1986-VIL-381-CAL-DT

Equivalent Citation: [1988] 169 ITR 201, 66 CTR 115, 35 TAXMANN 169

CALCUTTA HIGH COURT

Date: 25.04.1986

MB MERCANTILE CO.

Vs

COMMISSIONER OF INCOME-TAX

BENCH

Judge(s)  : AJIT KUMAR SENGUPTA., DIPAK KUMAR SEN

JUDGMENT

The judgment of the court was delivered by

AJIT KUMAR SENGUPTA J.-In this reference under section 256(2) of the Income-tax Act, 1961, for the assessment year 1962-63, an interesting question of law arises as to whether the Income-tax Officer, not having completed the assessment within the normal period of limitation of four years prescribed by the Act can, by applying the provisions of section 271(1)(c) assume jurisdiction to make an assessment under section 143(3) of the Act.

A statement of case was filed by the Tribunal referring the following questions of law for determination by this court :

" (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provisions of section 271(1)(c) were attracted and as such justified in applying the provisions of section 153(1)(b) of the Income-tax Act, 1961, and in holding that the assessment was not time-barred ?

(2) Whether, on the facts and in the circumstances of the case, and particularly in view of the fact that the assessee made a disclosure under section 2111(4A) of the Income-tax Act, 1961, disclosing a sum of Rs. 1,14,092 being the peak credit for the relevant assessment year long before the assessment was taken up and completed, the Tribunal was justified in law and on a proper interpretation of the provisions of section 271(1)(c) of the said Act, in holding that the assessee had clearly concealed the income relating to the sum of Rs. 1,14,092 and the provisions of section 271(1)(c) were clearly attracted ? "

On August 29, 1978, this court directed the Income-tax Appellate Tribunal to prepare a supplementary statement of case annexing thereto all documents and records referred to in the appellate order and produced and filed before the Tribunal, in particular those which have been referred to by the Tribunal in its said order. Pursuant to the said order, a supplementary statement of case annexing copies of documents and records produced and filed by the assessee before the Tribunal had been submitted.

The facts of this case as would appear from the statement of case and the supplementary statement of case are stated hereafter:

The assessee is a firm which filed the return of its income for the assessment year 1962-63, on July 30, 1962, declaring an income of Rs. 5,219. On March 31, 1964, a survey report was submitted by the Inspector of Income-tax stating therein that the firm started its business during GD 2016 corresponding to November 1, 1959, to October 29, 1960, and the relevant assessment year is 1961-62. It appeared to the Inspector that the firm had taxable income and accordingly he suggested that a file might be started. On March 31, 1967, time to complete the assessment on the basis of the return filed by the assessee expired and no assessment was made by the Income-tax Officer till then.

On May 19, 1967, the assessee filed a disclosure petition under section 271(4A) of the Act disclosing an income of Rs. 2,48,962 for the assessment years 1960-61 to 1964-65. It was stated therein that the said income was earned in a large number of years and might be spread uniformly over a period of at least six years beginning from 1960-61.

On July 21, 1969, a notice under section 142(1) of the Act was issued to the assessee fixing the hearing on August 4, 1969. Before the Income-tax Officer, it was submitted by the assessee that the assessee had already made a disclosure under section 271(4A).

On August 21, 1969, a penalty notice under section 274(2) read with section 271(1)(c) referring the penalty proceedings to the Inspecting Assistant Commissioner was issued.

On August 25, 1969, assessment under section 143(3) relying on the statement made in the said disclosure petition and adding a sum of Rs. 1,14,092 as disclosed by the assessee representing the, peak of the cash credits as income from undisclosed sources, was made. The Income tax Officer further held that since it was a clear case of concealment of income within the ambit of section 271(1)(c), the period of limitation applicable was eight years under section 153(1)(b). Since the assessment was completed within eight years from the end of the assessment year in question, the assessment, according to the Income-tax Officer, was not barred by limitations.

The assessee preferred an appeal against the said order of assessment.

On April 21, 1971, the Commissioner of Income-tax rejected the disclosure petition on the following grounds:

"On a perusal of the assessment records, it appears that the assessee-firm was discovered on the basis of a survey and that the firm filed its return of income for the first time for the assessment year 1964-65 in response to a notice under section 139(2) of the Income-tax Act showing an income of Rs. 30,886. I also find that some of the so-called creditors in whose names the undisclosed income has been introduced in the books of account had confessed before the Department prior to the filing of the present petition by the assessee that they had only lent their names in some cases and that no money as such had, in fact, been advanced by them in those cases. The petition cannot, therefore, be said to be voluntary. In the circumstances, the petition is rejected."

By order dated August 2, 1971, the Appellate Assistant Commissioner confirmed the assessment and dismissed the said appeal of the assessee. It was contended before the first appellate authority that as the assessment was not completed within the period of four years specified in section 153(1)(a), it was barred by time and should, therefore, be cancelled. The Appellate Assistant Commissioner agreed with the finding of the Income-tax Officer that the cash credits represented the assessee's concealed income and the provisions of section 271(1)(c) were attracted and, therefore, the period of limitation of eight years specified in section 153(1)(b) of the Income-tax Act, 1961, governed the case. Since the assessment was completed within the period of eight years, the Appellate Assistant Commissioner rejected the contention of the assessee that the assessment was barred by limitation. Having initiated penalty proceedings under section 271(1)(c), as stated already, the Income-tax Officer referred the matter, for further action, to the Inspecting Assistant Commissioner, who, by his order under section 271(1)(c), held that it was only after the detection of the concealment by the Department that the assessee came up with the disclosure petition which was not accepted by the Commissioner of Income-tax. The Inspecting Assistant Commissioner further held that the assessee introduced its own money into its accounts in, the guise of loans and it was only when it was confronted with the evidence collected by the Department in the course of the survey that the assessee came up with the disclosure petition before the Commissioner of Income-tax. Holding that it was a clear case of concealment and that the provisions of section 271(1)(c) were applicable, the Inspecting Assistant Commissioner imposed upon the assessee a penalty of Rs. 45,000 by his order dated August 9, 1971.

Aggrieved by the said order of the Inspecting Assistant Commissioner levying a penalty of Rs. 45,000 under section 271(1)(c), the assessee preferred an appeal before the Tribunal.

The Tribunal heard both the appeals together-one against the assessment and the other against the penalty. On the question whether the assessment made within the period of eight years is valid or not, the Tribunal held as follows:

"We have considered the rival submissions. We do not find any force in the submission made on behalf of the assessee. The assessee filed the return on July 30, 1962, declaring an income of Rs. 5,219: It is only after the concealment was discovered by the Department on the basis of a survey that the assessee filed a disclosure petition on May 19, 1967. Even then the assessee did not file a revised return declaring the correct income. After the disclosure also, the assessee raised the ground relating to the addition of Rs. 1,14,092 before the Appellate Assistant Commissioner. Only after the disposal of the appeal by the Appellate Assistant Commissioner, the assessee filed an affidavit stating that it did not instruct the advocate to withdraw ground Nos. 2 and 3-ground No. 2 relates to the addition of Rs. 1,14,092. Even before the Tribunal, the assessee has raised the ground with regard to the addition of Rs. 1,14,092 but at the time of hearing, it has withdrawn this ground. The conduct of the assessee would clearly show that it has been contesting the addition of Rs. 1,14,092 even after the disclosure petition. Thus it is very clear that the disclosure petition was not filed voluntarily as the disclosure petition was filed after the survey. Thereafter, also, the assessee did not admit that it was its income. Thus the assessee has clearly concealed the income relating to the sum of Rs. 1, 14,092 which was not disclosed in the return filed. Thus the provisions of section 271(1)(c) are clearly attracted. Under section 153(l)(b), in a case which falls within section 271(1)(c), the period for completing the assessment would be eight years. Since this is a case where the concealment is clear and the provisions of section 271(1)(c) are clearly attracted, the assessment has been rightly made within a period of eight years as provided in section 153(1)(b). Hence, we do not find any illegality in completing the assessment after the period of four years but within a period of eight years. Accordingly, we hold that the assessment is valid. "

On the, question involved in the penalty appeal, i.e., whether the penal provisions of section 271(1)(c) were attracted and as regards the reasonableness of the quantum of penalty, the Tribunal held as follows in para. 9 of its consolidated order :

" We have considered the rival submissions. The Department detected the concealment of income on the basis of a survey and it was only after the detection that the assessee had come up with the disclosure petition. Even after the disclosure petition, the assessee was contesting the addition of Rs. 1,14,092, representing the loans. Thus it is very clear that the provisions of section 271(1)(c) are clearly attracted. In the disclosure petition, the assessee clearly admitted that the sum of Rs. 1,14,092 was its concealed income. In view of this, concealment is clearly proved beyond doubt. Further, the assessee never adduced any evidence to prove the loans. Thus, in our view, the facts of the case clearly prove that the loans are not genuine but represent the assessee's own income and the assessee has concealed the same. Thus the provisions of section 271(1)(c) are clearly attracted."

Mr. Pronob Pal learned counsel appearing for the assessee, has contended that provisions of section 153(1)(b) cannot have any application to the facts of this case. It is his contention that the Tribunal has misread the evidence and the finding is contrary to the evidence on record as would appear from the documents and records annexed to the supplementary statement of case.

Learned advocate for the Revenue has, however, supported the order of the Tribunal.

Section 153 prescribes the time-limit for completion of assessments and reassessments. The normal period of limitation is prescribed by section 153(1)(a). Under section 153(1)(b), an assessment can be completed before the expiry of eight years from the end of the assessment year in which the income was first assessable, in a case falling within clause (c) of sub-section (1) of section 271.

The Tribunal held that only after the concealment was detected by the Department on the basis of the survey did the assessee file a disclosure petition on May 19, 1967. Even then the assessee did not file revised returns declaring the correct incomes. The Tribunal also held that the assessee was contesting the addition of Rs. 1,14,092 before the Appellate Assistant Commissioner. Thus it is very clear that the disclosure petition was not filed voluntarily as it was filed only after the survey. According to the Tribunal, the assessee clearly concealed the income relating to the sum of Rs. 1,14,092, representing "loans " which was not disclosed in the returns filed. Thus, according to the Tribunal the provisions of section 271 (1)(c) are clearly attracted.

The said findings of the Tribunal are not warranted by the facts on record. As a matter of fact, the finding of the Tribunal is contrary to the evidence on record. The survey report was filed by the Inspector on March 31, 1964. The, assessee filed the return for the assessment year 1962-63, on July 30, 1962. In the survey report, there was no allegation that the assessee had concealed any income. The Inspector only stated that the firm had taxable income and a file may be started. But the file must have been started before the survey report as the assessee filed the return for the assessment year 1962-63, on July 30, 1962, itself.

Secondly, the Tribunal failed to appreciate that the assessee did not admit that a sum Of Rs. 1,14,092 was its concealed income. In the disclosure petition, the assessee stated that a sum of Rs. 2,48,962 was earned by it in different years. The categorical statement of the assessee in the disclosure petition was that the income of Rs. 2,48,962 was earned in a large number of years and the assessee wanted it to be spread over six years beginning from the assessment year 1960-61. Thus it could not be said that there was any admission by the assessee that the peak credits of the accounting year relevant to the assessment year 1962-63 was the concealed income of that year.

The normal period of limitation to complete the assessment for the assessment year 1962-63 was four years from the end of that assessment year. Section 153(1)(b) prescribes a longer time-limit for completion of assessment under section 143 or 144. The longer period under section 153(1)(b) can only be availed of by the Income-tax Officer if he is satisfied in the course of the assessment proceedings that there is, by the assessee, concealment of the particulars of his income or furnishing of inaccurate particulars of such income within the meaning of section 271(1)(c) and detailed inquiry at the assessment stage would require longer time. This satisfaction has to be arrived at in the course of the assessment proceedings. The Income-tax Officer may have to investigate into the allegations of concealment and find out the truth. The information as to the concealment may reach the assessing Income-tax Officer just before the end of the four-year period and the investigation may not be completed within such a short time. Accordingly, the longer time limit for completion of such an assessment would be available to the Income-tax Officer. But this presupposes that the Income-tax Officer has initiated the assessment proceeding within the normal period of limitation. Once the normal period of limitation for assessment has expired without initiating any proceeding for assessment, the Income-tax Officer cannot thereafter on the basis of a finding of concealment take advantage of the longer time limit of eight years. In that event, the provisions of section 147 for reopening the assessment would be completely nugatory. In the instant case, although the return was filed by the assessee on July 30, 1962, the Income-tax Officer did not initiate any proceeding till March 31, 1967, when the normal period of limitation expired. It was only on July 21, 1969, that the Income-tax Officer initiated the proceeding by a notice under section 142(1) of the Act. Since the assessment was already barred, the Income-tax Officer could not avail of the longer period of limitation. No proceeding can be initiated by the Income-tax Officer after the expiry of the normal period without recourse to section 147 of the Act. Since in this case the return was filed but no proceeding was initiated, the Income-tax Officer lost the right to invoke the provisions of section 147 as it could not be said that the income had escaped assessment. That is why the Income-tax Officer wanted to take the benefit of the longer period of limitation of eight years. The period of limitation cannot be extended under section 153(1)(b) at the discretion or the free will or option or choice of the Income-tax Officer. He cannot sit over the assessment with the expectation that after expiry of the normal period of limitation, some concealment or furnishing of inaccurate particulars of income might come to light. The Income-tax Officer has no jurisdiction to enlarge the period of limitation unless during the course of the pending assessment proceeding, he has, on the materials, come to the prima facie finding that section 271(1)(c) would be applicable to the facts of the case. It would not depend on the subjective satisfaction of the Income-tax Officer. He has to record a finding after making necessary enquiries why the assessment may not be completed within the normal period of limitation. He has to determine the facts which would clearly demonstrate that the assessment in such a case cannot be completed within the normal period of limitation having regard to the nature and magnitude of enquiry and that a longer period would be necessary. At this stage, that is, before the expiry of the normal period of limitation, the Income-tax Officer has to record the facts as regards the concealment supported by materials on record. Before such a finding is arrived at, the Income-tax Officer is also required to hear the assessee and after giving an opportunity to the assessee on the question of alleged concealment, he has to record his finding. The Tribunal in this case held that the assessee did not disclose the correct income in the return filed. Thus the provisions of section 271(1)(c) are clearly attracted and accordingly the provision of section 153(1)(b) was rightly invoked by the Income-tax Officer. These findings are contrary to the evidence on record. The Tribunal did not at all advert to the fact that the disclosure petition was filed on May 19, 1967, and the assessment was made on the basis of the said disclosure on August 25, 1969. Prior to that and within the normal period of limitation, there was no information before the Income-tax Officer as regards any concealment of income. The Income-tax Officer, therefore, did not have any jurisdiction to proceed with the assessment after expiration of the normal period of limitation.

In the case of Anadi Nath Chakraborty v. CIT [1967] 64 ITR 456, a Division Bench of this court considered a similar question under the provisions of the Indian Income-tax Act, 1922. In that case, for the assessment year 1946-47, a notice under section 22(2) was served on the assessee. He filed the return only in 1949 and a provisional assessment was made. The Income-tax Officer found later that the assessee had concealed some income in his return and he issued a notice under section 28(1)(c) on February 21, 1952, and an assessment was made in 1952, on a voluntary disclosure. The court observed as follows (p. 463):

" Under section 34, as it stood at the material time, no order of assessment under section 23 or of assessment or reassessment under subsection (1) of the section could be made after the expiry, in any case to which clause (c) of sub-section (1) of section 28 applied, of eight years and in any other case of four years from the end of the year in which the income, profits or gains were first assessable. The statement of the case before us shows that it was after the provisional assessment in November, 1949, that the Income-tax Officer found that the assessee had done some business in stationery which had not been disclosed in the return and he, consequently, issued notice under section 28(1)(c) on February 21, 1952. The case was, therefore, one where the assessment could have been completed within eight years from the end of the year in which the income, profits or gains were first assessable. " In that case after the completion of the provisional assessment, the Income-tax Officer found that there was concealment and accordingly the longer period of limitation was applicable.

In the case of Ram Bilas Kedar Nath v. ITO [1964] 54 ITR 11, the Allahabad High Court considered an identical question. In that case, the petitioner-firm had voluntarily filed returns for the assessment years 1953-54 and 1954-55. Best judgment assessments were made in respect of these years on the ground that there was default in complying with notices under section 22(2) and (4) of the Indian Income-tax Act, 1922. Those assessments were cancelled because the notices under section 22(2) had not been served. On March 28, 1960, the Income-tax Officer issued notices under section 34(1)(a) for those years but they were quashed by the High Court on the ground that the returns filed voluntarily were pending. On July 20, 1962, the Income-tax Officer again issued notices under sections 22(4) and 23(2) to which an objection was raised that the assessments were barred as the four-year period of limitation had already expired. Thereafter, the Income-tax Officer issued notices for rehearing of certain penalty proceedings under section 28(1)(a), which had been initiated before the notices under section 34(1)(a) were quashed. Thereupon, the attention of the Income-tax Officer was drawn to the fact that the proceedings under section 28(1)(a) had to be dropped because the notices under section 34(1)(a) had themselves been quashed. Notwithstanding this, the officer persisted in pursuing the penalty proceedings and also issued notices under section 22(4). The Officer had, in the meantime, even before the assessments were made, issued notices under section 46(5A) to a third party to withhold payment of certain sums due to the firm. The petitioners thereupon presented a petition under article 226 of the Constitution of India for writs for quashing the notices under sections 22(4), 28(1)(a) and 46(5A) and prohibiting the Income-tax Officer from proceeding with the assessments.

There, in the writ petition filed by the assessee, Manchanda J. held (at p. 14):

" No penalty notice in fact was ever issued under section 28(1)(c) of the Act during the course of the assessment proceedings under section 23(4) of the Act and when that assessment order was set aside and the Income-tax Officer was required to make an assessment on the basis of the voluntary returns filed by the assessee, he was bound to complete that assessment under section 23 of the Act within the normal period of four years provided for the completion of all assessments under section 34(3) of the Act, unless there existed a prima facie case for the applicability of the provisions of section 28(1)(c) of the Act. If for four long years the Income-tax Officer had not been able to glean any information from any outside source of any concealment and no notice under section 28(1)(c) was issued when the assessment under section 23(4) was completed by him, he cannot, on any theoretical considerations or on the remote possibility of discovering some concealment in the future, arrogate to himself the right to complete the assessment after the lapse of four years. If that were the law, then no assessment need ever be completed within the normal period of four years and the sword of Damocles could be kept hanging over the head of the assessees for all time to come. The Income-tax Officer cannot by merely saying to himself that some day he may discover something which might justify his applying the provisions of section 28(1)(c) confer upon himself the necessary jurisdiction to make an assessment under section 23 without any bar of limitation.

Some sanctity requires to be attached to the period of limitation of four years which the Legislature at the relevant time had provided in section 34(3) for the completion of assessments. That limitation, on the interpretation sought to be placed by the Department in this case, would virtually be a dead letter, as in every case the Income-tax Officer could keep assessments pending, again theoretically speaking, till the end of time on the ground that some concealment or furnishing of inaccurate particulars might come to light at some distant future date. "

The period of limitation, therefore, cannot be extended at the sweet will and pleasure of the Income-tax Officer and the sword of Damocles cannot be kept hanging over the head of the assessee for all time to come, on the ground that some concealment or furnishing of inaccurate particulars might come to light at some distant future date.

In a subsequent decision of the Allahabad High Court in the case of CIT v. Surajpal Singh [1977] 108 ITR 746, the Allahabad High Court approved the reasoning in the case of Ram Bilas Kedar Nath [1964] 54 ITR 11(All). In that case, for the assessment year 1961-62, the assessee, SS, a Hindu undivided family, filed its return on August 19, 1961. On August 1, 1962, it filed a revised return including therein income from property which bad not been included in the original return. No action was taken thereon by the Income-tax Officer, Dt. III(1), Kanpur. Years later, the Income-tax Officer, SS Circle, Kanpur, issued a notice to the assessee under section 22(2) of the Indian Income-tax Act, 1922, followed by a notice under section 22(4). In the absence of any response, the Income-tax Officer made an ex parte assessment under section 23(4) on total income of Rs.10,000 including a sum of Rs. 6,000 being income from property. On an application under section 27, this assessment order was cancelled on March 15, 1956, on the ground that the assessee had filed returns before the Income-tax Officer, Dt. III(1). An assessment order was passed on March 25, 1970, on a total income of Rs. 66,604 under section 143(3) of the Income-tax Act, 1961 (the new Act), rejecting the assessee's contention that the assessment was time-barred. The Income-tax Officer also issued a notice under section 271(1)(c) of the new Act as he was of the opinion that the assessee had concealed a part of his income. On appeal, the Appellate Assistant Commissioner and the Appellate Tribunal held that the assessment was time-barred. The court observed (p. 753):

" There is, however, a decision of a Division Bench in Mir Suba Hari Bhakta v. ITO [1960] 39 ITR 617 (All), which says that proceedings under section 22(4) or section 23(2) can be taken even after the expiry of four years, because the appropriate stage for finding out as to whether the period of limitation is four years or longer is when the assessment order is passed. The period of limitation contained in section 34(3) applies to the passing of the order and not to any anterior stage of taking proceedings. This decision lays down that an assessee cannot question the jurisdiction of the Income-tax Officer to take assessment proceedings after the expiry of the period of four years from the end of the relevant assessment year on the ground of limitation. But this decision is no authority against the proposition that the Income-tax Officer must within the normal period of four years initiate penalty proceedings by issuing notice under section 28(3) or may record a finding or place some material on record to indicate that the case is one to which section 28(1)(c) will apply and as such the assessment can be made without the period of limitation. If the Income-tax Officer does anything after the expiry of four years, he can certainly be challenged before a court of law to disclose the material on the basis of which he proposes to take the case out of the normal period of limitation. However, it is not necessary to dwell upon this point any further, because the instant case is one to which section 28(1)(c) would never be attracted."

In the case before us, the Income-tax Officer has not recorded any finding or brought any material on record within the period of four years to show that it was a case of concealment. If the Income-tax Officer relies on the exception provided in section 153(1)(b) of the Act, it was necessary for him to have recorded the finding or to have placed on record within the normal period of limitation, namely, four years, some material to show that the assessee was guilty of concealment. This, the Income-tax Officer had failed to do. He had merely allowed the four-year period to pass without taking any action on the return of income filed by the assessee and in these circumstances, the Income-tax Officer cannot avail himself of the exception contained in section 153(1)(b). The Income-tax Officer cannot sleep over the assessment and after a lapse of four years, on the alleged discovery of some concealment, arrogate to himself the right to complete the assessment within the extended period of limitation.

For the reasons aforesaid, we are of the view that the assessment in this case was barred by limitation. After the expiry of the time for completing the assessment, no assessment proceeding can be initiated on the ground that subsequently concealment has been detected within the meaning of section 27l(1)(c). Nor can the assessment be completed within the extended period of limitation. What is dead cannot be revived. The penalty proceeding has to be initiated in the course of the assessment proceeding. The penalty proceeding cannot precede the assessment proceeding. In that view of the matter, question No. 1 is answered in the negative and in favour of the assessee.

We now turn to the second question.

As indicated earlier, the assessee filed return on July 30, 1962, for the assessment year 1962-63. On March 31, 1964, a survey report was given by the Inspector of Income-tax. He merely suggested that the assessee was having taxable income and a file might be started. There is no question of detection of any concealment. Had the return not been filed, it could have been said that detection was made about concealment. But where the return is filed and no assessment is made by the Income-tax officer and he allows the assessment to get time-barred, even if any disclosure petition is filed after the assessment is barred, it cannot be ground for imposing any penalty. The disclosure petition made under section 271(4A) was rejected by the Commissioner in 1971. On the basis of the disclosure petition, assessment could have been reopened and appropriate proceedings could have been initiated. But in this case, that was not possible as, after the return was filed, no assessment was made by the Income-tax Officer. The assessee in the disclosure petition did not admit that the peak credit was an income for the assessment year 1962-63. The Commissioner of Income-tax who rejected the disclosure petition also proceeded on incorrect facts. He said that the assessee-firm was discovered on the basis of survey and the firm filed its return for the first time for the assessment year 1964-65. Admittedly, the firm filed its return for the assessment year 1962-63 on July 30, 1962, which fact escaped the attention of the Commissioner. If the disclosure had been accepted, the assessment could have been made and the Commissioner could have either waived or reduced the penalty imposable depending on the facts and circumstances of the case. The assessee in the disclosure petition disclosed an income of Rs. 2,48,962 stating that the said income was earned by the firm during the course of business activities from year to year from its inception. That disclosure was made on May 19, 1967. Till then, no proceedings were initiated by the Department against the assessee. For the subsequent years, that is to say, for the assessment year 1963-64, penalty was imposed on the self-same ground that the assessee made a disclosure, but the Tribunal deleted the penalty on the ground that even though the Commissioner of Income-tax did not accept the disclosure petition, all the facts were produced before the assessing officer. The Tribunal held that it is undoubtedly true that the assessee who has put forward and disclosed the whole amount cannot be placed in a worse position than the assessee who has filed a lame explanation and escaped penal consequences. That apart, the Income-tax Officer has to establish that the amount added was the income for the relevant year. In any event, the assessee made a disclosure long before the assessment was taken up and completed. It will appear from the order sheet that it was only on July 21, 1969, that the Income-tax Officer initiated the proceeding by issuing a notice under section 142(1). For the reasons aforesaid, we are of the view that the Tribunal was not justified in holding that the assessee had concealed its income. In that view of the matter, the second question also is answered in the negative and in favour of the assessee.

There will be no order as to costs. DIPAK KUMAR SEN J.-I agree.

 

 

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