http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 11  

PETITIONER: SRI KRISHNA PVT. LTD. ETC

       Vs.

RESPONDENT: I.T.O. CALCUTTA & ORS.

DATE OF JUDGMENT:       16/07/1996

BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN REDDY, B.P. (J) MAJMUDAR S.B. (J)

CITATION:  JT 1996 (6)   440        1996 SCALE  (5)353

ACT:

HEADNOTE:

JUDGMENT:                  THE 16TH DAY OF JULY, 1996 Present:           Hon’ble Mr.Justice B.P.Jeevan Reddy           Hon’ble Mr.Justice S.B.Majmudar Jaideep Gupta, Adv. for M/s. Khaitan & Co, Advs. for the apellants. B.B.Ahuja, Sr.Adv. B.S.Ahuja and S.N.Terdol, Advs. with him for the Respondents.                       J U D G M E N T The following Judgment of the Court was delivered: SRIKRISHNA PRIVATE LIMITED ETC. V. I.T.O. CALCUTTA & ORS.                       J U D G M E N T B.P.JEEVAN REDDY,J.      CIVIL APPEAL NO. 1562 OF 1977.      This is an appeal preferred by the assesee against  the judgment and  order of a Division Bench of the Calcutta High Court allowing  the writ  appeal preferred  by  the  Revenue [Income Tax  Officer, Central  Circle-VI and Others] against the judgment  of learned  Single Judge.  The learned  Single Judge had  allowed the  writ petition  filed by the assessee questioning the  validity of  a notice  issued under Section 148 read with Section of the Income Tax Act.      In the  return filed  for the  Assessment Year 1959-60, the  assessee   had  shown  certain  hundi  loans  totalling Rs.8,53,298/- said  to have  been taken  from  a  number  of persons. The  Income Tax  Officer accepted  the averment and made the  assessment. During  assessment proceedings for the succeeding year,  1960-61, the  assessee again  showed hundi loans in sum of more than Rupees seventeen lakhs. The Income Tax Officer  enquired into  the truth  of the  averment  and found that  many of them were bogus claims while some of the alleged lenders were found to be near relations of directors or principal  shareholders of  the assessee.  The Income Tax Officer held that our of the hundi loans of more than Rupees

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 11  

seventeen lakhs claimed by the assessee, loans totalling Rs. 11,15,275/- were  not established  to be  genuine loans  and accordingly added  that amount  as income  from  undisclosed sources. Having  regard to  the similarity of the claims and the persons who are said to have advanced hundi loans during the accounting year relevant to the Assessment Year 1959-60, the Income  Tax Officer  issued a  notice under  Section 148 calling upon  the assessee  to file a revised return for the Assessment Year  1959-60. Immediately,  upon  receiving  the said notice, the assessee approached the Calcutta High Court by way  of a  writ petition  questioning the validity of the notice on  the grounds  that the  Income Tax  Officer had no reasonable ground  to believe  that income chargeable to tax has escaped  assessment for  the said year on account of any omission or  failure on  his part  to make  a full  and true disclosure of  all material  facts. The  writ  petition  was allowed by  a learned  Single Judge,  as stated above, whose decision has  been reversed in appeal by the Division Bench. This Court  entertained the  Special Leave Petition filed by the assessee  and granted leave on July 26, 1977. This Court however, did  not  stay  the  proceedings  pursuant  to  the impugned notice. It directed that the Income Tax Officer may proceed to  complete the assessment proceedings but will not issue  a   demand  notice.   The  Income   Tax  Officer  has accordingly completed the re-assessment.      Section 147, 148 and 151, as they stood at the relevant time, read as follows:      " 147.  Income escaping assessment.      -- If  (a) the  Income-tax  Officer      has  reason  to  believe  that,  by      reason of  the omission  or failure      on the  part of an assessee to make      a return  under Section 139 for any      or to  disclose fully and truly all      material facts  necessary  for  his      assessment for  that  year,  income      chargeable  to   tax  has   escaped      assessment for that year, or      (b) notwithstanding  that there has      been  no  omission  or  failure  as      mentioned in clause (a) on the part      of  the  assessee,  the  Income-Tax      Officer  has   in  consequence   of      information   in   his   possession      reason  to   believe  that   income      chargeable  to   tax  has   escaped      assessment for any assessment year,      he may,  subject to  the provisions      of sections  148 to  153, assess or      re-assess such  income or recompute      the  loss   or   the   depreciation      allowance, as  the case may be, for      the   assessment   year   concerned      (hereinafter in sections 148 to 153      referred   to    as   the   relvant      assessment year).      Explanation-1.-- For  the  purposes      of  this   section,  the  following      shall also  be deemed  to be  cases      where income  chargeable to tax has      escaped assessment, namely:-      (a) where  income chargeable to tax      has been under assessed; or      (b)  where  such  income  has  been      assessed at too low a rate; or

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 11  

    (c) where such income has been made      the  subject  of  excessive  relief      under this Act or under the Indian-      tax Act, 1922 (11 of 1922); or      (d)   where   excessive   loss   or      depreciation  allowance   has  been      computed.      Explanation-2.-- Production  before      the Income  Tax Officer  of account      books or  other evidence from which      material evidence  could  with  due      diligence have  been discovered  by      the  Income-tax  Officer  will  not      necessarily  amount  to  disclosure      within the meaning of this section.      148. Issue  of notice  where income      has escaped assessment--      (1) Before  making the  assessment,      re-assessment   or    recomputation      under section  147, the  Income-tax      Officer shall serve on the assessee      a notice  containing all or any  or      the  requirements   which  may   be      included in  a  notice  under  sub-      section (2) or Act shall, so far as      may be, apply accordingly as if the      notice were  a notice  issued under      that sub-section.      (2) The  Income-tax Officer  shall,      before  issuing  any  notice  under      this Section,  record  his  reasons      for doing so.      151. Section for issue of notice.--      - (1)  No notice  shall  be  issued      under section  148 after the expiry      of eight  years from the end of the      relvant assessment year, unless the      Commissioner is  satisfied  on  the      reasons recorded  by the Income-tax      Officer that  it is  a fit case for      the issue of such notice."      Section 139  places an  obligation upon every person to furnish voluntarily  a return  of his  total income  if such income during  the previous year exceeded the maximum amount which is  not chargeable  to income  tax. The  obligation so placed involves  the  further  obligation  to  disclose  all material facts  necessary for  his assessment  for that year fully and  truly. If  at any subsequent point of time, it is found that  either on  account of  an omission of failure of the assessee  to fail  the  return  or  on  account  of  his omission or failure to disclose fully and truly all material facts necessary  for his  assessment for  that year,  income chargeable to  tax has  escaped assessment for that year the Income Tax  Officer is entitled to re-open the assessment in accordance with  the procedure  prescribed by the Act. To be more precise,  he can  issue the  notice under  Section  148 proposing to re-open the assessment only where he has reason to believe that on account of either the omission or failure on the part of the assessee to file the return or on account of the  omission or  failure on  the part of the assessee to file the  return or on account of the omission of failure on the part  of the  assessee to  disclose fully  and truly all material facts  necessary for  his assessment for that year, income  has   escaped  assessment.   The  existence  of  the reason(s) to  believe is supposed to be check, a limitation,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 11  

upon his  power to  re-open the assessment. [See the leading decision on  this subject in Barium Chemicals v. Company Law Board (1966  Suppl. S.C.R.311 at 361 = A.I.R.1967 S.C.295 at 324)] Section  148(2) imposes  a further check upon the said power, viz., the requirement of recording of reason for such re-opening by  the Income  Tax Officer.  Section 151 imposes yet  another   check  upon   the  said   power,  viz.,   the Commissioner or  the Board,  as the  case may  be, has to be satisfied, on  the basis  of the  reasons  recorded  by  the Income Tax  Officer, that  it is  a fit case for issuance of such  notice.  The  power  conferred  upon  the  Income  Tax Officer,   by Sections  147 and 148 is thus not an unbridled one. It  is hedged  in with  several safeguards conceived in the interest  of eliminating room for abuse of this power by the assessing  officers. The  idea was to save the assessees from  harassment  resulting  from  mechnical  re-opening  of assessment but  this protection  avails only those assessees who disclose all material facts truly and fully.      Coming to  the facts of this case, the reasons recorded by the  Income-Tax Officer for re-opening the assessment for the year 1959-60 are to the following effect:      "In the  course of  the  assessment      proceeding for  the assessment year      1960-61  investigation   were  made      into the  unsecured  loans  of  Rs.      17,32,298/- which  was the position      of the  last day  of the accounting      year  relevant  to  the  assessment      year 1960-61.  These investigations      disclosed that  a large  number  of      them  were  Bogus  Hundi  Loans  or      Loans from  near relations  or  the      Directors       or        principal      shareholders.  Hence,  the  amounts      credited to  some of these accounts      have been  assessed as  income from      undisclosed sources  to the  extent      of Rs.11,51,275.00.      Similar loans  are noticed  for the      assessment year  1959-60  and  they      stand  at   Rs.853,298/-   as   per      Balance Sheet  as  on  16th  April,      1959.      I  have,   therefore   reasons   to      believe that  by reason of omission      or  failure  on  the  part  of  the      assessee company  to disclose fully      and  truly   all   material   facts      necessary  for  its  assessment  of      1959-60   in    regard   to   these      accounts, income  chargeable to tax      has escaped assessment.      I, therefore , propose action under      Section 147(a) of I.T. Act, 1961."      We may also mention that after hearing this  appeal for some time, we found it appropriate to look into the relevant record and  accordingly made  the following order on October 10, 1995:      "After hearing the appeals for some      time, we  find it necessary to look      into   the    record   to   satisfy      ourselves  with   respect  to   the      following fact:           Whether,  at   the   time   of           issuing   of    notice   under

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 11  

         section 148,  the  I.T.O.  had           meterial  before  him  showing           the persons  who have lent the           sum of  Rs.8,53,298 during the           accounting  year  relevant  to           accounting  year  relevant  to           assessment year  1959-60, were           the very  same person  who are           said to have lent Rs.11,51,275           (bogus   loans)   during   the           accounting  year  relevant  to           assessment year  1960-61,  and           disallowed by  the  I.T.O.  in           that assessment year?      Adjourned for eight weeks."      Accordingly, the  Income Tax  Officer has  submitted  a chart showing  that out  of the  unsecured  hundi  loans  of Rs.8,53,298/- claimed  by the  assessee, ten persons who are said to  have lent  a total  amount  of  Rs.3,80,000/-  were common to both the the Assessment Years 1959-60 and 1960-61. In other  words, these  very ten  persons are  said to  have advanced loans  again during  the next  year and all the ten were  found   to  be   bogus  lenders  as  recorded  in  the asssessment proceeding  relating to Assessment Year 1960-61. Now, the  question is can it be said in the above facts that the issuance  of  the  notice  under  Section  148  was  not warranted? Can  it be  said in  the face  of the above facts that the Income Tax Officer had no reaosn to believe that on account of the assessee’s omission/failure to disclose fully and truly  all material  facts necessary  for his assessment for  that   year,  income  chargeable  to  tax  has  escaped assessment fot  that year.  In the  reasons recorded  by the Income Tax  Officer [as  required by Section 148(2)], he had stated clearly  that in the course of assessment proceedings for the succeeding assessment year, it was found that out of the unsecured  hundi loans  pur forward  by the  assessee, a large number were found to be bogus and that many of the so- called lenders  were found  to  be  near  relations  of  the Directors or  the principal  shareholders.  He  stated  that similar loans are also noticed for the Assessment Year 1959- 60 leading to escapement of income. It is not alleged by the assessee that  the Income  Tax Officer had not checked up or tallied the  names of  the  alleged  lenders  for  both  the assessment years.  In the  absence of  any such allegation - which  allegation,   if  made,   could  have   afforded   an opportunity to  the Income Tax Officer did find that a large number of  alleged lenders who were found to be bogus during the  Assessment  Year  1960-61  were  also  put  forward  as leanders  during   the  Assessment  Year  1959-60  as  well. Evidently, this  is what  he mean  in the  context, when  he spoke of  "similar loans"  being noticed  for  the  year  in question as  well. In  such a  situation it is impossible to say that the Income Tax Officer had no reasonable  ground to believe that  there has  been no full and true disclosure of all material  facts  by  the  assessee  during  the  relvant assessment year  and that on that account, income chargeable to  tax  had  escaped  assessment.  As  we  shall  emphasise hereinafter, every  disclosure is  not and cannot be treated to be  true and full disclosure. A disclosure may be a false one or true one. It may be full disclosure or it may not be. A partial  disclosure may very often be misleading one. What is required  is a  full and  true disclosure of all material facts necessary  for making  assessment for  that year. This calls for  an examination  of the  decisions of  this  Court analysing and elucidating Sections 147 and 148 of the act.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 11  

    The  first   and  foremost   is  the  decision  of  the Constitution Bench  Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies  District-I, Calcutta  & Anr.  [(1961) 41 I.T.R. 191.  The case  arose under  Section 34 of the Income Tax Act  [as amended  in 1951]. In material particulars, the provisions in  Section 34  were similar  to those in Section 147.  Having  regard  to  the  fact  that  it  is  the  only Constitution Bench decision on the point, it is necessary to examine it  in some detail. The Constitution Bench explained the purport of Section 34 in the following words:      "To confer  jurisdiction under this      section to  issue notice in respect      of assessments beyond the period of      four years,  but within a period of      eight years,  from the  end of  the      relevant year  two  condition  have      therefore  to   be  satisfied.  The      first  is   that   the   Income-tax      Officer must have reason to believe      that  income,   profits  or   gains      chargeable to  income-tax have been      under-assessed. The  second is that      he must have also reason to believe      that  such  ’under-assessment’  has      occurred by  reason of  either  (i)      omission or  failure on the part of      an assessee to make a return of his      income under  section 22,  or  (ii)      omission or  failure on the part of      an assessee  to disclose  fully and      truly all  material facts necessary      for his  assessment for  that year.      Both    these     conditions    are      conditions    precedent    to    be      satisfied  before   the  Income-tax      Officer could  have jurisdiction to      issue a  notice for  the assessment      or reassessment  beyond the  period      of  four   years,  but  within  the      period eight  year, from the end of      the year in question..... The words      used are  ’omission or  failure  to      disclose  fully   and   truly   all      material facts  necessary  for  his      assessment  for   that   year.   It      postulates a duty on every assessee      to disclose  fully  and  truly  all      material facts  necessary  for  his      assessment. what facts are material      and necessary  for assessment  will      differ from  case to case. In every      assessment     proceeding,      the      assessing authority  will, for  the      purpose   of    computing   or   or      determining the proper tax due from      an assessee,  require to  know  all      the facts  which help him in coming      to the correct conclusion. From the      primary facts  in  his  possession,      whether  on   disclosure   by   the      assessee, or  discovered by  him on      the basis  of the  facts disclosed,      or   otherwise,    the    assessing      authority has to draw inferences as      regards certain  other  facts;  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 11  

    ultimately, from  the primary facts      and the further facts inferred from      them, the authority has to draw the      proper   leagal   inferences,   and      ascertain     on      a     correct      interpretation   of    the   texing      enactment, the proper tax leviable.      Thus,  when   a   question   arises      whether certain  income received by      an assessee  is capital receipt, of      revenue  receipt,   the   assessing      authority  has  to  find  our  what      primary facts  have been proved, to      decide  what  the  legal  inference      whould be...... We have, therefore,      come to  the conclusion  that while      the duty  of  the  assessee  is  to      disclose  fully   and   truly   all      primary relevant facts, it does not      extand beyond this."                         (Emphasis added)      In that  case, the  alleged not-disclosure  of material facts fully and truly- to put it in the words of the court - was the  failure of  the  assessee  to  disclose  "the  true intention behind  the sale  of the shares". The assessee had stated during  the assessment  proceedings that  the sale of shares  during   relevant  assessment  years  was  a  casual transaction in  the nature of mere change of investment. The Income Tax  Officer found  later that those sale were really in the  nature of  trading transactions.  The  case  of  the Revenue was that the assessee ought to have stated that they were material,  on the  basis of  which, he  has reasons  to believe that  the assessee had put forward certain bogus and false unsecured  hundi loans  said to have been taken by him from non-existent  persons of  his dummies,  as the case may be, and  that on  that account  income chargeable to tax has escaped  assessment.   According  to  him,  this  was  false assertion to  the knowledge  of the assessee. The Income Tax Officer  says   that  during   the  assessment  relating  to subsequent assessment  year, similar  loans  [from  some  of these very  persons] were  found to be bogus. On that basis, he seeks  to re-open  the assessment.  It  is  necessary  to remember that  we are  at the  state of re-opening only. The question  is   whether,  in  the  above  circumstances,  the assessee can  say, with any justification, that he had fully and truly  disclosed the  material facts  necessary for  his assessment for that  year. Having created and recorded bogus entires or loans with what face can the assessee say that he had truly  and fully  disclosed all material facts necessary for his assessment for that year. True it is that Income Tax Officer could  have  investigated  the  truth  of  the  said assertion which he actually did in the subsequent assessment year -  but that  does  not  relieve  the  assessee  of  his obligation, placed  upon him  by the  statute,  to  disclose fully and  truly all  material facts  Indubitably, whether a loan alleged  to have been taken by the assessee, is true or false, is  a meterial facts and not an inference, factual or leagal, to  be drawn  from given  facts. In this case, it is shown to  use that  ten persons  [who are  alleged  to  have advanced  loans   to  the   assessee  in   a  total  sum  of Rs.3,80,000/- out of the total hundi loans of Rs.8,53,298/-] were established to be bogus persons or mere name lenders in the assessment  proceedings relating to the subsequent year. Does it  not furnish  a reasonable ground for the Income Tax Officer to  believe that  on account  of the failure- indeed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 11  

not a  mere   failure but  a positive design to mislead - of the assessee  to disclose  all  material  facts,  fully  and truly, necessary  for his  assessment for  that year, income has escaped  assessment? We  are of the firm opinion that it does. It  is necessary  to reiterate  that we are now at the stage of  the validity  of the notice under Section 148/147. The enquiry  at this  stage is only to see whether there are reasonable grounds for the Income Tax Officer to believe and not whether  the  omission/failure  and  the  escapement  of income  is   established.  It  is  necessary  to  keep  this distinction in mind.      A  recent   decision  of  this  Court  in  Phool  chand Bajranglal v.  Income Tax officer [(1993) 203 I.T.R.456], we are gratified  to note,  adopts an identical view of law and we are in respectful agreement with it. The decision rightly emphasises the  obligation of  the assessee  to disclose all material facts necessary for making his assessment fully and truly. A  false disclosure, it is held, dose not satisfy the said   requirement. We are also in respectful agreement with the following holding in the said decision:      "Since the  belief is  that of  the      Income tax Officer, the Sufficiency      of reasons  for forming  the belief      is not  for the  court of judge but      it is  not for  the court  of judge      but it  is open  to an  assessee to      establish that there in fact not at      all a bona fide one or was based on      vague, irrelevant  and non-specific      information.   To    that   limited      extent, the court may look into the      conclusion  arrived   at   by   the      Income-tax  Officer   and   examine      whether  there   was  any  meterial      available on  the record from which      the  requisite   belief  could   be      formed by  the  Income-tax  Officer      and further  whether that  material      had any  rational connection  or  a      live link  for the formation of the      requisite belief."      Learned counsel  for the  assessee,  Sri  Gupta  placed strong  reliance   upon  the  decisions  of  this  Court  in Chhugamal  Rajpal   v.  S.P.   Chaliha  &   Ors  [(1971)  79 I.T.R.603], Income  Tax Officer,  I Word, Dist. VI, Calcutta v.  Lakhmani   Mewal  Das   [(1976)   103   I.T.R.437]   and Commissioner of  Income  Tax,  Calcutta  v.  Burlop  Dealers Limited [(1971)  79 I.T.R.609]  as laying  down propositions contrary to  those laid  down in  Phool Chand Bajranglal. We cannot agree.  The principle  is  well-settled  by  Calcutta Discount and  it is  not  reasonable  to  suggest  that  any different proposition   was  sought to  be enunciated in the said decisions.  Calcutta Discount emphasises repeatedly the assessee’s  obligation   to  disclose   all  material  facts necessary for  his assessment fully and truly in the context of the  two requirements - called conditions precedent which must be  satisfied before  the Income  Tax Officer  gets the jurisdiction    to  re-open  the  assessment  under  Section 147/148. This  obligation can neither be ignored nor watered down.  Nor  can  anyone  suggest  that  a  false  disclosure satisfies the  requirement of  full and true disclosure. All the requirement  stipulated by Section 147 must be given due and equal  weight. Finality  of proceedings  is certainly  a consideration but  that avails  one who  has fully and truly disclosed all  material facts  necessary for  his assessment

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 11  

for that  year - and not to others. All the decisions relied upon by  Sri  Gupta  have  been  elaborately  discussed  and distinguished in  Phool Chand  Bajranglal and we fully agree with the  same. We  think it  unnecessary  to  repeat  those reasons. In  particular, we  agree with the reasons given in Phool Chand Bajranglal for holding that the decision of this Court in  Burlop delears  must be confined to the particular fact-situation of  that case and that it cannot be construed to be of universal application irrespective of the facts and circumstances of the case before the Court.      It  is   brought  to  our  notice  that  certain  other decisions  of   this  Court   have  rightly  emphasised  the requirement of  full and  true disclosure and have held that failure or  omission to  do so,  legitimately  attracts  the power   under   Section   147.   In   Inspecting   Assistant Commissioner of  Income  Tax  v.  V.I.P.  Industies  Limited [(1991) 191 I.R.R.661], a three-Judge Bench had this to say:      "After hearing  learned cousel  for      both the  parties, we are unable to      uphold the order of the High Court.      It  appears   the  notice   of  the      Income-tax  Department   that   the      facts disclosed  in the  return are      not a  true and correct declaration      of  facts.  In  that  view  of  the      matter, we  set aside  the order of      the matter,  we set aside the order      of the  High Court  passed in  Writ      Petition No.1634  of  1988  (V.I.P.      Industries v.  Inspecting Assistant      Commissioner  [1991]  187  ITR  639      (Bomb.)), and send the case back on      remand to  the  Income-tax  Officer      for a  decision in  accordance with      law after  giving an opportunity of      hearing to the parties concerned.      The  special  leave  petitions  are      disposed or."      In Central  provinces Manganese  Ore Co  Ltd. v. Income Tax Officer, Nagpur [(1991) 191 I.T.R.662] again, this court observed:      "The only question which arises for      out consideration  is as to whether      the  two   conditions  required  to      confer jurisdiction  on the Income-      tax Officer  under section  147 (a)      of the  Act have  been satisfied in      this case.  The first  is that  the      Income-tax Officer must have reason      to   believe    that   the   income      chargeable to  income-tax had  been      under assessed  and the second that      such under  assessment has occurred      by reason of omission or failure on      the  part   of  the   assessee   to      disclose  fully   and   truly   all      material facts  necessary  for  its      assessment for the year 1953-54.           So far  as the first condition      is   concerned,    the   Income-tax      officer, In  his recorded  reasons,      has relied  upon the  fact as found      by the Customs Authorities that the      appellant  had  under-invoiced  the      goods it  exported. It is no dought

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 11  

    correct that  the said  finding may      not be  binding upon the income-tax      authorities but  it  can  be  valid      reason   to   beliveve   that   the      chargeable income  has been  under-      assessed. The  final outcome of the      proceedings is  not relevant.  What      is relevant  is  the  existence  of      reasons  to   make  the  Income-tax      Officer believe that there has been      under-assessment of  the assessee’s      income for  particular year. We are      satisfied that  the first condition      to invoke  the jurisdiction  of the      Income tax  Officer  under  Section      147 (a) of the Act was satisfied.           As    regards    the    second      condition, the  appellant  did  not      produce the  books of  account kept      by them  at their  head  office  in      London nor  the original  contracts      of sale  which were entered into at      London   with   the   buyers.   The      appellant did  not  produce  before      the Income-tax  Officer any  of the      accounts  with   related   to   the      foreign  buyers.  No  reasons  were      given for  the supply  of manganese      ore at a rate lower than the market      rate. It  is for  the  assessee  to      disclose  all   the  primary  facts      before the  Income-tax  Officer  to      enable him  to account for the true      income of  the assessee. The proven      charge of  under-invoicing  per  se      satisfied the second condition. The      appellant’s assessable  income  has      to be  determined on  the basis  of      the price  received by  it for  the      goods exported.  If the  true price      has not  been disclosed  and  there      was under  invoicing,  the  logical      conclusion  prima   facie  is  that      there has  been failure on the part      of the  appellant to disclose fully      and truly all material facts before      the  Income-tax  Officer.  We  are,      therefore, satisfied  that both the      conditions required  to attract the      provisions of  section 147 (a) have      been complied with in this case.      In Income  Tax Officer  v. Mewalal  Dwarka Prasad  (176 I.T.R.529), this  Court held that if the notice issued under Section 148  is good  in respect  of one  item, it cannot be quashed under  Article 226  on the ground that it may not be valid in  respect of some other items. We need not, however, dilate on  this aspect  for the  reason that no argument has been urged  before us  to the  effect that  since the notice under section  148 is  found to be justifiable in respect of some loan  disclosed and not with respect to other loans, it is invalid.      For  the   above  reasons,  the  appeal  fails  and  is dismissed with  costs. Advocate’s  fee Rupees  ten  thousand consolidated. CIVIL APPEAL NOS. 2101-03 OF 1980:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11  

    No separate  arguments have  been  addressed  in  these appeals obviously  because the  decision in  Civil Appeal No 1562 of  1977 would  govern these  cases as  well.  For  the reasons given  for dismissing  Civil Appeal No.1562 of 1977, these appeals are also dismissed.       No costs.