Andhra Pradesh H.C : Whether, on the facts and in the circumstances of the case, the reassessment proceedings initiated by the ITO under s. 147(a) of the IT Act for the asst. yr. 1969-70 are valid ?

High Court Of Andhra Pradesh

A. China Subbarayudu vs. CIT

Section 147(a)

Asst. Year 1969-70

B.P. Jeevan Reddy & Upendra Lal Waghray, JJ.

R.C. No. 261 of 1982

11th November, 1987 

Counsel Appeared

Y. Ratnakar, for the Assessee : M. Suryanarayana Murthy, for the Revenue

B.P. JEEVAN REDDY, J.:

Two questions are referred under s. 256(1) of the IT Act, 1961, at the instance of the assessee. They are:

” 1. Whether, on the facts and in the circumstances of the case, the reassessment proceedings initiated by the ITO under s. 147(a) of the IT Act for the asst. yr. 1969-70 are valid ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal’s finding that the transport charges claimed by the assessee were bogus based on the enquiry report of the Central Bureau of Investigation is correct ? “

For the asst. yr. 1969-70, the assessment relating to the assessee was completed on March 28, 1970, on an income of Rs. 24,640. While making the assessment, several (items of) transport charges said to have been paid by the assessee, in respect of which he produced vouchers of payment, were accepted. Subsequently, on the basis of a report of the Central Bureau of Investigation, it came to light that the vouchers produced by the assessee were fabricated and false. The assessee was also being prosecuted by the Central Bureau of Investigation before the Special Judge in that behalf. Indeed, the report was that the fertilizers, which were allotted to the assessee were not at all transported to the destination points as per the allotment orders, but disposed of at or near about the port and that the assessee created bogus evidence supporting the plea of transport. On the basis of the said information, the assessment was reopened and the said vouchers were rejected. It was held by the ITO that the vouchers produced were not genuine and that they were fabricated. The appeals preferred by the assessee to the AAC and the Tribunal failed, whereupon the present reference is obtained.

The contention of the assessee before the Tribunal was that the reopening of the assessment under s. 147(a) was bad. His case was that inasmuch as he has placed all the basic facts before the ITO, he had discharged his duty under the Act and that he was not obliged to tell the ITO that the vouchers produced by him are not true. This argument which we find, to put it mildly, quite startling was rejected by the Tribunal holding that the assessee having failed to furnish the particulars of his income and expenditure truly and fully, the reopening of the assessment was proper. Sec. 139 of the Act requires every person, whose total income exceeds the maximum amount which is not chargeable to income-tax, to furnish a return of his income in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. Sec. 140 prescribes by whom the return of income is to be signed. The IT Rules prescribe the form in which the return has to be filed. Each such return contains a declaration and verification to be signed by the person filing the return that the particulars stated therein are correct and complete to the best of his knowledge and belief and that the information given in the return and the annexures and statements accompanying it is also correct, complete and true. It means, that if a person gives any false, untrue or incorrect particulars, he is guilty of violating the said declaration and the verification and cannot claim any immunity. If it is found that any particular statement or information furnished or facts stated in the declaration are false, untrue or incorrect, the assessment is liable to be reopened and it is no answer to say that the assessee has stated basic and primary facts. Not only is an assessee under an obligation to state all information and particulars but he is also under an obligation to state them truly and correctly to the best of his knowledge and belief. Inasmuch as in this case it has been found as a fact that the vouchers produced by the assessee are false and fabricated, the reopening of the assessment was perfectly in order. Accordingly, question No. 1 is answered in the affirmative, that is, in favour of the Revenue and against the assessee.

So far as question No. 2 is concerned, we must say that no material was brought before the ITO or the appellate authorities to contradict or rebut the contents of the (report of the) Central Bureau of Investigation that the vouchers produced by the assessee were forged or fabricated. In the circumstances, the finding arrived at by the ITO and confirmed by the appellate authorities that the said vouchers were bogus is perfectly in order and cannot be interfered with. Accordingly, question No. 2 is also answered in the affirmative, that is, in favour of the Revenue and against the assessee. The assessee shall pay the costs to the Revenue in this reference.

[Citation : 172 ITR 278]

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