TMI Blog1970 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... vable properties, one in Ahmedabad and the other in Bombay. During the relevant year of account, corresponding to the assessment year 1965-66, both the properties were occupied by the petitioner and, in the words of the Income-tax Officer, they were " self-occupied properties ". The petitioner, in his assessment for the assessment year 1965-66, claimed that at sum of Rs. 4 052, being the municipal taxes, be deducted in determining the annual value of the properties under section 23(2) and the Income-tax Officer allowed the claim and deducted the sum of Rs. 4,052 in arriving at the annual value of the properties under section 23(2) for the purpose of computing the income of the petitioner under the head " Income from house property". The order of assessment was made by the Income-tax Officer on 14th March, 1966. Nothing transpired thereafter for a period of about 31 years until 15th July, 1969, when the Income-tax Officer addressed a letter calling upon the petitioner to show cause why the amount of municipal taxes allowed as deduction should not be added back on the ground that it was wrongly allowed. The petitioner by his letter in reply dated 18th July, 1969, pointed out to the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The main question which, therefore, arises for consideration is whether there was any information in the possession of the Income-tax Officer in consequence of which he could be said to have reason to believe that the income of the petitioner had escaped assessment so as to attract the applicability of section 147(b). It is clear from the language of section 147(b) that the assessment or reassessment of the escaped income of an assessee under that sub-section can be made by the Income-tax Officer only if the Income-tax Officer has in consequence of information in his possession reason to believe that such income has escaped assessment. Two conditions must be satisfied before the Income-tax Officer can take action under section 147(b) : (i) the Income-tax Officer should receive information after the original assessment; and (ii) in consequence of such information he should reasonably believe that income chargeable to tax has escaped assessment. The fulfilment of both these conditions was disputed on behalf of the petitioner but the question that arises in this petition is only in regard to the first condition. The contention of Mr. Kaji, learned advocate appearing on behalf of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner or for the matter of that any person or authority, such communication would be information " derived from an external source. Mr. Kaji, on behalf of the petitioner, however, contended that instruction or knowledge as to the state of the law must be received from some judicial authority such as the Supreme Court or the High Court which is competent to declare the law and whose decisions have the effect of binding precedents ; if it is received from any other external source, it would not be " information " as to the state of the law within the meaning of section 147(b). Each of these two views canvassed before us represents an extreme contention and we do not think we can accept either of the two views as representing the correct interpretation of the word " information " in section 147(b). Now, it must be remembered that section 147 empowers the Income tax Officer to disturb the finality of an assessment already made and to assess or reassess the income of the assessee. Such an action is bound to result in considerable anxiety and harassment to the assessee and the legislature has, therefore, imposed certain conditions subject to which alone the Income-tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses from some expression of opinion by an income-tax lawyer at a seminar or by reason of an argument advanced by an income-tax lawyer in the case of another assessee that the view taken by him in regard to the interpretation of a section was wrong. Could it be said that he has received " information " so as to entitle him to take action under section 147(b) ? The view canvassed by the learned Advocate-General on behalf of the revenue, if taken to its logical end, would mean that, even in cases such as these, the Income-tax Officer would be entitled to reopen the assessment. The safeguard which is introduced by the legislature by insisting on the requirement that the Income-tax Officer must have reason to believe in consequence of some information received after the assessment would be rendered illusory. The dividing line between mere change of opinion on the part of the Income-tax Officer and " information " received from an external source would become blurred. If the opinion of any person as to the state of the law were to be regarded as " information " irrespective of the fact whether such person has competence or authority to pronounce upon the law, it would be easy to disguise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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