K.S. HEGDE, J. - (1.)THIS is a reference under s. 66(1) of the Indian IT Act, 1922, which, for convenience sake, hereinafter will be referred to as the "Act". The Tribunal, Madras Bench, has submitted the question "whether the assessments made under s. 34(1)(a) of the 'Act' are valid" for the opinion of this Court as a question of law arising from its consolidated order made on 13th Nov., 1962, in I.T. As. Nos. 9978 to 9981 of 1961-62 on its file.
(2.)ON 24th Feb., 1954, the assessee and six others started a new firm known as Murthy Silk House. Out of the seven partners of the firm, two, namely, Shantamma and Shivamma, are his wives, one was his father-in-law, another his step-sister and yet another his maternal aunt. In the deed of partnership, Shantamma and Shivamma were not described as wives of the assessee. ON the other hand, they were described as daughters of Venkataramaniah and Puttashamiah, respectively. For the asst. yrs. 1955-56 to 1958- 59, the assessee furnished returns of his income, wherein he included only his share of income from Murthy Weaving Factory as well as from Murthy Silk House. The assessee was a partner in Murthy Weaving Factory, which firm was dissolved on 1st April, 1954. Thereafter, the assessee took over that factory as his individual concern. In the return for the asst. yr. 1955-56, the assessee had given the names of the partners of Murthy Silk House but omitted to give any address of theirs except saying "Bangalore." Even that detail was not furnished during the three succeeding years.
In the returns submitted by the assessee for the asst. yrs. 1955- 56 to 1958-59, he did not disclose the profits realised by his two wives in Murthy Silk House. Even otherwise, he did not bring to the notice of the ITO that his two wives are the partners in Murthy Silk House. The ITO proceeded to assess the assessee without taking into consideration the profits realised by his wives in Murthy Silk House. Subsequently, he came to know that Shantamma and Shivamma, two of the partners in Murthy Silk House, are the wives of the assessee. Hence, after issuing necessary notices under s. 34(1) of the "Act", he proceeded to reassess the assessee after taking into consideration the profits realised by Shantamma and Shivamma from Murthy Silk House in the respective assessment years after treating those profits as income that had escaped assessment. The notices under s. 34 having been issued more than four years after the assessments in question, admittedly the Department can get no assistance from s. 34(1)(b) of the "Act". It is not denied that if the provisions of s. 34(1)(a) are attracted to the facts of the case, the reassessment is within time. Therefore, the only question for decision is whether, on the facts found by the Tribunal, application of s. 34(1)(a) is justifiable under law. It is not denied that in view of s. 16(3) of the "Act", while arriving at the total income of the assessee for the purpose of assessment, the profits earned by his wives, as partners in a firm in which he is a partner, has to be included in his income. It is also not denied that in his return the assessee did not include the profits realised by his wives from Murthy Silk House.

It was contended on behalf of the assessee that neither under s. 22 nor under any other provision of law a duty is cast on the assessee to include in his return the income of his wives howsoever arising. Therefore, it was said that the assessee's failure to include the income of his wives, with which we are concerned in these cases, is insufficient to attract the provisions of s. 34 (1)(a). The contention that there was no duty cast on the assessee to include the income of his wives falling under s. 16(3) in his return was accepted by the Tribunal. His contention in this regard receives support from the decision of the Bombay High Court in D.R. Dhanwate vs. CIt (1961) 42 ItR 253(Bom). In view of the fact that the Tribunal has accepted that contention and the Department has not challenged that conclusion, we need not go into the same.

(3.)BUT the Tribunal has found as a fact that the assessee had failed to disclose fully and truly all material facts necessary for his assessment for the assessment years in question. The finding of the Tribunal on this point is a finding of fact. The Tribunal has given good reasons in support of that finding. Therefore, the correctness of that finding is not open to examination by this Court. The Tribunal had found that at the time of the assessment, the ITO was not aware of the fact that Shantamma and Shivamma are the wives of the assessee. It has further come to the conclusion that no material was placed before the ITO from which he could have concluded that they were the wives of the assessee. Therefore, if we are to come to the conclusion that the assessee had a duty to disclose fully and truly all material facts necessary for his assessment, then there can be no doubt that the assessments under s. 34(1)(a) of the "Act" are valid. Therefore, the only question that arises for decision is whether the assessee had a duty to disclose to the ITO that Shantamma and Shivamma are his wives.
We are unable to agree with Mr. K. Srinivasan, the learned counsel for the assessee, that no duty was cast on his client to disclose the fact that Shantamma and Shivamma, the two partners of Murthy Silk House, are his wives. Sec. 34(1)(a) of the "Act" presupposes that every assessee has a duty to disclose fully and truly all material facts necessary for his assessment. The ITO could not have included in the total income of the assessee the profits earned by Shantamma and Shivamma in Murthy Silk House, unless he had the knowledge that those persons are the wives of the assessee. Hence, the information that they are the wives of the assessee was material information necessary for the assessee's assessment. It was the duty of the assessee to place that information before the ITO. In Calcutta Discount Co. Ltd. vs. ITO (1961) 41 ITR 191 (SC), Companies District I, Calcutta, the Supreme Court laid down that to confer jurisdiction under s. 34 to issue notice in respect of assessments beyond the period of four years, but within a period of 8 years, from the end of the relevant year, two conditions had to be satisfied; the first was that the ITO must have reason to believe that income, profits and gains chargeable to income-tax had been under-assessed; the second was that he must have also reason to believe that such "under-assessment" had occurred by reason of either omission or failure on the part of an assessee to make a return of his income under s. 22, or omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year; both those conditions were conditions precedent to be satisfied before the ITO could have jurisdiction to issue a notice for the assessment or reassessment beyond the period of four years but within the period of eight years, from the end of the year in question. The Court further ruled that the words "omission or failure to disclose fully and truly all material facts necessary for his assessment for that year", used in s. 34, postulate a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. In view of that decision, it is no more open to contend that the assessee had no duty to disclose to the ITO the fact that Shantamma and Shivamma are his wives.