HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Sri Krishna Pvt. Ltd. etc. v. Income Tax Officer, Calcutta and others
Civil Appeal No. 1562 of 1977 with Civil Appeal Nos. 2101-2103 of 1980
[1996] Supp 3 SCR 627 ·
Income-tax Act, 1961: sections 147, 148 and 151 (historical versions)
Holding and result. Evidence that common or similar lenders were bogus in the succeeding year supplied reasonable grounds to believe that the earlier return had not disclosed the loan facts fully and truly. At the notice stage, the question was reasonable belief, not final proof of failure and escapement.
Sources & disclosures includedDownload original judgment / order
Two-judge bench; judgment delivered by B. P. Jeevan Reddy, J. · B. P. Jeevan Reddy, J. · S. B. Majmudar, J.
Assessment years: 1959-60, 1960-61 (subsequent-year material)
01 · Facts of the case
For assessment year 1959-60 the assessee disclosed Rs.8,53,298 in unsecured hundi loans, which were accepted. In the 1960-61 assessment, many loans were found bogus or linked to directors and principal shareholders. The officer issued section 148 notice for 1959-60; the assessee challenged the existence of reasonable grounds for reopening.
02 · Discussion by the Hon’ble Court
Reassessment power was safeguarded but depended on full and true disclosure. Whether a claimed loan was genuine was a material fact, not merely a later inference. Ten supposed lenders accounting for Rs.3,80,000 of the earlier total were shown to be bogus or name lenders in the succeeding assessment. A false or misleading disclosure could not satisfy the statutory duty.
03 · Judicial decision
The material furnished reasonable grounds to believe that income had escaped through failure to disclose fully and truly. The Court stressed that notice validity asked only whether such grounds existed, not whether the omission and escaped income had already been established.
04 · Outcome / in whose favour
Civil Appeal No. 1562 of 1977 was dismissed with consolidated advocate’s fee of Rs.10,000. Civil Appeal Nos. 2101-2103 of 1980 were also dismissed, without costs.
05 · AKHB REVIEW POINT
AKHB analysis: separate the threshold for a lawful reopening notice from final reassessment proof. Cross-year evidence about identified lenders can support reasonable belief when it bears directly on the truth of primary loan facts, but current notices must be tested under the present statutory scheme and later precedent.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 15-page SCR report read in page-preserving text and every page image inspected through both connected dispositions.
- Exact catalogue SHA-256 and 15-page count verified; the complete report was read and every source page image inspected.
Statutory scope
Sections 147, 148 and 151 have since changed materially. The note does not clear any notice under the current reassessment regime.
Later treatment
Source checked 2026-10-12. No comprehensive later-treatment or present-law clearance is represented. The reassessment provisions examined were the versions governing assessment year 1959-60.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from the identified primary report and has not been represented as independently human-reviewed.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, governing statutory version and subsequent judicial treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court's holding, and no current-law clearance is claimed.