all basic and primary facts as a result of which the income of the assessee escaped assessment. In the aforesaid view of the matter, the challenge to the notice cannot, in my opinion, be sustained in this case.

4. The application, therefore, fails and is accordingly dismissed. Rule nisi is discharged. Interim order, if any, is vacated.

5. There will be no order as to costs.

6. There will be a stay of operation of this order for six weeks.


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