Jai Parkash Gupta vs Commissioner of Income Tax

Gokal Chand Mital, J.—For the assessment year 1963-64, the taxable income was computed at Rs. 14,223 including an amount of Rs. 12,421 which was found to the assessee''s credit in the books of Metal Products of India. Since the assessee could not explain the amount, the same was surrendered by him and was shown in the return filed for the assessment year in question.

Later on, it was discovered that there were credits to the extent of Rs. 56,416.83 in the books of Northern India Motor Parts Manufacturing Co., Chandigarh, in the joint account of the assessee, Jai Bhagwan Gupta and Smt. Kaushlya Devi. Proceedings u/s 147(a) of the Income Tax Act, 1961 (hereinafter called "the Act"), for non-disclosure, fully and truly, of all material facts necessary for assessment of income chargeable to tax having escaped assessment, were initiated. In spite of issue of notice u/s 148 of the Act, the assessee did not file a revised return. The matter of reassessment came up before the Income Tax Appellate Tribunal, Delhi-camp, Chandigarh, and vide order dated July 20, 1977, the order of the Appellate Assistant Commissioner adding Rs. 7,667 to the income of the assessee was upheld after recording the following finding :

"In this case, the assessee never disclosed that there was a joint account in the books of Northern India Motor Parts Manufacturing Co. which showed credits of Rs. 56,498.83 and of which he was one of the joint holders. This discovery came to be made only after the original assessment was framed. The sum of Rs. 12,421 surrendered by the assessee in the original assessment has nothing to do with the credits in the joint account of the assessee and two other parties in the books of Northern India Motor Parts Manufacturing Co. The amount of Rs. 12,421 comprises two items, (1) Rs. 10,001.87 which was transferred from Prek Croff Corporation, Meerut, and (ii) Rs. 2,146.76 which was paid by the assessee to the State Bank of India, Meerut. It was these two amounts totalling Rs. 12,421 which was surrendered. The assessee in this case did not disclose fully and truly all material facts and, therefore, proceedings u/s 147(a) were validly initiated."

On a reference application filed by the assessee, the Tribunal has referred the following question for our opinion :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the reassessment proceedings u/s 147(a) were validly initiated ?"

On hearing counsel for the parties and on a consideration of the matter, we are of the opinion that the reassessment proceedings u/s 147(a) of the Act have been validly initiated as the assessee kept back his share of credit in Northern India Motor Parts Manufacturing Co. and the non-disclosure of the amount clearly gave jurisdiction for initiating the proceedings as the assesses did not fully and truly disclose all material facts necessary for framing an assessment and the non-disclosure amounted to escapement of assessment. Accordingly, we answer the question in the affirmative, i.e., in favour of the Revenue and against the asses-see, The assessee would be liable to pay the costs of these proceedings to the Revenue.