A PUSA LAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This reference arises under the income-tax Act. The Tribunal makes this reference at the instance of the assessee in connection with the assessment year 1974-75 and refers the following question of law for the consideration of this court :

(2.) It is necessary to notice the facts relevant for the purpose.

(3.) For the income-tax assessment year 1974-75, the assessee had filed his return of income declaring an income of Rs. 17,635 which was accepted under section 143(1) of the Income-tax Act (for short the "Act"). For the subsequent year 1975-76, when the Income-tax Officer was scrutinising the balance-sheet filed by the assessee, it was noticed that there was a balance of Rs. 26,805 outstanding due from Birla Bazar at the end of the accounting year relevant for the assessment year 1975-76. The Income-tax Officer investigated into the matter and found that the aforesaid sum of Rs. 20,000 represented two items of loan given by the assessee to the Birla Bazar. The loans were given on 10/09/1973, Rs 5,000 and on 22/10/1973, Rs 15,000. It was found that the loan transactions related to the previous year relevant to the income-tax assessment year 1974-75. The Income-tax Officer noticed that the balance-sheet as on 24/10/1973, consisting of assets and liabilities filed for the income-tax assessment year 1974-75 did not include the debt of Rs. 20,000 and the interest outstanding thereon. On the aforesaid facts, the Income-tax Officer prima facie came to the conclusion that there was an omission or failure on the part of the assessee to disclose fully and truly all the material facts relevant for the assessment year 1974-75. In that view, he initiated proceedings under section 147(a) of the Act by issuing a notice under section 148.