The Income-tax Officer can initiate reassessment proceedings under Section 147 of the Income-tax Act, 1961, if he has reasonable grounds to believe that the escaped income exceeds Rs. 50,000, even if the ultimately determined escaped income is less than Rs. 50,000.

1. The Income-tax Appellate Tribunal (Chandigarh Bench) has referred the following questions of law for our opinion :

"1. Whether, on the facts and in the circumstances of the case, the initiation of reassessment proceedings under Section 147(a) was valid as the Income-tax Officer hat1 reasons to estimate the escaped income at Rs. 83,675?

2. If the answer to question (1) be in the affirmative then whether the assessment was validly made because the ultimate assessed income was Rs. 34,504 ?

3. Whether, on the facts and in the circumstances of the case, the reopening of the assessment was permissible under Section 34 of the old Act of 1922, in view of the finding that the estimate of total escaped income was more than Rs. 1 lakh ?"

2. The status of the assessee is of a Hindu undivided family. At the relevant time it consisted of Jairam Dass and his sons, Madan Lal, Sri Kishan, Rattan Lal, Mohan Lal and Om Parkash, along with the sons of Banwari Lal, brother of Jairam Dass, namely, Ram Sarup, Ram Bhagat and Ram Kumar. In the present reference we are only concerned with the assessment for the year 1947-48, In this year the assessee was assessed to tax on the income of Rs. 16,535 on December 22, 1949. In a litigation in respect of a firm styled as M/s. Jagan Nath Ram Sarup of Khanewal, in which Ram Sarup, a member of the, assessee-family, was a partner as representing the -Hindu undivided family along with one Jagan Nath, certain facts came to light. On examination of that information, the Income-tax Officer took the view that the income of the assessee for the assessment years 1946-47, 1947-48 and 1948-49 had escaped assessment. For the assessment year in question, namely, 1947-48, the escapement was estimated to be Rs. 1,87,545, Thereupon, the assessment for this year including the earlier years was reopened and for the year in question, the assessment was made by the Income-tax Officer of the escaped income at Rs. 1,74,080. The Income-tax Officer then added Rs. 1,57,542 to the income originally assessed. Similar additions were made in the remaining two years. Separate appeals were preferred to the Appellate Assistant Commissioner and the Appellate Assistant Commissioner annulled all the assessments made by the Income-tax Officer under Section 147 of the 1961 Act. The reasons which prevailed with the Appellate Assistant Commissioner may be best stated in his own words and are as under :

"The next objection of Shri Ganesan is that the right of the Income-tax Officer to reopen the assessments under the Income-tax Act, 1922, having lapsed after the expiry of eight years from the end of the relevant assessment years, the provisions of the new Act of 1961 authorising reopening of the assessments within the extended period of sixteen years, if the income which had escaped assessment was Rs. 50,000 or more, could not have been invoked in this case because there is no indication in Section 297(2)(d)(ii) to show that it has retrospective effect. Section 297 is a saving provision which does not confer a new right on the Income-tax Officer to reopen the assessment in a case where the right had been lost before the new Act came into force. For this view Shri Ganesan relies on the ruling of the Gujarat High Court in the case of Induprasad Devshanker Bhatt v. J. P. Jani, Income-tax Officer, Ahmedabad, [1965] 58 I.T.R. 559 (Guj.) and the ruling of the Punjab High Court in the case of S. Darshan Singh Chawla, Civil Writ No. 65-D of 1966--Unreported in Civil Writ No. 65-D of 1966. A certified copy of the judgment in the latter case has been filed before me. In the case of Induprasad Devshanker Bhatt, [1965] 58 I.T.R. 559 (Guj.) some profit on the sale of a plot of land which was more than Rs. 50,000 but less than Rs. 1 lakh had escaped assessment for the year 1947-48. With a view to assess this profit, the Income-tax Officer issued a notice under Section 148 on November 13, 1963, and followed it up by another notice dated January 16, 1964