R.R. Misra, J.
1. By means of the present writ petition, Sri Jawahar Lal Gupta, the petitioner, as an individual, has sought to challenge the notice dated January 15, 1991, issued by the Income-tax Officer, Ward-1(2), Agra, seeking to reopen the assessment proceedings under Section 147(1)(a) of the Income tax Act, 1961 (hereinafter referred to as 'the Act'), for the assessment year 1989-90. Immediately on receipt of the said notice, the assessee had asked for a copy of the reasons recorded by the Income-tax Officer on which the assessment was sought to be reopened. Since no return was filed, the Income-tax Officer declined to do so until the return was filed. Aggrieved against the same, the petitioner had filed Writ Petition No. 353 of 1991 in this court, which was decided on April 18, 1991 (see : [1992]196ITR147(All) ). In the counter affidavit, the respondent had stated that he had never refused access to the reasons on which notice under Section 147(1)(a) of the Act was issued, nor had he refused a copy thereof. Rather the Income-tax Officer had, vide his letter dated July 18, 1991, informed the petitioner that he could inspect the reasons recorded for the issuance of the said notice after he had filed the return in compliance with the said notice under Section 147(1)(a) of the Act already served on him. At the time of hearing before the court, it was not in dispute that the assessee had submitted his return in pursuance of the notice under Section 147 of the Act. Accordingly, this court had directed that before the Income-tax Officer proceeds further to assess in pursuance of the said notice under Section 147 of the Act, he shall confront the assessee with the reasons recorded by him and supply him a copy thereof. It was also made clear that after the petitioner is confronted with the reasons and if he still feels aggrieved, it shall be open to the petitioner to challenge the notice under Section 147 of the Act on such grounds and before such forum which may be available to him under the law. The said writ petition was accordingly, disposed of on April 18, 1991. Thereupon, the Income-tax Officer supplied a certified copy of the reasons for the issuance of the said notice under Section 147 of the Act in the year in dispute. The said reasons are reproduced hereunder :
'Shri Jawahar Lal Gupta (assessment year 1989-90) :
A perusal of the records shows that the assessee filed a return of income for the assessment year 1989-90 on October 27, 1989, declaring an income of Rs. 93,310. As per the details furnished along with the return it is noticed that as per Schedule E to the balance-sheet, dated March 31, 1989, under the head 'Other liabilities' the following liabilities are shown :
Rs. P.
1.
U. P. Sales tax
52,939.50
2.
Central Sales tax
3,654.79
3.
U. P. Sales tax
17,059.88
The assessee has not filed any evidence that these liabilities were actually paid before the filing of the return as provided in the first proviso to Section 43B and such income of Rs. 73,657 (52,939.50 + 3,654.79 + 17,059.88) has escaped assessment.
Information has been received from the Assistant Commissioner of Income-tax, Circle I(1), Agra, that income of Rs. 22,000 declared by Miss. Mayura Gupta, minor daughter of Shri Jawahar Lal Gupta, for the assessment year 1989-90 is the income of Shri Jawahar Lal Gupta and is to be clubbed with his income.
I, therefore, have reason to believe that income of more than Rs. 95,652 (73,662 + 22,000) chargeable to income-tax for the assessment year 1989-90 in the case of Shri Jawahar Lal Gupta has escaped assessment Issue notice under Section 147 of the Income-tax Act, 1961.'
2. Thus, the assessment for the year in dispute is sought to be reopened on two counts as stated above. Before proceeding further, we have to take notice of the fact that for the assessment year 1989-90 (the year in dispute) three assessable entities are involved in this case. The first is Shri Jawahar Lal Gupta, the petitioner, in his capacity as an individual, second is Km. Mayura Gupta, minor daughter of Shri Jawahar Lal Gupta, in the status of an individual, and the third is Messrs. Continental Chemical Co., Rawat-pura, Agra, a registered firm. Along with the writ petition, the assessee has filed only a copy of the acknowledgment of the return (I. T. S. 2) filed by Shri Jawahar Lal Gupta, as an individual, for the assessment year 1989-90, but neither the copy of the return as filed in the original proceedings for the assessment year in dispute has been filed, nor has a copy of the return filed in response to the impugned notice under Section 147 of the Act for the assessment year 1989-90, been filed by Shri Jawahar Lal Gupta along with the writ petition. We find that the writ petition wrongly states that the copy of the return is being filed and marked as annexure I to the writ petition whereas, in fact, only a copy of the acknowledgment of the return has been filed and neither of the other aforesaid returns has been filed. Consequently, details which ought to have been submitted under the law by the assessee in regard to the income of the minor daughter have not been filed. The writ petition further states that along with the return, the petitioner has also filed (1) computation of income, (2) balance-sheet, (3) statutory audit statement and report on Form No. 3 CB, under rule 6G(1)(b) and Form No. 3 CD under rule 6G(2)(a). In paragraph 5 of the writ petition, it has further been averred that copies of the said documents are being filed as annexure 2 to the writ petition. But when we peruse annexure 2 aforesaid, we find that the said documents relate to Messrs. Continental Chemical Co., Rawatpura, Agra, i.e., a registered firm and not to the petitioner. It may be that the petitioner might have filed the said documents along with the return of the said registered firm, but no foundation has been laid in the writ petition whatsoever that the said documents have been filed by the petitioner, who is an individual, along with his return. At any rate even if the petitioner may have filed such documents, copies of none of such documents have been annexed to the writ petition.
3. Now, turning to the first reason given by the Income-tax Officer for reopening the assessment, we find that under the head 'Other liabilities' in Schedule 'E' as on March 31, 1989, the said liabilities included three amounts towards the sales tax. Section 43B of the Income-tax Act, 1961, provides that certain deductions are allowed only on actual payment. In this writ petition, we are concerned with the sum payable by the assessee by way of sales tax only. The first proviso to Section 43B states that the deduction in respect of any sum payable by way of tax shall be allowable if the amounts have been paid before the due date for the filing of the return of income under Section 139(1) and the evidence of such payment is furnished by the assessee along with that return. In the grounds taken by the Income-tax Officer for reopening the assessment, it has been mentioned as a fact that the assessee had not filed any evidence that the said liabilities of sales tax were actually paid before the filing of the return as provided in the first proviso to Section 43B of the Act. The claim of the assessee in these circumstances that the deductions made in respect of the said liabilities are allowable is incorrect and the said liabilities were not liable to be allowed to that extent and, therefore, the income to that extent has escaped assessment. Shri S. P. Gupta, learned counsel appearing for the assessee, has during the course of his submissions placed strong reliance on the statutory audit statement and report in Forms Nos. 3CB and 3CD, wherein against the column 7, 'Any tax, duty or other sum not paid during the previous year' the word 'Nil' has been written. He, therefore, argued by placing reliance on Circular No. 601, dated June 4, 1991 (see [1991] 190 ITR 4), issued by the Central Board of Direct Taxes that such a certificate from the accountant is complete evidence of payments made under Section 43B of the Act and that the Income-tax Officer was not right in law in not applying his mind to the said certificate. He, therefore, contended that the Income-tax Officer is incorrect in coming to his conclusion that no evidence with regard to the liabilities which were actually paid before filing of the return was furnished. In our opinion, the said contention has got no force for a number of reasons. Firstly, the certificate, as is clear from annexure 2 to the writ petition, related to Messrs. Continental Chemical Co., which was a registered partnership firm, in respect of which the assessee has himself filed copies of assessment orders for the assessment years 1982-83 to 1984-85, as annexure 3 to the writ petition. A bare perusal of the said assessment orders will show that Messrs. Continental Chemical Co., Rawatpura, Agra, was assessed as a registered firm for the years in dispute. It had two partners, one was Sri Jawahar Lal Gupta and the other was Smt. Ratan Devi. The shares of the said two partners have also been determined at the end of the assessment orders passed in the said cases as provided under the law. Page 66 of the writ petition also is a copy of the notice of demand under Section 156 of the Act relating to Messrs. Continental Chemical Co., Rawatpura, Agra, for the assessment year 1983-84 in the status of 'registered firm'. It may be kept in mind that as far as the assessments of this registered firm for the assessment years 198586 to 1989-90 (the years in dispute) are concerned, copies of the same have not been filed. However, proceeding further we find that the submission made by Sri S. P. Gupta is that if the directions contained in the aforesaid circular dated June 4, 1991 (see [1991] 190 ITR 4), are taken into account, the said certificate of the auditor/accountant is sufficient evidence of the payments in regard to the said liabilities. We, however, do not agree with the said submission. From a perusal of paragraphs 5 and 6 of the aforesaid circular, it is clear that as far as the evidence of payment of tax is concerned, a certified copy of the accountant might be sufficient for the purpose of making prima facie adjustment in regard to the assessments made under Section 143(1)(a) of the Act. The circular further states as follows (see [1991] 190 ITR 4,) :
' . . . . However, in cases selected for scrutiny and assessment under Section 143(8), further evidence can be called for, if necessary.'
4. Thus, it is only for the purposes of summary assessment that such certificate could be taken into account and not for regular assessments or reassessments under Section 147 of the Act. Further, in the present case, from the averments made in the writ petition, it is not clear that the said certificate was available even in the case of the assessee, Sri Jawahar Lal Gupta, individual. Thus, our conclusion, on the facts of this case, is that the petitioner cannot take any assistance either from the said certificate of the auditor, which shows 'Nil' against column No. 7 or from the said circular. In fact, what is required under the law is that the accountant should have positively verified that the payment of tax, claimed as deduction, had been made by the due date for the filing of the return. The same has not been made obvious in the present case. Since, as is made clear, the assessee has failed to show that he had filed any evidence regarding actual payment of the said liabilities before the filing of the return, in our opinion, the Income tax Officer was justified in law in forming the belief as stated above for reopening the said assessment.
5. Coming now to the second reason for reopening the assessment aforesaid, the position is as follows :
Kumari Mayura Gupta is admittedly the minor daughter of the petitioner. The petitioner has filed a copy of the return in respect of Kumari Mayura Gupta for the assessment year 1989-90 as annexure 11 to the writ petition. Towards the end of the assessment order of Kumari Mayura Gupta for the assessment year 1989-90, we find that after discussion of the relevant evidence the Assessing Officer has concluded as follows : ' Looking into the totality of facts and circumstances of the case, these receipts are not gifts but in the nature of casual and nonrecurring receipts, and hence liable to be charged to tax as income of the recipient. All these receipts have been used for business purposes, hence it cannot be affirmed nor has the assessee been able to prove that they were made involuntarily and without consideration. The income accruing from it is to be clubbed in the hands of the guardian as prima facie it appears to be indirect transfer of money for the benefit of the minor, since the paying capacity of the donors has not been established.'
6. Thus, the Income-tax Officer had assessed Km. Mayura Gupta for the said year in regard to the said income by way of a protective measure.
7. From a perusal of the second reason extracted above in the case of the petitioner for reopening the assessment under Section 147(a) of the Act, it is clear that what the Assessing Officer now seeks to do is to assess the income of Sri Jawahar Lal Gupta as a substantive measure.
8. In the case of Lalji Haridas v. ITO : [1961]43ITR387(SC) , it has been held by the Supreme Court that in cases where it appears to the income tax authorities that certain income has been received during the relevant year but it is not clear as to who has received that income and, prima facie, it appears that the income may have been received either by A or by B or by both together, it would be open to the income-tax authorities to determine the question as to who is responsible to pay tax by taking assessment proceedings both against A and B. The said case arose out of a writ petition filed in the High Court, Bombay, against issuance of certain notices against Sri Chhotalal Haridas by the Income-tax Officer who wanted to proceed against the petitioner in the said proposed assessment proceedings in the nature of a protective assessment. The Supreme Court, as stated above, held that it would be open to the relevant income-tax authorities to take appropriate proceedings both against Sri Chhotalal Haridas, the petitioner as well as the other person who had also challenged the proceedings. Likewise, very recently in the case of Sohan Singh v. CIT : [1986]158ITR174(Delhi) , the Delhi High Court upheld the proceedings for reopening the assessment, where one of the assessments was made on a protective basis. In the case of Sohan Singh : [1986]158ITR174(Delhi) , after the completion of the original assessments of the assessee, an individual, for the assessment years 1963-64 to 1969-70 on his income by way of salary, dealings in shares and interest, the Income-tax Officer received information from another officer that the latter had held the (alleged) income of a firm, which the assessee had not disclosed in his returns, to belong to the assessee. That Officer had also framed a protective assessment on the firm and granted registration under Section 185 of the Income-tax Act, 1961. The Income-tax Officer in the case of Sri Sohan Singh, however, reopened the assessments under Section 147(a) and holding that the firm was only a benamidar concern of the assessee and the assessee was the beneficial owner of the firm's income, included that income in the total income of the assessee. On the challenge thrown against the reopening of the said assessments, the Delhi High Court held that the reopening of the assessments was justified under the law. That case appears to be nearer to our case and in case we find that the assessee not having disclosed that income, had not disclosed fully and truly all material facts for the assessment, the assessment could be validly reopened under Section 147(a) against the assessee. Thus after making a protective assessment in the case of Kumari Mayura Gupta, in our opinion, the law authorises the Income-tax Officer to initiate proceedings for reopening the assessment even against the assessee by way of completing the substantive assessment. In the case of the assessee before doing so it has to be found out as to whether the necessary conditions for taking action under Section 147 of the Act are fulfilled or not.
9. To confer jurisdiction to issue notice for reopening an assessment under Section 147 of the Act, two conditions have been specified, namely, that the Income-tax Officer has reason to believe that there was an underassessment and that the underassessment has resulted from nondisclosure of material facts. See the case of Calcutta Discount Co. Ltd. v. ITO : [1961]41ITR191(SC) and the case of Sujir Ganesh Nayak and Co. v. ITO : [1976]104ITR524(Ker) . We have, therefore, to examine as to whether in the present case the assessee had disclosed all the material facts for his assessment or not.
10. Under Section 64 of the Income-tax Act, 1961, in computing the total income of any individual, there shall be included all such income as arises from assets transferred directly or indirectly to a minor by his guardian. This has been done by adding Explanation 3 to Sub-section (1) of Section 64 of the Act with effect from April 1, 1989. The necessity for adding the said Explanation arose to get over the difficulty caused by the decision of the Supreme Court in the case of CIT v. Prem Bhai Parekh : [1970]77ITR27(SC) . In the said case a minor was admitted to the benefits of a partnership and the capital investment by him in the partnership came out of a gift made to him by his father without adequate consideration. The Supreme Court held that the income arising to the minor from his admission to the benefits of partnership could not be included in the hands of the father under Section 16(3)(a)(iv) of the Indian Income-tax Act, 1922, because the connection between the asset transferred by the father of the minor son and the income arising to the latter out of his admission to the benefits of partnership was remote and not proximate. According to the view of the Supreme Court, the income must arise as a result of transfer and not only in some manner connected with it. The various clauses of Section 64(1) of the Act not only deal with direct transfer of assets but also with indirect transfer of assets. The said Explanation was, therefore, added to Section 64(1) of the Act. The form of return has also been amended during the year in dispute. It was imperative on the part of the petitioner to have disclosed in his return that part of the income of the minor which was liable to be clubbed under the law. There is no material or evidence on record to show that this has been done by the assessee-petitioner in the present case.
11. As stated by the Orissa High Court in the case of Govinda Choudhury and Sons v. ITO : [1977]109ITR370(Orissa) , the words 'omission or failure to disclose fully and truly all material facts necessary for his assessment for that year' in Section 147(a) of the Income-tax Act, 1961, postulated a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. In the present case, as we have already observed, the assessee-petitioner has neither filed a copy of the original return for the assessment year 1989-90, nor filed a copy of a return filed in pursuance of the notice under Section 147 of the Act, nor has filed a copy of the earlier assessment order for the assessment year 1989-90, nor any averment to that effect even finds a place in the present writ petition; therefore, this court is not in a position to examine the various facts from which it could be concluded as to what was the factual position prior to issuance of the impugned notice under Section 147 of the Act for the assessment year 1989-90. The inference, therefore, is that the facts stated by the Income-tax Officer in his 'reasons to believe' in so far as they relate to issuance of notice appear to be correct as far as the record of the present writ petition is concerned. The conclusion is that the assessee had not disclosed the income of Rs. 22,000 declared by Kumari Mayura Gupta, minor daughter of Sri Jawahar Lal Gupta, the petitioner, for the assessment year 1989-90 in his return and that the same was liable to be clubbed in his income. It would not be out of place to notice here a decision of the Supreme Court in the case of Kantamani Venkata Narayana and Sons v. First Addl. ITO : [1967]63ITR638(SC) , which states that the assessee does not discharge his duty to disclose fully and truly material facts necessary for the assessment for the assessment year in question by merely producing books of account or other evidence. He has to bring to the notice of the Income tax Officer particular items in the books of account or portions of documents which are relevant. Even if it be assumed that, from the documents produced, the Income-tax Officer, if he had been circumspect, could have found out the truth, he is not on that account precluded from exercising the power to assess income which had escaped assessment. In that case, the assessee had presented writ petitions against the Income-tax Officer for directing him to refrain from proceeding in pursuance of the notices to reopen the assessments and it appears from the affidavit of the Income tax Officer that there was considerable increase in the investments in the money lending transactions of the assessee and its wealth has been discovered which was disproportionate to the income of the assessee and no attempt was made by the assessee to furnish some reasonable proof of the source of additional wealth. On these facts it was held that the Income-tax Officer had, prima facie, reason to believe that the assessee had omitted to disclose fully and truly all material facts and that in consequence of such non-disclosure income had escaped assessment. Therefore, the said officer was held to have jurisdiction to issue the notices in question.
12. In the case of S. Rajanna v. First ITO : [1972]83ITR251(Mad) , it has been held that the petitioners who wanted the court to restrain the officer from proceeding further with the notices holding that the Income-tax Officer had no jurisdiction to invoke Section 147 has to establish that he had no material at all before him for believing that there was no nondisclosure of material facts. In the present case, we find that the assessee-petitioncr had failed to do so. But at the same time we are conscious of the fact and we accordingly observe that these observations made by us are only at the stage 'reason to believe' for the Income-tax Officer to proceed with reopening of the assessment and are not final conclusions with regard to the completion of the assessment orders under Section 147 of the Act and it shall be open to the assessee to appropriately challenge the same in accordance with law at the appropriate stage.
13. Sri S. P. Gupta, learned counsel appearing for the assessee, has rightly stated that the adequacy and sufficiency of the reasons for reopening the assessment cannot be gone into by this court. He has also not advanced any submission in regard to the adequacy or sufficiency of the said reasons. Thus we are left with the last submission of Sri S. P. Gupta to the effect that the basis of the information recorded by the Assessing Officer in the assessment order in the case of Kumari Mayura Gupta alone could not be a valid information for the purposes of initiating proceedings under Section 147 of the Act in the case of the petitioner. This argument was also advanced in the case of Sohan Singh : [1986]158ITR174(Delhi) and the same had been repelled by the Delhi High Court by observing that there could be no estoppel of one authority or officer consequent on conclusions of facts arrived at by another officer. It is, however, clear in the present case, that Sri S. P. Gupta did not submit any claim in respect of estoppel. All that he has stated is that the information of the Assessing Officer in the case of Kumari Mayura Gupta could not form the basis for reopening the assessment in the case of the petitioner. We, however, did not agree to this submission. That apart, on the facts of the present case we find that the assessment of Kumari Mayura Gupta was only a protective assessment and the assessment sought to be made in the case of the petitioner is a substantive assessment. Since, under the law, it is open to the Income-tax Department to proceed against both in so far as the assessments are concerned, we feel that on the facts of the case stated above the Income-tax Officer was justified in initiating proceedings for reopening the assessment.
14. Sri S. P. Gupta has during the course of his submission relied upon the case of South India Shipping Corporation Ltd. v. ITO : [1976]103ITR1(Mad) , which does not relate to proceedings under Section 147 of the Act. The other case, however, relied upon by him is the case of ITO v. Lakhmani Mewal Das : [1976]103ITR437(SC) . All that this case lays down and which is relevant for the purposes of our case is that there should be a live link or close nexus there between the material before the Income-tax Officer and the belief which he was to form. As in the present case, in our opinion, there was on the facts stated above a rational connection for the formation of the belief regarding the escapement of income, the impugned action taken by the Income-tax Officer, in our opinion, was justified. The other case relied upon by learned counsel for the assessee is the case of Ganga Saran and Sons P. Ltd. v. ITO : [1981]130ITR1(SC) , in which it has been stated that the words 'reason to believe' are stronger than the words 'is satisfied'. The belief entertained by the Income-tax Officer must be reasonable or, in other words, it must be based on reasons which are relevant and material. As already held by us in the present case, the material sought to be relied upon by the Income-tax Officer was quite relevant and it cannot termed as immaterial. In the case of Madhya Pradesh Industries Ltd. v. ITO : [1965]57ITR637(SC) , relied upon by learned counsel for the assessee, the court has observed that making a fishing enquiry as a pretence cannot be allowed under the law for the purposes of reopening the assessment. This position does not operate in the present case. The case of CIT v. Dwarka Prosad Bazaz : [1987]168ITR572(Cal) , relied upon by learned counsel for the petitioner, also related to benami transactions and is not relevant for the purpose of the present case.
15. Thus, the assessee-petitioner having failed to discharge the burden that lay on him in satisfying this court that the assessing authority had no jurisdiction to invoke proceedings under Section 147 of the Act by the impugned notices and because of the petitioner's omission to place all necessary facts before this court, as pointed out in the judgment and on the view taken by us as stated above and on the facts and materials which were present in this case before the Income-tax Officer at the time of issuance of the said notices, in our opinion, the Income-tax Officer concerned was wholly justified under the law in seeking to reopen the assessment proceedings against the petitioner under Section 147 of the Act by the impugned notice for both the aforesaid reasons.
16. In the result, the writ petition fails and is dismissed accordingly.