JUDGMENT Rajes Kumar, J.
1. The Income Tax Appellate Tribunal, Allahabad has refened the following question under Section 27(1) of the Wealth-tax Act (hereinafter referred to as "Act") relating to the assessment years 1970-71 to 1976-77 for opinion to this Court:
"Whether on the facts and in the circumstance!) of the case, the Tribunal was in error in concluding that there was no failure on the part of the assessee to disclose material facts and in holding that proceedings taken under Section 17(1)(a) of the Wealth-tax Act were not valid?"
2. The brief facts of the case are as follows:
The assessee/opposite party (hereinafter referred to as "assessee") is a trust and was created by late Shri Chintamni Ghosh under a registered deed dated 24th July. 1924. In the said deed the provision for descendants and other relatives of the settler for charity and for due performance of the worship of the family deity was made. The deed of trust sets out the names of different beneficiaries and the extent of the benefits conferred on them. Briefly stated the allocation of the income was made as under:
15% Reserves 15% Sewa Puja 10% Relative allowance.
15% To be granted to the sebaiyets as remuneration for their services and the same is called 'A' allowance.
45% To be divided into 5 equal shares and each such share to be paid to each sebait for the maintenance of his family and the same is called 'B' Allowance.
3. The dispute arose between the assessee trust and the revenue with regard to the taxability of the wealth relating to the aforesaid items. Reference arising out of the proceedings relating to the assessment years 195.7-58 to 1959-60 was made to this Court which was disposed of by this court vide order dated 10th September. 1970 which is report in 80 ITR 331. In the said reference, this court held that 15% reserve and 15% Sewa Puja were to be assessed under Section 21(4) of the Wealth-tax Act and the allowance alled 'A' and 'B' were to be assessed under Section 21(4) of the Act and the remaining part under Section 21(4) of the Act for the assessment year under consideration. The assessee filed return giving complete details of the allocation of the income of the trust deed. However, the Assessing Authority has not assessed the aforesaid items. The Assessing Authority initiated proceeding under Section 17(1)(a) of the Act on the ground that the aforesaid items have not been disclosed by the assessee in the original return as wealth inasmuch as at the time of original assessment, the assessee did not bring the decision of this court to the notice of the Assessing Officer. The Assessing Authority was of the view that the wealth liable to tax was escaped assessment due to failure and omission on the part of the assessee to disclose fully and truly its wealth. Against the assessment orders, the assessee filed appeal before the Appellate Assistant Commissioner. It was contended before him that the trust deed was on record and the returns were filed on that basis, that the allowances 'A' and 'B' which the Wealth Tax Officer thought was taxable had already been disclosed in the trust deed. Agreeing with the assessee's contention, the Appellate Assistant Commissioner held that all the relevant facts were available before the Wealth Tax Officer at the time of passing of the original orders and the order of Hon'ble High Court had also come by then. He, therefore, was of the opinion that the provision of Section 17(1)(a) of the Act would not apply and accordingly, quashed the order passed by the Wealth Tax Officer. Revenue filed appeal before the Tribunal against the order of the Appellate Assistant Commissioner. The Tribunal has held that the Revenue was the party to the case decided by Hon'ble High Court and it cannot be held that it was ignorant of the same and it was the duty of the assessee to bring the order of the High Court to the notice of the Revenue. The Tribunal, accordingly, concluded that it cannot be held that the assessee had suppressed material information and there was failure on his part to disclose material facts. Tribunal accordingly held that the provision of Section 17(1)(a) of the Act was not valid. The Tribunal, however, restored the matter to the file of the Appellate Assistant Commissioner to examine whether the requisite conditions for the purpose of reopening the proceedings under Section 17(1)(a) of the Act were satisfied or not.
4. We have heard Sri Shambhu Chopra. Learned Standing Counsel for the Revenue and Sri Vikram Gulati, learned counsel for the respondent-assessee.
5. The short question involved in the present case whether on the facts and circumstances of the present case, there was a failure on the part of the assessee to disclose all material facts necessary for assessment within the meaning of Section 17(1)(a) of the Act. Section 17(1)(a) of the Wealth Tax Act reads as follows.
"17, (1)-lf the Wealth Tax Officer-
(a) has reason to believe that by reason of the omission or failure on the part of any person to make a return under Section 14 of his net wealth or the net wealth of any other person in respect of which he is assessable under this Act for any assessment year or to disclose fully and truly all material facts necessary for assessment of his net wealth or the net wealth of such other person for that year, the net wealth chargeable to tax has escaped assessment for that year, whether by reason of under assessment or assessment at too low a rate or otherwise."
6. It may be mentioned here that Section 17(1)(a) of the Wealth Tax Act. Section 34(1)(a) and Section 147(1)(a) of the Income Tax Act, 1922 are pari- materia.
7. In the present case, the trust deed was on record. The allocation of the income as per trust deed has also been disclosed by the assessee. Therefore, so far as the assessee is concerned, all the primary materials were disclosed. It was not the duty of the assessee to suggest as to how the inference should be drawn on the said material. In the reference case, decided by the Allahabad High Court revenue was also the party and it was the duty of the Assessing Authority to apply the decision of the High Court and in case if he failed to apply the said decision while passing original assessment order, it cannot be said that the assessee had failed to disclose the primary material facts. It is a settled principle of law that the responsibility of the assessee is limited to the extent of disclosure of all primary material facts and nothing beyond that vide Calcutta Discount Co. Ltd v. ITO reported in 41 ITR, 191 (SC), once the assessee has disclosed all the primary facts that is the end of his duty. It is then for the assessing authority to draw the proper conclusion from those facts. If the conclusions drawn by the assessing authority are erroneous, the assessing authority cannot reopen the assessment merely on the basis of a change of opinion. This principle has been reiterated by the Supreme Court in ITO v. Lakhmani Mewal Das reported in 103 ITR, 1 (SC), ITO v. Madnani Engineering Words Ltd, 118 ITR, 1 (SC), CIT v. Bhanji Lavji 79 ITR 582 (SC), Parashuram Pettery Works Co. Ltd v. ITO 106 ITR 1 (SC) and CIT v. Burlop Dealers Ltd, 79 ITR 609 (SC).
8. In Foramer v. CIT 247 ITR 436 (All). It was held that where there was no failure on the part of the assessee to make a return disclosing full and material particulars for assessment, notice cannot be issued under Section 148 on mere change of opinion. Against that decision an appeal was filed in the Supreme Court vide CIT v. Foramer France 264 ITR 566, and the decision of tins Court was upheld by the Supreme Court. The said decision of this Court has been followed by the Full Bench of the Delhi High Court in CIT v. Kelvinator of India Ltd, 256 ITR, 1. Same view has been reiterated by the court the case of J.P. Bajpai, HUF v. Commissioner of Income Tax reported in 269 ITR, 40
9. In the Case of Mohini Bai M. Sharda v. 1st Income Tax Officer reported in 190 ITR, 541, the trust was created by the assessee for 'he benefit of her grand children and such fact was disclosed by the assessee in the return. The I.T.O. has not included the income of the grand children of the assessee in her total income in the original assessment. Proceeding under Section 147(1) of the Income Tax Act was initiated. Karnataka High Court held that the formation of belief must have a nexus to the failure of the assessee to disclose true and full particulars, it is sufficient if the assessee has disclosed all the primary facts and any further enquiry or investigation that is called for should be done by the Income-tax Officer. If the I.T.O. failed to make any enquiry or investigation, it was the failure on the part of the I.T.O. rather than the assessee, the proceeding under Section 147(1)(a) of the Act has been accordingly quashed.
10. In the case of Commissioner of Income Tax v. Gujarat Ginning and Manufacturing Co. Ltd reported in 205 ITR, 40, the assessee, an engineering and manufacturing company, stopped its business of spinning and tin- only activity which it had been carrying on was to let some portions of its property, but some godowns were in the occupation of the assessee While submitting its return of income, the assessee did not include the annuals letting value of these godowns but claimed deduction of municipal taxes in respect of them. The Income Tax Officer accepted the computation made by the assessee and completed the assessments. Subsequently, in view of the decision of the Calcutta High Court in Liquidator, Mahmudabad Properties Ltd v. CIT reported in 83 ITR 470, the Income-tax Officer issued notice under Section 148 read with Section 147(a) of the Income Tax Act, 1961 and included the annual letting value of the godowns in the income of the assessee and also withdrew the deduction granted in respect of the municipal taxes paid in respect of those properties. The Tribunal quashed the reassessment proceeding. In reference Gujarat High Court held that the assessee had disclosed all the material facts. It had disclosed the fact that it was in possession of the godowns and, therefore, the annual letting value in respect of the same was not computed. It was for the Income-tax Officer to draw the necessary inference therefrom. The income-tax Officer did draw an inference in favour of the assessee and it was only because of the subsequent decision of the Calcutta High Court in the case of Liquidator, Mahmudabad Properties' case (1972) 83 ITR 470, that the subsequent Income-tax Officer changed his opinion. Thus, this clearly appears to be a change of opinion and it cannot be said that the income in this case had escaped assessment as a result of any failure or omission on the part of the assessee to disclose truly and correctly all the facts pertaining to its income.
11. In the case of Associated Stones Industry Kolkata Limited Versus Commissioner of Income Tax, reported in 224 ITR, 560 the Hon'ble Supreme Court held that the duty of the assessee is only to disclose full particulars of material facts necessary for his assessment for the relevant year. The expression "material facts" in Section 34(1)(a) of the Income Tax Act, 1922 refers to only primary fact and the duty of the assessee is only to disclose such primary fact. There is no duty cast on the assessee to indicate or draw attention of the Income Tax Officer to what factually or legally or other inference can be drawn from the primary fact.
12. In view of the facts of the present case and the decisions of the Apex Court and the High Court referred hereinabove, it is held that there was no failure on the part of the assessee in disclosing the primary fact and, therefore, the initiation of proceeding under Section 17(1)(a) of the Act was not justified.
13. In the result, the question referred is answered in the negative i.e. in favour of the assessee and against the revenue.