R.R. Misra, J. - (1.) BY means of the present writ petition, Sri Jawahar Lal Gupta, the petitioner, as an individual, has sought to challenge the notice dated January 15, 1991, issued by the Income-tax Officer, Ward-1(2), Agra, seeking to reopen the assessment proceedings under Section 147(1)(a) of the Income tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1989-90. Immediately on receipt of the said notice, the assessee had asked for a copy of the reasons recorded by the Income-tax Officer on which the assessment was sought to be reopened. Since no return was filed, the Income-tax Officer declined to do so until the return was filed. Aggrieved against the same, the petitioner had filed Writ Petition No. 353 of 1991 in this court, which was decided on April 18, 1991 (see [1992] 196 ITR 147 (All)). In the counter affidavit, the respondent had stated that he had never refused access to the reasons on which notice under Section 147(1)(a) of the Act was issued, nor had he refused a copy thereof. Rather the Income-tax Officer had, vide his letter dated July 18, 1991, informed the petitioner that he could inspect the reasons recorded for the issuance of the said notice after he had filed the return in compliance with the said notice under Section 147(1)(a) of the Act already served on him. At the time of hearing before the court, it was not in dispute that the assessee had submitted his return in pursuance of the notice under Section 147 of the Act. Accordingly, this court had directed that before the Income-tax Officer proceeds further to assess in pursuance of the said notice under Section 147 of the Act, he shall confront the assessee with the reasons recorded by him and supply him a copy thereof. It was also made clear that after the petitioner is confronted with the reasons and if he still feels aggrieved, it shall be open to the petitioner to challenge the notice under Section 147 of the Act on such grounds and before such forum which may be available to him under the law. The said writ petition was accordingly, disposed of on April 18, 1991. Thereupon, the Income-tax Officer supplied a certified copy of the reasons for the issuance of the said notice under Section 147 of the Act in the year in dispute. The said reasons are reproduced hereunder : "Shri Jawahar Lal Gupta (assessment year 1989-90) : A perusal of the records shows that the assessee filed a return of income for the assessment year 1989-90 on October 27, 1989, declaring an income of Rs. 93,310. As per the details furnished along with the return it is noticed that as per Schedule E to the balance-sheet, dated March 31, 1989, under the head 'Other liabilities' the following liabilities are shown : JUDGEMENT_726_ITR199_1993Html1.htm The assessee has not filed any evidence that these liabilities were actually paid before the filing of the return as provided in the first proviso to Section 43B and such income of Rs. 73,657 (52,939.50 + 3,654.79 + 17,059.88) has escaped assessment. Information has been received from the Assistant Commissioner of Income-tax, Circle I(1), Agra, that income of Rs. 22,000 declared by Miss. Mayura Gupta, minor daughter of Shri Jawahar Lal Gupta, for the assessment year 1989-90 is the income of Shri Jawahar Lal Gupta and is to be clubbed with his income. I, therefore, have reason to believe that income of more than Rs. 95,652 (73,662 + 22,000) chargeable to income-tax for the assessment year 1989-90 in the case of Shri Jawahar Lal Gupta has escaped assessment Issue notice under Section 147 of the Income-tax Act, 1961."
(2.) THUS, the assessment for the year in dispute is sought to be reopened on two counts as stated above. Before proceeding further, we have to take notice of the fact that for the assessment year 1989-90 (the year in dispute) three assessable entities are involved in this case. The first is Shri Jawahar Lal Gupta, the petitioner, in his capacity as an individual, second is Km. Mayura Gupta, minor daughter of Shri Jawahar Lal Gupta, in the status of an individual, and the third is Messrs. Continental Chemical Co., Rawat-pura, Agra, a registered firm. Along with the writ petition, the assessee has filed only a copy of the acknowledgment of the return (I. T. S. 2) filed by Shri Jawahar Lal Gupta, as an individual, for the assessment year 1989-90, but neither the copy of the return as filed in the original proceedings for the assessment year in dispute has been filed, nor has a copy of the return filed in response to the impugned notice under Section 147 of the Act for the assessment year 1989-90, been filed by Shri Jawahar Lal Gupta along with the writ petition. We find that the writ petition wrongly states that the copy of the return is being filed and marked as annexure I to the writ petition whereas, in fact, only a copy of the acknowledgment of the return has been filed and neither of the other aforesaid returns has been filed. Consequently, details which ought to have been submitted under the law by the assessee in regard to the income of the minor daughter have not been filed. The writ petition further states that along with the return, the petitioner has also filed (1) computation of income, (2) balance-sheet, (3) statutory audit statement and report on Form No. 3 CB, under rule 6G(1)(b) and Form No. 3 CD under rule 6G(2)(a). In paragraph 5 of the writ petition, it has further been averred that copies of the said documents are being filed as annexure 2 to the writ petition. But when we peruse annexure 2 aforesaid, we find that the said documents relate to Messrs. Continental Chemical Co., Rawatpura, Agra, i.e., a registered firm and not to the petitioner. It may be that the petitioner might have filed the said documents along with the return of the said registered firm, but no foundation has been laid in the writ petition whatsoever that the said documents have been filed by the petitioner, who is an individual, along with his return. At any rate even if the petitioner may have filed such documents, copies of none of such documents have been annexed to the writ petition. Now, turning to the first reason given by the Income-tax Officer for reopening the assessment, we find that under the head "Other liabilities" in Schedule 'E' as on March 31, 1989, the said liabilities included three amounts towards the sales tax. Section 43B of the Income-tax Act, 1961, provides that certain deductions are allowed only on actual payment. In this writ petition, we are concerned with the sum payable by the assessee by way of sales tax only. The first proviso to Section 43B states that the deduction in respect of any sum payable by way of tax shall be allowable if the amounts have been paid before the due date for the filing of the return of income under Section 139(1) and the evidence of such payment is furnished by the assessee along with that return. In the grounds taken by the Income-tax Officer for reopening the assessment, it has been mentioned as a fact that the assessee had not filed any evidence that the said liabilities of sales tax were actually paid before the filing of the return as provided in the first proviso to Section 43B of the Act. The claim of the assessee in these circumstances that the deductions made in respect of the said liabilities are allowable is incorrect and the said liabilities were not liable to be allowed to that extent and, therefore, the income to that extent has escaped assessment. Shri S. P. Gupta, learned counsel appearing for the assessee, has during the course of his submissions placed strong reliance on the statutory audit statement and report in Forms Nos. 3CB and 3CD, wherein against the column 7, "Any tax, duty or other sum not paid during the previous year" the word "Nil" has been written. He, therefore, argued by placing reliance on Circular No. 601, dated June 4, 1991 (see [1991] 190 ITR (St.) 4), issued by the Central Board of Direct Taxes that such a certificate from the accountant is complete evidence of payments made under Section 43B of the Act and that the Income-tax Officer was not right in law in not applying his mind to the said certificate. He, therefore, contended that the Income-tax Officer is incorrect in coming to his conclusion that no evidence with regard to the liabilities which were actually paid before filing of the return was furnished. In our opinion, the said contention has got no force for a number of reasons. Firstly, the certificate, as is clear from annexure 2 to the writ petition, related to Messrs. Continental Chemical Co., which was a registered partnership firm, in respect of which the assessee has himself filed copies of assessment orders for the assessment years 1982-83 to 1984-85, as annexure 3 to the writ petition. A bare perusal of the said assessment orders will show that Messrs. Continental Chemical Co., Rawatpura, Agra, was assessed as a registered firm for the years in dispute. It had two partners, one was Sri Jawahar Lal Gupta and the other was Smt. Ratan Devi. The shares of the said two partners have also been determined at the end of the assessment orders passed in the said cases as provided under the law. Page 66 of the writ petition also is a copy of the notice of demand under Section 156 of the Act relating to Messrs. Continental Chemical Co., Rawatpura, Agra, for the assessment year 1983-84 in the status of "registered firm". It may be kept in mind that as far as the assessments of this registered firm for the assessment years 198586 to 1989-90 (the years in dispute) are concerned, copies of the same have not been filed. However, proceeding further we find that the submission made by Sri S. P. Gupta is that if the directions contained in the aforesaid circular dated June 4, 1991 (see [1991] 190 ITR (St.) 4), are taken into account, the said certificate of the auditor/accountant is sufficient evidence of the payments in regard to the said liabilities. We, however, do not agree with the said submission. From a perusal of paragraphs 5 and 6 of the aforesaid circular, it is clear that as far as the evidence of payment of tax is concerned, a certified copy of the accountant might be sufficient for the purpose of making prima facie adjustment in regard to the assessments made under Section 143(1)(a) of the Act. The circular further states as follows (see [1991] 190 ITR (St.) 4, 5) : " . . . . However, in cases selected for scrutiny and assessment under Section 143(8), further evidence can be called for, if necessary." Thus, it is only for the purposes of summary assessment that such certificate could be taken into account and not for regular assessments or reassessments under Section 147 of the Act. Further, in the present case, from the averments made in the writ petition, it is not clear that the said certificate was available even in the case of the assessee, Sri Jawahar Lal Gupta, individual. Thus, our conclusion, on the facts of this case, is that the petitioner cannot take any assistance either from the said certificate of the auditor, which shows "Nil" against column No. 7 or from the said circular. In fact, what is required under the law is that the accountant should have positively verified that the payment of tax, claimed as deduction, had been made by the due date for the filing of the return. The same has not been made obvious in the present case. Since, as is made clear, the assessee has failed to show that he had filed any evidence regarding actual payment of the said liabilities before the filing of the return, in our opinion, the Income tax Officer was justified in law in forming the belief as stated above for reopening the said assessment.
(3.) COMING now to the second reason for reopening the assessment aforesaid, the position is as follows : Kumari Mayura Gupta is admittedly the minor daughter of the petitioner. The petitioner has filed a copy of the return in respect of Kumari Mayura Gupta for the assessment year 1989-90 as annexure 11 to the writ petition. Towards the end of the assessment order of Kumari Mayura Gupta for the assessment year 1989-90, we find that after discussion of the relevant evidence the Assessing Officer has concluded as follows : " Looking into the totality of facts and circumstances of the case, these receipts are not gifts but in the nature of casual and nonrecurring receipts, and hence liable to be charged to tax as income of the recipient. All these receipts have been used for business purposes, hence it cannot be affirmed nor has the assessee been able to prove that they were made involuntarily and without consideration. The income accruing from it is to be clubbed in the hands of the guardian as prima facie it appears to be indirect transfer of money for the benefit of the minor, since the paying capacity of the donors has not been established." Thus, the Income-tax Officer had assessed Km. Mayura Gupta for the said year in regard to the said income by way of a protective measure.;