DHANSIRAM AGARWALLA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 250(1) of the Income-tax Act, 1961 (for short, " the Act" ), by the Income-tax Appellate Tribunal, Guwahati Bench, Guwahati, at the instance of the assessee. The assessee sought reference of six questions, but the Tribunal referred only the following two questions :

(2.) THE relevant assessment year is 1972-73. THE assessee is the proprietor of a business engaged in manufacture and sale of iron and steel pipes, buckets and in fabrication of steel structures. Original assessment was made under Section 143(3) of the Act by the Income-tax Officer determining the income at Rs. 27,230. THEre was an appeal before the Appellate Assistant Commissioner and a further appeal before the Tribunal. THE assessment on the basis of the Tribunal's order was revised under Section 254. Assessment for the assessment year 1973-74 was dealt with by the successor Income-tax Officer. He reopened the assessment for the year 1972-73 in terms of Section 147(a) by issuing a notice under Section 148 on the ground that the assessee failed to make full and true disclosure of the stock pledged to the State Bank of India, Tinsukia, which was in excess of the value disclosed in the account books and balance-sheet of the assessee by a sum of Rs. 5,04,137. THE assessee did not submit any return or reply in response to this notice. THE Income-tax Officer subsequently issued a notice in terms of Section 142(1) of the Act and it was served on the assessee on July 26, 1980. In spite of time being granted repeatedly to him, the assessee failed to comply with the terms of the notice. THEreupon the Income-tax Officer completed the assessment under Section 144.

(3.) QUESTION No. 1.--It is argued for the assessee that Section 147 of the Act could not have been validly invoked by the Income-tax Officer since the conditions precedent contemplated therein did not exist. It is pointed out that the Tribunal did not set aside the findings forming grounds for the ultimate decision of the Commissioner of Income-tax. Learned counsel sought to justify the findings arrived at by the Commissioner of Income-tax. It is also contended that the principles of natural justice were violated by the Income-tax Officer.