ivil Appeal No 1187 of 1974
From the Judgment and Order dated 19121973 of the Calcutta High Court in Appeal No 131 of 1971
SC Manchanda and Ms A Subhashini for the Appellants
BP Maheshwari SP Mittal and RS Rana for the Respondent The Judgment of the Court was delivered by RANGANATH MISRA J
This appeal by the Revenue is by certificate and is directed against the judgment of a Divi sion Bench of the Calcutta High Court which upheld the decision of a single judge in a writ petition quashing the notices issued to the petitioner under section 147a of the Income Tax Act of 1961 in respect of assessment years 1960 61 1961 62 and 1962 63
Respondent was assessed to income tax for the assessment year 1960 61 under section 233 of the Act of 1922 on 431961 and for the following two assessment years under section 1433 of the Act of 1961 on 10th and 11th June 1963 respectively
Notices under section 147a read with section 148 of the Act of 1961 were issued to the respondent in respect of these three assessment years whereupon he challenged the validity of those notices by filing an appli cation under Article 226 of the Constitution
Though the notices did not disclose any material to justify their issue the Income tax Officer in his return to the rule nisi before the High Court stated   
The assessment for the year 1963 64 of Smt
Sushila Bala Devi Ladia wife of the petitioner was taken up by me
During the course of the said assessment she contended having received valuable assets from the petitioner between 11th December 1955 and 28th October 1960 without adequate consider ation in money or money s worth
It was con tended on her behalf that she received over 1203 tolas of gold in jewellery on or about 11121955 and 1104 Rs100000 in cash on or about 28101960
It was further contended on her behalf that the said jewellery was sold between the years 1959 and 1962
The income from the said assets which should have been included in the return of the petitioner was not so included by him
The capital gains arising therefrom was also not included or disclosed by the petitioner in his returns
 On behalf of the assessee reliance was placed on the deci sion of this Court in VDM RM M RM
Muthiah Chettiar vs Commissioner of Income tax Madras where with reference to failure of the assessee to include the share income of his wife and minor child in a firm this Court held In considering the first question it is necessary to refer to certain provisions of the Income tax Act 1922
By section 3 the total income of the previous year of every individual Hindu Undivided family company and local authority and of every firm and other association of persons or the partners of the firm or the members of the association individually was charged to tax for that year in accordance with and subject to the provi sions of the Act at any rate or rates pre scribed by the Finance Act
Total income was defined in section 215 as meaning total amount of income profits gains referred to in sub section 1 of section 4 computed in the manner laid down this Act 
Section 41 set out the method of computation of total income it enacted I subject to the provisions of this Act a total income of any previous year of any person includes all income profits and gains from whatever source derived which a are received or are deemed to be received in the taxable territories in such year by or on behalf of such person or b if such person is resent in the taxable territories during such year i accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year or    1105 Section 22 by sub section 1 required the income tax officer to give notice by publica tion in the press in the prescribed manner requiring every person whose total income during the previous year exceed the maximum exempt from tax to furnish a return in the prescribed form setting forth his total in come
Sub section 2 authorised the Income tax Officer to serve a notice upon a person whose income in the opinion of the income tax officer exceeded the minimum free from tax
Section 23 dealt with the assessment
It conferred power upon the Income tax Officer to assess the total income of the assessee and to determine the sum payable by him on the basis of such return submitted by him
Rule 19 framed under section 59 of the Income tax Act 1922 required the assessee to make a return in the form prescribed thereunder and in Form A applicable to an individual or a Hindu Undi vided family or an association of persons there was no clause which required disclosure of income of any person other than the income of the assessee which was liable to be in cluded in the total income
The Act and rules accordingly imposed no obligation upon the assessee to disclose to the Incometax Officer in his return information relating to income of any other person by law taxable in his hands But section 16 sub section 3 provided in computing the total income of any individu al for the purpose of assessment there shall be included the classes of income mentioned in clauses a and b
Sub section 3aii insolar as it is material provided In computing the total income of any individual for the purpose of assessment there shall be included a so much of the income of a wife or minor child of such individual as arises directly or indirectly   ii From the admission of minor to the benefits of partnership in a firm of which such individual is a partner  The assessee was bound to disclose under section 225 the names and addresses of his partners if any engaged in business profes sion or vocation together with the location and styled of the principal place and branches 1106 thereof and the extent of the shares of all such partners in the profits of the business profession or vocation and branches thereof but the assessee was not required in making a return to disclose that any income was re ceived by his wife or minor child admitted to the benefits of partnership of a firm of which he was a partner
 Upon this conclusion this Court therein held For failing or omitting to disclose that income proceedings for reassessment cannot therefore be commenced under section 34 la Relying upon this decision the learned Single Judge quashed the notices
The Revenue appealed to the Division Bench but failed to obtain any relief in view of the said decision of this Court
The Division Bench also took note of the decision in the case of Malegaon Electricity Co P Ltd vs Commissioner or Income tax Bombay Therein after referring to Muthiah Chettiar case supra
Hedge J speaking for the Court stated Hence by not showing the income of his wife and minor children the assessee cannot be deemed to have failed to disclose fully and truly all material facts necessary for his assessment within the meaning of section 341a of the Act
 It is appropriate to take note of a later decision of this Court in Commissioner of Income tax Kerala vs Smt
PK Kochammu Amma Peroke That was of a two Judge Bench
Reliance was sought to be placed on Muthiah Chettiar s case supra
Dealing with the question of impo sition of penalty under section 27 1lc of the 1961 Act the Division Bench observed It is obvious that on this view the order imposing penalty on the assessee would have to be sustained but there is a decision of this Court in VDM RM M RM
Muthiah Cheuiar vs Commissioner of Income tax which is binding upon us and where we find that a different view has been taken by a Bench of three Judges of this Court
It was held in this case that even if there were any printed instructions in the form of the return requiring the assessee to disclose the income received by his wife and 1107 minor child from a firm of which the assessee was a partner
there was in the absence in the return of any head under which the income of the wife or minor child could be shown no obligation on the assessee to disclose this item of income and the assessee could not be deemed to have failed or omitted to disclose fully and truly all material facts necessary for his assessment within the meaning of 34la of the Indian Income Tax Act 1922
With the greatest respect to the learned Judges who decided this case
we do not think for reasons already discussed that this decision lays down the correct law on the subject and had it not been for the fact that since 1st April 1972 the form of the return prescribed by rule 12 has been amended and since then
there is a separate column provid ing that income arising to spouseminor child or any other person as referred to in Chapter V of the Act  should be shown separately under that column and consequently there is no longer any scope for arguing that the assessee is not bound to disclose such income in the return to be furnished by him we would have referred the present case to a larger Bench
But we do not propose to do so since the question has now become academic in view of the amendment in the form of the return car ried out with effect from 1st April 1972
we would therefore follow this decision in Muthian Chettiar s case which being a decision of three Judges of this Court is binding upon us        We agree with what has been stated in Kocharammu Amma s case and for the reasons indicated therein we do not pro pose to refer this case to a larger bench
Following the law as laid down in the two cases reported in and we dismiss the appeal
There would be no order for costs throughout
APJ Appeal dis missed


Summary:
The respondent was assessed to income tax for assessment year 1960 61 under section 233 of the Income Tax Act 1922 and for the assessment years 1961 62 and 1962 63 under section 1433 of the income Tax Act 1961
The validity of the notices issued under section 147a read with section 148 of the Act of 1961 in respect of these three assessment years was challenged by the respondent under Act 226
Though the notices did not disclose any material to justify their issue the Income Tax Officer in his return before the High Court stated that during the course of assessment for the year 1963 64 of the wife of the respondent she contended having received valu able assets from the respondent between 11th December 1955 and 28th October 1960 without adequate consideration in money or money s worth
The income from the said assets which should have been included in the return of the re spondent was not so included by him and that the capital gains arisen therefrom was also not included or disclosed by the respondent In his returns
A Learned Single Judge relying upon the decision of the Supreme Court in VDM RM
M RM
Mathiah Chettiar vs Commissioner of Income tax Madras quashed the notices
The appeal of the Revenue failed before the Divi sion Bench  Dismissing the appeal HELD By failure of the assessee to include the share income of his wife and minor child in his return it cannot be deemed that he has failed to disclose fully and truly all material facts necessary for the assessment within the meaning of section 341a of the Indian Income Tax Act
1107B VDM RM
M RM
Muthiah Chettiar vs Commissioner of Income tax Madras  Malegaon Electricity Co P Ltd vs 1103 Commissioner of Income tax Bombay and Commis sioner of Income tax Kerala vs Smt
PK Kochammu Amma Peroke  followed