COMMISSIONER OF INCOME-TAX VS RAJENDRA KUMAR KARANWAL, 1992 PTD-ALLAHABAD-HIGH-COURT-INDIA 844 (1990)

Income-tax---

----Reference---Reassessment---Failure to disclose material facts necessary for assessment---No obligation to disclose gift by third party to minor sons of assessee---Tribunal justified in holding that reassessment proceedings were not validly initiated---No question of law arose:

Held, dismissing the application for reference, that the assessee was under no obligation to disclose the factum of gifts to his minor sons by third parties in his returns. The Tribunal was justified in holding that reassessment proceedings under section 147(a) of the Indian Income Tax Act, 1961, were not validly initiated. No question of law arose from its order.

JUDGMENT

B.P. JEEVAN REDDY, CJ. ---By this application under section 256(2) of the Income Tax Act, 1961, the applicant is asking this Court to refer the following two questions:

"(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that the initiation of proceedings under section 147(a) was invalid?

(2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in quashing the assessment framed by the Income-tax Officer in this case by initiation of proceedings under section 147(a)?"

The main question is whether the initiation of proceedings under section 147(a) was valid. It was held by the Tribunal that the initiation of proceedings was invalid, inasmuch as the assessee was not under an obligation to disclose the factum of gifts to his minor sons by a third party in the return filed by him. Since the gifts were made by a third party to the minor sons, we agree with the Tribunal that there was no obligation on the part of the assessee to disclose this fact in his return. Therefore, the case does not fall within the ambit of section 147(a). It was never the case of the Department that there was any information on the basis of which it has been reopened. At this stage, it will not be proper, on the facts and circumstances of this case, to justify the notice under section, 147(1)(a).

The application is, accordingly, dismissed.

M.BA./1549/TApplication dismissed.