M.M. Kumar, J. - (1.) THE following substantive question of law for the opinion of this Court has been referred: Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was right in law in annulling the order of the Income Tax Officer Under Section 143(3) read with Section 147(a) of the Income Tax Act, 1961 ?
(2.) THE facts may briefly be noticed. The assessee is a registered firm. It carries on the business of sale, purchase and repair of radios. On September 21, 1970, original assessment was made at Rs. 8,010 by the Income Tax Officer under Section 143(1) of the Income Tax Act, 1961 (for brevity "the Act") on the basis of the return of income filed by the assessee on August 23, 1969, declaring its income to be Rs. 7,959. The Assessing Officer completed the assessment by issuing notice under Section 148 of the Act to the assessee on June 2, 1973. The reasons recorded before issue of notice under Section 148 of the Act were: Issue notice under Section 148 of the Act for the assessment year 1969 -70 as I have reasons to believe that the income has been under assessed for this year. (Sd.).... Income -tax Officer
(3.) THE assessee replied to the notice by sticking to the income declared in the return filed by him at Rs. 7,959. The Assessing Officer vide order dated July 31, 1976, reassessed the income of the assessee at Rs. 73,530. The basis for reopening the assessment appears to be that some complaints about tax evasion were filed against the assessee. However, notice under Section 148 of the Act forming the belief by the Assessing Officer, was issued without verification of the allegations levelled in the complaint. In fact on receipt of the complaint a survey under Section 133A of the Act was made by the Inspector of Income Tax on June 2, 1973, when the books of account of the assessee for the year 1973 -74 were impounded. The books of account pertaining to the assessment year were not available at the shop of the assessee during the course of survey. However, he produced the account books pertaining to earlier years on June 4, 1973, including the books for the financial year 1969 -70 under appeal before the Assessing Officer. The books were impounded and examined and thereafter reassessment order was passed on June 31, 1976, by computing the income at Rs. 73,530.;