BABU RAM NAGAR MAL Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) THE petitioner-firm has challenged the issuance of notice by the Income-tax Officer by way of this petition under articles 226 and 227 of the Constitution of India.

(2.) THE petitioner-firm carried on business in fruits and vegetables as a commission agent as well as on its own account. Assessment was completed by the Income-tax Officer for the assessment year 1972-73, vide order dated March 29, 1975, on the basis of the returns filed under Section 139 (1) of the Income-tax Act, 1961 (for short, "the Act" ). The assessee had shown income by way of commission at Rs. 51,661. An addition of Rs. 25,000 to the assessee's income was, however, made by the Income-tax Officer on the ground that quantitative details regarding the sales had not been shown and, therefore, addition was required to be made in the trading account. This addition was, however, deleted in appeal, vide order dated January 22, 1977.

(3.) THE case of the petitioner is that the regular assessment had been completed by the Income-tax Officer, vide order dated March 29, 1975, and all the facts had been declared at that time. Therefore, the assessee could not be charged with the suppression of any material facts regarding income by way of commission. It is also stated that the period of limitation was four years in a case where notice was issued under Clause (b) of Section 147 of the Act. The said clause empowers the Assessing Officer to issue a notice to an assessee where, in consequence of information in his possession, the Income-tax Officer has reason to believe that income chargeable to income-tax had escaped assessment for any assessment year. It is stated that the case of the assessee did not also fall under Clause (a) of Section 147 of the Act because the assessee had disclosed all the relevant and material facts at the time of regular assessment and, therefore, it cannot be assumed or alleged that the assessee had omitted or failed to fully and truly disclose all the material facts. Therefore, it is Clause (b) of Section 147 which could be invoked if the Assessing Officer had in his possession certain information leading to the belief that certain income had escaped assessment.