RAJ BAHADUR BHATNAGAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question of law referred for our opinion by the Income-tax Appellate Tribunal at the instance of the assessee is:

(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.) 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.