Om Prakash, J. - (1.)The following questions have been referred by the Income-tax Appellate Tribunal under Section 256(2) of the Income-tax Act, 1961 (briefly, "the Act"), for the opinion of this court :
"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the proposal submitted to the Commissioner under Section 147(a) on March 20, 1965, was too vague to show that there were any reasonable grounds for the Income-tax Officer to believe that there had been any non-disclosure of facts having a material bearing on the question of underassessment ?

(2.)Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in cancelling the reassessment made under Section 143(3)/l47(a) of the Income-tax Act, 1961 ?"
2. The facts as briefly stated are that, for the consecutive assessment years 1957-58 to 1959-60, the Income-tax Officer made assessments under Section 143(3) of the Act on the assessee, a registered firm, at Rs. 4,03,952, Rs. 1,27,210 and Rs. 1,17,553, respectively. At the stage of the original assessments, the assessee claimed having taken hundi loans to the tune of rupees two lakhs from various parties during the accounting year 1956-57 relevant to the assessment year 1957-58. The said loans were accepted to be genuine in the original assessments and the interest liability having been claimed by the assessee on such loans, was allowed for all these years by the Income-tax Officer. Later, the Income-tax Officer was of the view that income relating to these years had escaped assessment and he, therefore, issued notices under Section 148 with a. view to framing reassessments under Section 147(a) of the Act. In the assessments made under Section 143(3)/148 of the Act, the Income-tax Officer commonly observed : "During the course of assessment proceedings for succeeding years it was found that the assessee took hundi loans from several parties and these loans were not genuine."

(3.)That was why the Income-tax Officer issued notices under Section 148 and initiated reassessment proceedings under Section 147(a) of the Act.