Ajit K.Sengupta, J. - (1.)This is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the assessee, for the assessment year 1959-60.
(2.)During the accounting year relevant to the assessment year 1959-60, the assessee had sold 1,000 shares of M/s. Electrical Manufacturing Company Limited to a trust created by her. However, the assessee had not shown the capital gains on the sale of the shares in her return of income originally filed with the Income-tax Officer. The Income-tax Officer completed the assessment on January 27, 1962, on the basis of the return filed by the assessee. Subsequently, it was noticed by the Income-tax Officer that even though the assessee had sold shares of M/s. Electrical Manufacturing Company Limited on January 13, 1959, and even though she had capital gains on the sale of these shares, she had failed to furnish the necessary particulars in her return of income originally filed by her. Thereafter, on January 20, 1968, the Income-tax Officer reopened the assessment by issuing notice under Section 148 of the 1961 Act on the assessee calling upon her to file a return of income. In response to the notice, the assessee filed her return of income on April 28, 1968, showing the income of Rs. 70,459 which was the income determined by the Income-tax Officer in the original assessment. The Income-tax Officer completed the assessment under Section 143(3) read with Section 147(a) of the 1961 Act on March 25, 1972, where he treated a sum of Rs. 4,64,000 as the capital gains made by the assessee on the sale of the 1,000 shares.
(3.)Being aggrieved by the order of the Income-tax Officer, the assessee preferred an appeal to the Appellate Assistant Commissioner and submitted that since she had furnished all the necessary facts relevant to the assessment year under reference to the Income-tax Officer at the time of the original assessment regarding the shares held by her of M/s. Electrical Manufacturing Company Limited, the Income-tax Officer was not justified in reopening the assessment under Section 148 of the 1961 Act. It was further submitted that the facts about the holding of shares of M/s. Electrical Manufacturing Company. Limited were clearly 'furnished in her wealth-tax returns for the assessment years 1958-59 to 1960-61. . If the Income-tax Officer had considered her wealth-tax return for the assessment year 1959-60 which was filed along with the original return under the Income-tax Act on June 27, 1959, as well as for the assessment year 1960-61 which was filed on August 4, 1960, the Income-tax Officer could have noticed that the assessee had sold her shares of M/s. Electrical Manufacturing Company Limited on January 3, 1959. Further, it was stated that the Income-tax Officer was aware of the assessee's acquiring shares of M/s. Electrical Manufacturing Company Limited as could be seen from the letter of the Income-tax Officer dated February 27, 1960. In this view of the matter, it was finally submitted that as the assessee had furnished all the necessary facts at the time of the original assessment, the Income-tax Officer was not justified in reopening the assessment under Section 148 of the 1961 Act. The Appellate Assistant Commissioner, in his order dated September 14, 1972, accepted the submissions of the assessee and concluded that no fresh facts had come to light which disclosed any concealed income on the part of the assessee and which would justify the action for reassessment. Accordingly, he held that the Income-tax Officer was not justified in issuing notice under Section 148 of the 1961 Act.