MANAKLAL PORWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (" the Tribunal" herein), has referred the following questions of law arising from its order for our opinion:

(2.) THE assessee is a registered firm and the assessment year in question is 1961-62. THE assessee-firm filed its return for the year under reference declaring an income of Rs. 52,110. Shri Manaklal Porwal, a partner of that firm, had also filed an individual return of income. THE ITO came to the conclusion that the assessee-firm was not a genuine firm and the business of the firm, in fact, was exclusively that of Shri Manaklal Porwal. THE ITO, therefore, assessed the income which was earned in the name of the assessee-firm in the hands of Shri Manaklal Porwal (Individual) and passed the following order on January 31, 1965 :

(3.) THE assessee-firm questioned the validity of the reopening of the assessment under Section 147 of the Act. THE AAC was of the view that it was reopened under Section 147(a). THE Tribunal was of the view that the reopening was under Section 147(b) as from the reasons recorded by the ITO and other circumstances, it is clear that the ITO had gathered information from the order dated March 13, 1969, of the AAC which was passed in the case of Shri Manaklal Porwal (Individual) that income in the case of the firm, M/s. Manaklal Porwal, had escaped assessment. It may be mentioned here that in CIT v. Ayodhyakumari (D.B.C.I.T. Ref. No. 29 of 1971, decided on February 3, 1984-[1985] 154 ITR 604), a Division Bench of this court to which one of us (S, K. Mal Lodha J.) was a party, after considering various authorities, held as under (p. 611):