Ajit K. Sengupta, J.:— This appeal is directed against the order passed on November 20, 1991, by the court of the first instance dismissing the writ application in which the appellant challenged the notice dated December 26, 1990, issued under section 148 of the Income-tax Act, 1961. Upon receipt of the same, the assessee wanted to know the reasons recorded before the said notice under section 148 was issued.
2. The reasons which have been recorded by the Income-tax Officer in issuing the notice run as follows:
“26-12-1990: The assessee filed his return of income on October 20, 1989, showing an income of Rs. 22,100 and an assessment was made under section 143(1)(a) on July 2, 1990 as per return so filed. Now, it is noted that the assessee had an income of Rs. 1,59,047 within the meaning of section 69A of the Income-tax Act, 1961, representing the value of jewellery, etc., vide order under section 132(5) of the Income-tax Act, 1961, dated September 28, 1989 in the case of the assessee relating to this assessment year which has escaped assessment for failure oh the part of the assessee to disclose fully and truly all material facts necessary for the assessment of his total income for the assessment year. In consequence of the above information, I have reasons to believe that the assessee's income for the assessment year has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961.
Issue notice under section 148.”
3. The factual background in which the contentions are raised by Mr. Bhattacharjee, counsel for the petitioner, against the initiation of the proceeding under section 147 read with section 148 is that the Income-tax Officer completed the assessment under section 143(1)(a) of the Income-tax Act, 1961, and such completion was not followed by initiation of proceedings for scrutiny of the case under section 143(2).; On the legal plane, he contends that the completion of assessment under section 143(1)(a) coupled with the expiration of the period of limitation for invoking the provisions of section 143(2) precludes the Assessing Officer from issuing a notice under section 148. The allegation that the income has escaped assessment is of no consequence and section 147 cannot be availed of, he submits. In other words, his contention is that, on the construction of the provisions of section 143(1)(a), it would be clear that an assessment made under that section necessarily excludes the scope of reassessment on the ground of escapement of income from assessment. Escapement of income originating in such assessment is contended to be remediable only by recourse to section 143(2) read with section 143(3). If this construction is accepted, it amounts to construing the provisions of section 143(1)(a) as a provision immunising the assessee from reassessment once and for all. Such a view is not acceptable. It is not warranted by the scheme of the Act. That apart, no construction which disables the taxing machinery and lets the assessee get away with not paying tax to the extent due should be adopted. If there be any element of non-disclosure in the assessment under section 143(1)(a), the Revenue will be within its legitimate right to bring the undisclosed income to tax the contention of Mr. Bhattacharjee, if accepted, would amount to saying that reassessment is limited only to non-disclosure in the process of making assessment after enquiries under section 143(2) read with section 143(3). Simply because the return of the assessee has been accepted without scrutiny and in good faith, the Assessing Officer is not precluded from initiating a proceeding satisfying the conditions therefor where the income has escaped assessment. There is nothing either in section 143 or in section 147 that can support such a view. The provisions of a tax statute should be interpreted in a manner leading to the result that everybody pays his due tax. The other contention of Mr. Bhattacharjee is that the basis of the reopening in this case is the finding in the order under section 132(5) wherein the Assessing Officer has held that a sum of Rs. 1,59,047 was the undisclosed income of the assessee under section 69A of the Act. The case urged on behalf of the assessee is that this order passed under section 132(5) merged with the assessment order under section 143(1)(a) dated September 20, 1989, and did not survive after such fusion in the assessment made under section 143(1)(a).
4. According to Mr. Bhattacharjee, the only recourse to be taken to make amends to the escapement of assessment under section 143(1)(a) is that provided in section 143(2) for reopening the assessment for the purpose of being made afresh after due scrutiny. That not having been done and the time for such scrutiny having expired, it is no more open to the Assessing Officer to resort to reassessment under section 147. In any case, in the ultimate analysis, all the contentions converge on one point, viz., that the assessment under section 143(1)(a) has immunity from reassessment under section 147, and reassessment, if warranted, can be done by resorting only to section 143(2). Therefore, where the limitation of time for invoking section 143(2) has expired, the Revenue stands powerless and totally disarmed. The escapement of income has to be countenanced, it is contended.
5. We have not been able to persuade ourselves to accept any such plea, howsoever novel. In our view, a return after its acceptance, whether in a summary manner or after scrutiny, may itself lead to reassessment proceedings provided the conditions for reassessment under section 147 exist.
6. The major consideration in reassessment is whether the assessee has disclosed truly and fully all materials necessary for assessment. Such disclosure is primarily to be made in the return itself. Therefore, any enquiry as to the question of non-disclosure necessarily directs one's attention to the contents of the return. The return may be accepted with or without scrutiny, that is immaterial. The only difference that may arise in a scrutiny assessment under section 143(2) is that ithe non-dis closure in the return may be removed by the assessee in the proceeding under section 143(3). But, in all cases, the very starting point of suppres sion of material is the filing of the return that contains, incomplete materials or concealment of materials without which no proper assess ment of income is possible. It is not the summary acceptance of the return under section 143(1)(a) that can operate as a bar against reassess ment. It is, rather, the further disclosure made by the assessee in the course of proceedings under section 143(3) whereby the assessee may take out his ease from the mischief of section 147. Therefore, the scope for initiating reassessment proceedings in an assessment made under section 143(1)(a) is far wider than in an assessment under section 143(2) read with section 143(3).
7. In our view, the power that can be exercised under section 143(2) to correct the assessment made under section 143(1) does not exclude the power of the Assessing Officer to reopen the assessment under section 147 if the ingredients of section 147 are satisfied. It is open to the Assessing Officer to invoke the jurisdiction under section 147, notwithstanding the fact that there are other remedies open to him under the Act. It cannot, therefore, be accepted that the reassessment under section 147 is vitiated because the Assessing Officer failed to invoke his power to correct the assessment already completed under section 143(1) by issuing a notice under section 143(2) of the Act.
8. But then, the learned advocate for the appellant contends that the materials disclosed do not satisfy the reopening of the assessment inasmuch as the Assessing Officer was fully aware of the findings made in the order under section 132(5) of the Act. We are, however, unable to accept this contention.
9. The purpose of the order under section 132(5) is altogether different. It is by no means an order of assessment. Under section 132(5), the Assessing Officer is required to make a tentative estimate of tax liability and to come to a decision if any part of the seized assets should be retained towards probable future tax liabilities. Therefore, that order is neither an assessment nor can form part of any assessment of income that has to be completed afterwards only on the basis of the return filed by the assessee in future. The fact that such an estimate was made by the Assessing Officer before the filing of the return is totally unrelated to the duty of the assessee of disclosing truly and fully all particulars necessary for the assessment. It is the bounden duty of the assessee to make disclosure of all primary facts while filing his return. The previous proceeding in connection with search and seizure operation is hot material.
10. There is a prima facie presumption that one who is found in possession of an article or thing is the owner thereof unless the presumption is rebutted by cogent evidence. The fact remains that the return did not disclose the assessee's liability under section 69A. Even if the assessee considered that he had no liability under section 69A despite the seizure in the course of search operations in his case, the balance-sheet or the statement of affairs to accompany the return ought to have contained a note to that effect. That not having been done by the assessee, the exercise of jurisdiction of reassessment by the Assessing Officer cannot be assailed. The Assessing Officer cannot be forced to abandon resort to reassessment merely on the ground that the Officer had, before filing the return, made a tentative estimate of the assessee's probable liability under section 69A in an order under section 132(5). As indicated earlier, the doctrine, of merger does not apply because the order under section 132(5) is not an assessment order but is part of the search and seizure operations. The assessee had, at any rate, a duty to disclose the fact of seizure of assets even if he considered the value of such assets not assessable as income under section 69A. Without such disclosure, his return in the light of the facts of the case cannot be said to be a return that furnished all primary facts for assessment.
11. On a perusal of the reasons recorded, it cannot be said that the Assessing Officer could not have come to a prima facie view on a rational belief that the amount which was to be determined as the undisclosed income of the assessee assessable under section 69A escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.
12. For the reasons aforesaid, we are of the view that the contentions raised on behalf of the assessee have no substance. We, therefore, dismiss this application for stay of the impugned order. This order virtually disposes of the appeal which is treated as on the day's list. The assessee will, however, be at liberty to raise all the contentions regarding the assessability of the said sum of Rs. 1,50,047 before the Assessing Officer.
13. The filing of the paper book is dispensed with and the undertaking is discharged.
14. All parties are to act on a signed xerox copy of this judgment upon usual undertaking.
Shyamal Kumar Sen, J.:— I agree.