ASSAM FOREST PRODUCTS P LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following two questions of law have been referred to the High Court under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), by the Income-tax Appellate Tribunal, Gauhati Bench (hereinafter referred to as " the Tribunal ") :

(2.) FROM the statement of the case the following facts appear : The relevant assessment year is 1964-65. The assessee, M/s. Assam Forest Products (P.) Ltd., is a limited company. The original assessment for the assessment year 1964-65 was completed on May 26, 1965, under Section 143(3)/147 of the Act and the total income was assessed at Rs. 1,77,460. The assessee introduced in its business a sum of Rs. 60,000 purporting to be a loan from M/s. Surekha Jute Company. The Income-tax Officer has pointed out that enquiries were made subsequent to the completion of the original assessment proceedings and it was found that there was no such company as Surekha Jute Company. On further enquiries it was found that there was a jute concern styled, Surekha Jute Company, owned by Bidyananda Surekha. The Income-tax Officer also found on enquiries that the said credit in the books of the assessee was not genuine but the amount represented concealed income of the assessee. The Income-tax Officer held that the assessee did not disclose the real nature of the source of the said amount and thus by omission and failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment its income to the extent of Rs. 60,000 escaped assessment: The Income-tax Officer, therefore, initiated proceedings under Section 147 of the Act and issued notice under Section 148 of the Act.

(3.) THE assessee then preferred an appeal from the order of the Appellate Assistant Commissioner before the Tribunal. THE appeal was numbered as I.T.A. No. 162 (Gau) of 1972-73. Before the Tribunal also the assessee submitted that all the material facts were disclosed by the assessee fully and truly at the time of original assessment and that in the balance-sheet there was a printing mistake but the Income-tax Officer was never misled in the original assessment proceeding and the Income-tax Officer made a note in the balance-sheet relating to its credit, vide examination note, and the detailed account of examination notes prepared in the course of the original assessment proceeding clearly showed that the assessee had disclosed the material facts. THE assessee also submitted before the Tribunal that the Income-tax Officer and the Appellate Assistant Commissioner never disclosed any statement of confession made by Bidyananda Surekha concerning the transaction with the assessee and so the inference drawn on the undisclosed material could not be rebutted by the assessee and, therefore, the provisions of Section 142(3) were not complied with. It was further submitted that the onus was on the department to prove that the loan was not a genuine loan and the reassessment order was liable to be cancelled and the amount of Rs. 60,000 was liable to be deleted.