Deb, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, we are concerned with the following question of law : " Whether, on the facts and in the circumstances of the case and on a proper construction of sections 147 and 148 of the Income-tax Act, 1961, the Income-tax Officer was entitled to recompute the business income of the assessee, the reassessment proceedings having been validly initiated to include property income that had escaped assessment ? "
(2.) The statement of the case relates to the assessment years 1959-60 and 1960-61. The assessees' income from house property was determined at Rs. 1,243 and Rs. 1,159, respectively, in these two assessment years by the previous tax officer and with regard to the assessees' income from business, in view of the profit-sharing agreement between the assessees and their employees, it was determined at Rs. 8,139 for the assessment year 1959-60 and out of Rs. 25,045 it was determined at Rs. 12,522 for the assessment year 1960-61.
(3.) Subsequently, and before the expiry of 4 years, another tax officer came to know that the assessees had a house at Ghandernagore and its income had escaped assessment. Accordingly, he started the reassessment proceedings for these two years under Section 147(b) of the Act after serving the statutory notice on the assessees. There is no dispute that the income from this property has escaped assessment in the original assessments and the reassessment proceedings are validly initiated.;