CHUNI LAL NAYYAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal under section 66 (1) of the Income-tax Act. The following question has been referred for out decision :-

(2.) THE matter arose in the following manner. THE firm Tulsi Ram Sham Sundar is a firm dealing in cloth at Amritsar. THEy also own a business C. L. Nayyar & Sons which do business in yarn. This firm has interest in three the registered partnership firms (a) Tulsi Ram Karam Chand of Amritsar, (b) Tulsi Ram Chuni Lal of Bombay and (c) Tulsi Ram Kanhaya Lal of Ahmedabad. In making their returns for the income according during the year 1943-44 the firm declared the income from their cloth firm, Tulsi Ram Sham Sundar, at Rs. 34,061. THE return also made mention of the fact that the firm had a share or interest in three other registered firms (the names of which have been mentioned above). THE assessees share of the income in the firms (a) Tulsi Ram Karam Chand of Amritsar and (b) Tulsi Ram Chuni Lal of Bombay was declared and with respect to the third firm, Tulsi Ram Kanhaya Lal of Ahmedabad the assessee said that they had 7/16th share in the business but the exact figure of their share was not available and should be contained from the Income-tax Officer proceeded to maker his assessment. He added up the income of the two cloth business with the Share of the income as declared in the other two registered partnership firms. He, however, omitted or forgot to take into consideration the income from the Ahmedabad firm, although it appears that he did make an enquiry from the Income-tax Officer, Ahmedabad, as to what the assessees share of the income of that firm was. THE assessment was made and demand orders were sent. Sub-sequently the query made from the Income-tax Officer of Ahmedabad brought a reply and the Income-tax Officer, Amritsar, realised that he had forgotten to take this figure consideration, while assessing the income-tax due. He took the view that this part of the assessees income fad escaped assessment and could be revised by having recourse to proceedings under section 34 of the Indian Income-tax Act. He according sent a notice to the assessees under Section 34 and revised the original assessment by adding the Ahmedabad income. THE assessees appealed to the Appellate Assistant Commissioner, but the appeal was dismissed. THE assesses objection was that their case was not covered by the provisions of Section 34 inasmuch as the Income-tax officer had not discovered the evasion in consequence of any definite price of information received by hum after the original assessment was completed. This contention was rejected by the Income-tax Appellate Tribunal on appeal but on application under Section 66 (1) of the Income-tax Act the Tribunal agreed to refer the question noted above for our decision.