TMI Blog1984 (1) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered dealers for sale of its products within the State as also outside the State through its agents as well as in the course of inter-State trade and commerce. The petitioner-firm's assessments for the years 1968-69, 1969-70 and 1970-71 were duly completed under the Act on 21st January, 1970, 16th July, 1970, and 7th December, 1972, respectively. However, on or about 14th February, 1973, the petitioner-firm was served with notices under section 18(1) of the Act with respect to all the aforesaid three assessment years calling upon it to appear in the office of the Superintendent of Commercial Taxes with its books of account, etc., for a fresh hearing. On its application, the petitioner-firm was separately furnished with the grounds for starting the reassessment proceedings-vide annexure 3-wherein it was stated that the petitioner-firm had been allowed certain deductions in the original assessment orders which were not legal or permissible under section 7(2)(b) of the Act and the proviso thereto. 3.. Aggrieved by the initiation of the reassessment proceedings aforesaid, the petitioner-firm preferred three different writ applications challenging the same for the relevant years w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner that the "information" envisaged under section 18(1) of the Act must necessarily spring from a source external to the original record. With illimitable candour, he conceded that in view of the binding precedent it was possible that in a particular case such "information" might well emanate from the original record itself. Equally it was not denied that such "information" may both be on a point of law as also on a point of fact. What was, however, forcefully contended was that a mere change of opinion or having second thoughts by the prescribed authority on the same set of facts and materials already available on the original record does not constitute "information" within the meaning of the statute to confer jurisdiction for reopening a completed assessment. 6.. Inevitably whilst examining the aforesaid rival contentions and the legal issues raised before the Full Bench one would have ordinarily adverted to the specific language of section 18 as also to the scheme of the Act and the principles of construction, etc. However, it seems unnecessary to dilate on those aspects because it is common ground that the questions raised before us are not res integra. Indeed there appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, the Income-tax Officer has ed assessment or any turnover of any in consequence of information in his such dealer or a dealer assessed under possession reason to believe that income sub-section (5) of section 16 has been chargeable to tax has escaped assessment under-assessed or assessed at a rate for any assessment year, lower than that which was correctly he may, subject to the provisions applicable or any deductions thereof sections 148 to 153, assess or refrom have been wrongly made, the assess such income or recompute the prescribed authority may, subject to loss or the depreciation allowance, as such rules as may be made by the the case may be, for the assessment State Government under this Act, year concerned (hereafter in sections and 148 to 153 referred to as the relevant (a)......................... assessment year)." (b)......................... serve on the dealer a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 16 and proceed to assess or reassess, the amount of tax due from the dealer in respect of such turnover; and the provisions of this Act shall, so far as may be, apply accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the precedent on the analogous statutes, it seems to follow that the relevant information referred to must come into the possession of the prescribed authority subsequent to the making of the original assessment. Manifestly any information which was consciously in the knowledge of the authority when the original assessment was made is not in the ken of the statute and is not to be made a ground for reopening an assessment afresh. Secondly, it seems to have been well-settled ever since Maharaj Kumar Kamal Singh's case AIR 1959 SC 257 that the word "information" includes within its sweep both information as to facts and as to law. Therein Gajendragadkar, J., speaking for the court had concluded as follows: ".....We would accordingly hold that the word 'information' in section 34(1)(b) includes information as to the true and correct state of the law and so would cover information as to relevant judicial decisions. If that be the true position, the argument that the Income-tax Officer was not justified in treating the Privy Council decision in question as information within section 34(1)(b) cannot be accepted." Thirdly, the authority concerned upon such "information" must be sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision Bench of the Kerala High Court in United Mercantile Co. Ltd. v. Commissioner of Income-tax, Kerala [1967] 64 ITR 218 for arriving at the conclusion that such "information" could stem from the record itself in the following terms: "'To inform' means 'to impart knowledge' and a detail available to the Income-tax Officer in the papers filed before him does not by its mere availability become an item of information. It is transmuted into an item of information in his possession only if, and only when, its existence is realised and its implications are recognised." 10.. Now it is the aforesaid enunciation of the law which stands unhesitatingly affirmed and sanctified by the Constitution Bench in Anandji Haridas and Co. (P.) Ltd.'s case [1968] 21 STC 326 (SC); AIR 1968 SC 565. Reference to paragraph 11 of the report makes it plain that the identical question posed here was specifically raised before their Lordships and it was in terms observed that the contention that similar information contemplated by section 11A of the C.P. and Berar Sales Tax Act should invariably be from an outside source and not something that could be gathered from the record was wholly untenable. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question was expressly posed, considered and answered by them in categorical terms and it is, therefore, vain to argue that the said observations declaratory of the law under article 141 should be by-passed or ignored on the ground of obiter dicta. In my view Anandji Haridas and Co. (P.) Ltd.'s case [1968] 21 STC 326 (SC); AIR 1968 SC 565 squarely governs the issue. 12.. As stands already noticed, there has been no divergence from Anandji Haridas and Co. (P.) Ltd.'s case [1968] 21 STC 326 (SC); AIR 1968 SC 565 subsequently. Indeed, the said decision inevitably has been followed by the High Courts and later Benches of the Supreme Court itself. In Kalyanji Mavji and Co. v. Commissioner of Income-tax, West Bengal-II AIR 1976 SC 203 the specific question was the scope, extent and ambit of section 34(1)(b) of the Income-tax Act, 1922 (which, as already noticed, is of identical import) and on a conspectus of authorities, distinct tests and principles were spelt out by the Bench and proposition (4) thereof was as follows: "(4) Where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record, or the facts disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment, but even if the information be such that it could have been obtained during the previous assessment from an investigation of the materials on the record or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected." It is manifest from the above that their Lordships herein have themselves sanctified reassessment based on information which could have been obtained from the previous assessment record or the facts disclosed thereby. In the face of these categorical observations it seems difficult to argue that A. Raman and Co.'s case AIR 1968 SC 49 in any way lays down that such information must be external to the original record. It is well-settled since the celebrated observation of Lord Halsbury in Guinn v. Leathem [1901] AC 495 that a case is an authority for what it actually decides and it cannot be quoted for a proposition that may seem to follow logically therefrom. Equally it has been observed in State of Orissa v. Sudhansu Sekhar Misra AIR 1968 SC 647 that it is not a profitable task to pick up a word or a phrase and attempt to build thereon. 14.. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not propose to launch on an exhaustive dissertation as to what may well fall within the ambit of such "information" from the record and what would be necessarily outside the same. It, however, seems apt and indeed necessary to notice that it follows from the binding precedents that a mere change of opinion or having second thoughts about it by the prescribed authority on the same set of facts and materials on the record does not constitute "information" for the purposes of the Act. This indeed seems to be so well-settled by all the judgments on the point that it would be wholly unnecessary to consider the question on principle. In this context it is apt to recall that even in Maharaj Kumar Kamal Singh's case AIR 1959 SC 257 the contention was raised on behalf of the revenue that it would be open to the Income-tax Officer to act under section 34(1)(b) of the Income-tax Act, 1922, even if he merely changed his mind without any information from an external source and came to the conclusion that in a particular case he had erroneously allowed an assessee's income to escape assessment. This contention, however, was left open because it did not pointedly arise in that case. However, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vocateGeneral, we must notice his ingenious contention that Indian Eastern Newspapers Society's case AIR 1979 SC 1960 has overruled proposition (2) in Kalyanji Mavji Co.'s case AIR 1976 SC 203 only with regard to a mistake committed and not with regard to an oversight or inadvertence. I deem it unnecessary here to go into the niceties of this finical distinction which obviously does not call for adjudication in this case. 19.. To finally conclude- (i) The answer to the question posed at the very outset is rendered in the negative and it is held that "information" envisaged by section 18(1) of the Act for purposes of reassessment need not necessarily spring from a source external or extraneous to the original record. (ii) That having second thoughts or a mere change of opinion by the prescribed authority on the same set of facts and materials on the record would not constitute "information" under section 18(1) of the Act for the purposes of reassessment. (iii) That with deference Satya Narainji Mills v. State of Bihar (C.W.J.C. No. 1400 of 1973 decided on 13th August, 1976-Patna High Court) does not lay down the law correctly and is hereby overruled. 20.. The meaningfu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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