COMMISSIONER OF INCOME TAX Vs. KALAPPA

JUDGEMENT

(1.) This is a reference under Section 256(1) of the I.T. Act, 1961. The Tribunal has referred the following question of law for the opinion of this Court:

(2.) The assesses in an individual. The assessment year is 1973-74. The original assessment had been completed by the I.T.O. under Section 143 (1) on the income declared at Rs. 21.640/-. Subsequently, on the basis of the information that the purchaser of the lorry belonging to the assessee had disclosed the purchase value at Rs. 45,000/- to obtain a loan from the Bank, the I.T.O. has reopened the assessment by invoking the provisions of Section 147 of the Act. On appeal, the Appellate Assistant Commissioner rejected the assessee's contention and upheld the reopening of the assessment. But the Tribunal held to the contrary. The Tribunal was of the opinion that the assessee had made available all the informations and disclosed all the primary facts necessary for the assessment along with the return and that reopening of the assessment was, therefore, bad in law. The Tribunal also held that there has been no omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment. The Tribunal has given detailed reasons in support of that conclusion on the material facts disclosed by the assessee at the first instance. On the facts found? in our opinion, the conclusion of the Tribunal is justified.

(3.) A case similar to the present one has been considered by the Supreme Court in Gemini Leather Stores v I.T.O., Agra (100 ITR 1). The Supreme Court while reversing the decision of the High Court has observed that if the assessee has disclosed primary facts relating to transactions, it was for the officer to make the necessary enquiries and draw proper inference as to whether the income seturned is correct or not. It would be the plain duty of the officer to make an enquiry and if he did not make an enquiry, it is a case of oversight and it could not be said that the income chargeable to tex had escaped assessment by reeson of the omission or failure on the part of the essessee to disclose fully any truly all material facts. The ratio of the decision is clearly applicable to the facts of the present case. Indeed, the facts of the present case are better than those referred to in the aforesaid judgment of the Supreme Court. In the result, we answer the question in the affirmative and against the Revenue.