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Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 1979 (8) TMI SC This

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1979 (8) TMI 1 - SC - Income Tax


  1. 2024 (10) TMI 264 - SC
  2. 2017 (3) TMI 1064 - SC
  3. 1991 (2) TMI 1 - SC
  4. 2025 (5) TMI 2056 - HC
  5. 2025 (3) TMI 307 - HC
  6. 2025 (2) TMI 875 - HC
  7. 2024 (8) TMI 56 - HC
  8. 2024 (7) TMI 1555 - HC
  9. 2024 (7) TMI 352 - HC
  10. 2024 (6) TMI 76 - HC
  11. 2024 (4) TMI 711 - HC
  12. 2024 (3) TMI 1209 - HC
  13. 2024 (3) TMI 40 - HC
  14. 2024 (2) TMI 1343 - HC
  15. 2024 (2) TMI 1522 - HC
  16. 2024 (2) TMI 1520 - HC
  17. 2024 (3) TMI 39 - HC
  18. 2024 (2) TMI 163 - HC
  19. 2024 (1) TMI 916 - HC
  20. 2023 (12) TMI 770 - HC
  21. 2023 (11) TMI 868 - HC
  22. 2023 (10) TMI 626 - HC
  23. 2023 (8) TMI 843 - HC
  24. 2023 (8) TMI 786 - HC
  25. 2023 (8) TMI 826 - HC
  26. 2023 (8) TMI 1079 - HC
  27. 2023 (8) TMI 1025 - HC
  28. 2023 (8) TMI 727 - HC
  29. 2023 (6) TMI 286 - HC
  30. 2023 (4) TMI 1305 - HC
  31. 2023 (3) TMI 1269 - HC
  32. 2023 (3) TMI 1331 - HC
  33. 2023 (3) TMI 565 - HC
  34. 2023 (3) TMI 987 - HC
  35. 2023 (2) TMI 1080 - HC
  36. 2023 (2) TMI 713 - HC
  37. 2023 (1) TMI 1472 - HC
  38. 2022 (11) TMI 549 - HC
  39. 2022 (11) TMI 386 - HC
  40. 2022 (9) TMI 1254 - HC
  41. 2022 (9) TMI 1039 - HC
  42. 2022 (11) TMI 893 - HC
  43. 2022 (8) TMI 269 - HC
  44. 2022 (9) TMI 359 - HC
  45. 2022 (5) TMI 1350 - HC
  46. 2022 (4) TMI 594 - HC
  47. 2022 (4) TMI 553 - HC
  48. 2022 (4) TMI 114 - HC
  49. 2022 (3) TMI 1039 - HC
  50. 2022 (2) TMI 928 - HC
  51. 2022 (2) TMI 347 - HC
  52. 2022 (1) TMI 1162 - HC
  53. 2022 (1) TMI 900 - HC
  54. 2022 (1) TMI 946 - HC
  55. 2022 (1) TMI 1392 - HC
  56. 2022 (1) TMI 896 - HC
  57. 2022 (2) TMI 298 - HC
  58. 2021 (12) TMI 1092 - HC
  59. 2021 (12) TMI 515 - HC
  60. 2022 (1) TMI 652 - HC
  61. 2021 (10) TMI 1266 - HC
  62. 2021 (10) TMI 71 - HC
  63. 2021 (12) TMI 1215 - HC
  64. 2021 (9) TMI 326 - HC
  65. 2021 (9) TMI 312 - HC
  66. 2021 (10) TMI 232 - HC
  67. 2021 (8) TMI 829 - HC
  68. 2021 (5) TMI 43 - HC
  69. 2021 (5) TMI 122 - HC
  70. 2021 (2) TMI 427 - HC
  71. 2021 (2) TMI 37 - HC
  72. 2020 (5) TMI 517 - HC
  73. 2020 (1) TMI 1318 - HC
  74. 2020 (2) TMI 266 - HC
  75. 2019 (10) TMI 1611 - HC
  76. 2019 (12) TMI 154 - HC
  77. 2019 (10) TMI 89 - HC
  78. 2020 (1) TMI 937 - HC
  79. 2019 (6) TMI 356 - HC
  80. 2019 (3) TMI 1763 - HC
  81. 2019 (3) TMI 82 - HC
  82. 2018 (11) TMI 145 - HC
  83. 2019 (2) TMI 1580 - HC
  84. 2018 (11) TMI 601 - HC
  85. 2018 (4) TMI 49 - HC
  86. 2018 (3) TMI 1587 - HC
  87. 2018 (2) TMI 307 - HC
  88. 2018 (1) TMI 146 - HC
  89. 2017 (9) TMI 326 - HC
  90. 2017 (8) TMI 1695 - HC
  91. 2017 (8) TMI 762 - HC
  92. 2017 (8) TMI 727 - HC
  93. 2017 (5) TMI 543 - HC
  94. 2016 (11) TMI 1562 - HC
  95. 2016 (10) TMI 324 - HC
  96. 2016 (9) TMI 1038 - HC
  97. 2016 (9) TMI 338 - HC
  98. 2016 (8) TMI 1511 - HC
  99. 2016 (8) TMI 1152 - HC
  100. 2016 (7) TMI 1537 - HC
  101. 2016 (7) TMI 1232 - HC
  102. 2016 (7) TMI 462 - HC
  103. 2016 (9) TMI 857 - HC
  104. 2016 (6) TMI 1025 - HC
  105. 2016 (6) TMI 703 - HC
  106. 2016 (6) TMI 727 - HC
  107. 2016 (6) TMI 301 - HC
  108. 2016 (3) TMI 1025 - HC
  109. 2016 (2) TMI 1155 - HC
  110. 2016 (1) TMI 1107 - HC
  111. 2016 (1) TMI 234 - HC
  112. 2015 (10) TMI 824 - HC
  113. 2015 (9) TMI 753 - HC
  114. 2015 (3) TMI 578 - HC
  115. 2015 (3) TMI 152 - HC
  116. 2015 (2) TMI 766 - HC
  117. 2015 (8) TMI 472 - HC
  118. 2014 (12) TMI 1114 - HC
  119. 2014 (8) TMI 7 - HC
  120. 2014 (6) TMI 724 - HC
  121. 2014 (6) TMI 188 - HC
  122. 2013 (11) TMI 581 - HC
  123. 2013 (8) TMI 1139 - HC
  124. 2014 (2) TMI 238 - HC
  125. 2013 (5) TMI 665 - HC
  126. 2013 (5) TMI 285 - HC
  127. 2013 (5) TMI 157 - HC
  128. 2013 (5) TMI 330 - HC
  129. 2013 (1) TMI 625 - HC
  130. 2013 (1) TMI 160 - HC
  131. 2012 (9) TMI 767 - HC
  132. 2012 (12) TMI 895 - HC
  133. 2013 (8) TMI 287 - HC
  134. 2013 (4) TMI 599 - HC
  135. 2012 (9) TMI 69 - HC
  136. 2012 (8) TMI 312 - HC
  137. 2013 (12) TMI 1250 - HC
  138. 2012 (4) TMI 455 - HC
  139. 2014 (5) TMI 414 - HC
  140. 2012 (2) TMI 407 - HC
  141. 2011 (12) TMI 229 - HC
  142. 2011 (11) TMI 350 - HC
  143. 2011 (9) TMI 146 - HC
  144. 2011 (9) TMI 731 - HC
  145. 2011 (5) TMI 621 - HC
  146. 2011 (3) TMI 701 - HC
  147. 2010 (12) TMI 61 - HC
  148. 2010 (4) TMI 974 - HC
  149. 2009 (9) TMI 27 - HC
  150. 2009 (5) TMI 24 - HC
  151. 2009 (2) TMI 834 - HC
  152. 2008 (10) TMI 658 - HC
  153. 2007 (10) TMI 11 - HC
  154. 2007 (8) TMI 316 - HC
  155. 2006 (9) TMI 157 - HC
  156. 2006 (6) TMI 88 - HC
  157. 2006 (3) TMI 123 - HC
  158. 2005 (12) TMI 87 - HC
  159. 2005 (9) TMI 55 - HC
  160. 2005 (1) TMI 634 - HC
  161. 2004 (12) TMI 52 - HC
  162. 2004 (12) TMI 674 - HC
  163. 2004 (10) TMI 66 - HC
  164. 2004 (9) TMI 26 - HC
  165. 2004 (8) TMI 90 - HC
  166. 2004 (4) TMI 44 - HC
  167. 2004 (2) TMI 8 - HC
  168. 2004 (1) TMI 94 - HC
  169. 2003 (9) TMI 55 - HC
  170. 2003 (5) TMI 47 - HC
  171. 2003 (4) TMI 93 - HC
  172. 2003 (3) TMI 89 - HC
  173. 2002 (4) TMI 37 - HC
  174. 2002 (2) TMI 67 - HC
  175. 2001 (8) TMI 98 - HC
  176. 2001 (6) TMI 52 - HC
  177. 2001 (3) TMI 14 - HC
  178. 2001 (1) TMI 8 - HC
  179. 2000 (10) TMI 956 - HC
  180. 2000 (8) TMI 45 - HC
  181. 2000 (1) TMI 10 - HC
  182. 1999 (11) TMI 15 - HC
  183. 1998 (12) TMI 51 - HC
  184. 1998 (10) TMI 41 - HC
  185. 1998 (5) TMI 20 - HC
  186. 1998 (2) TMI 70 - HC
  187. 1998 (2) TMI 24 - HC
  188. 1998 (1) TMI 16 - HC
  189. 1997 (12) TMI 627 - HC
  190. 1997 (12) TMI 27 - HC
  191. 1997 (11) TMI 10 - HC
  192. 1996 (7) TMI 10 - HC
  193. 1996 (3) TMI 505 - HC
  194. 1996 (2) TMI 118 - HC
  195. 1996 (1) TMI 111 - HC
  196. 1995 (3) TMI 69 - HC
  197. 1995 (2) TMI 429 - HC
  198. 1994 (10) TMI 33 - HC
  199. 1994 (3) TMI 104 - HC
  200. 1994 (1) TMI 34 - HC
  201. 1992 (3) TMI 21 - HC
  202. 1992 (2) TMI 21 - HC
  203. 1992 (1) TMI 49 - HC
  204. 1991 (10) TMI 28 - HC
  205. 1991 (6) TMI 20 - HC
  206. 1991 (1) TMI 100 - HC
  207. 1990 (6) TMI 3 - HC
  208. 1989 (4) TMI 18 - HC
  209. 1989 (2) TMI 369 - HC
  210. 1987 (7) TMI 5 - HC
  211. 1987 (4) TMI 453 - HC
  212. 1986 (7) TMI 40 - HC
  213. 1986 (3) TMI 38 - HC
  214. 1986 (2) TMI 21 - HC
  215. 1986 (1) TMI 44 - HC
  216. 1985 (9) TMI 15 - HC
  217. 1985 (1) TMI 27 - HC
  218. 1984 (12) TMI 32 - HC
  219. 1984 (9) TMI 11 - HC
  220. 1984 (5) TMI 17 - HC
  221. 1984 (3) TMI 13 - HC
  222. 1984 (1) TMI 282 - HC
  223. 1983 (12) TMI 34 - HC
  224. 1983 (11) TMI 10 - HC
  225. 1983 (9) TMI 46 - HC
  226. 1983 (7) TMI 29 - HC
  227. 1983 (5) TMI 19 - HC
  228. 1982 (4) TMI 9 - HC
  229. 1982 (3) TMI 14 - HC
  230. 1982 (2) TMI 26 - HC
  231. 1981 (10) TMI 22 - HC
  232. 1981 (8) TMI 66 - HC
  233. 1981 (4) TMI 59 - HC
  234. 1981 (2) TMI 66 - HC
  235. 1980 (6) TMI 2 - HC
  236. 1980 (3) TMI 44 - HC
  237. 1980 (2) TMI 27 - HC
  238. 1979 (11) TMI 83 - HC
  239. 2025 (4) TMI 795 - AT
  240. 2025 (3) TMI 648 - AT
  241. 2025 (4) TMI 899 - AT
  242. 2024 (12) TMI 1362 - AT
  243. 2024 (11) TMI 155 - AT
  244. 2024 (10) TMI 993 - AT
  245. 2024 (11) TMI 758 - AT
  246. 2024 (9) TMI 1189 - AT
  247. 2024 (8) TMI 339 - AT
  248. 2024 (6) TMI 562 - AT
  249. 2023 (10) TMI 1397 - AT
  250. 2023 (9) TMI 835 - AT
  251. 2023 (1) TMI 717 - AT
  252. 2022 (12) TMI 1564 - AT
  253. 2022 (11) TMI 1293 - AT
  254. 2022 (11) TMI 1250 - AT
  255. 2022 (10) TMI 1284 - AT
  256. 2022 (11) TMI 468 - AT
  257. 2022 (8) TMI 1067 - AT
  258. 2022 (6) TMI 636 - AT
  259. 2022 (6) TMI 597 - AT
  260. 2022 (6) TMI 1057 - AT
  261. 2022 (4) TMI 1183 - AT
  262. 2022 (4) TMI 803 - AT
  263. 2022 (4) TMI 1307 - AT
  264. 2022 (3) TMI 835 - AT
  265. 2022 (1) TMI 894 - AT
  266. 2021 (12) TMI 307 - AT
  267. 2021 (12) TMI 804 - AT
  268. 2021 (12) TMI 700 - AT
  269. 2021 (10) TMI 1018 - AT
  270. 2021 (11) TMI 406 - AT
  271. 2021 (10) TMI 500 - AT
  272. 2021 (10) TMI 826 - AT
  273. 2021 (8) TMI 281 - AT
  274. 2021 (7) TMI 882 - AT
  275. 2021 (6) TMI 499 - AT
  276. 2021 (3) TMI 1185 - AT
  277. 2021 (3) TMI 770 - AT
  278. 2021 (2) TMI 278 - AT
  279. 2021 (2) TMI 317 - AT
  280. 2021 (1) TMI 1018 - AT
  281. 2020 (10) TMI 557 - AT
  282. 2020 (12) TMI 435 - AT
  283. 2020 (10) TMI 873 - AT
  284. 2020 (8) TMI 749 - AT
  285. 2020 (2) TMI 941 - AT
  286. 2020 (4) TMI 287 - AT
  287. 2020 (1) TMI 860 - AT
  288. 2019 (12) TMI 1339 - AT
  289. 2019 (10) TMI 438 - AT
  290. 2019 (9) TMI 220 - AT
  291. 2019 (8) TMI 1454 - AT
  292. 2019 (7) TMI 1675 - AT
  293. 2019 (7) TMI 531 - AT
  294. 2019 (9) TMI 2 - AT
  295. 2019 (5) TMI 2002 - AT
  296. 2019 (8) TMI 980 - AT
  297. 2019 (3) TMI 535 - AT
  298. 2019 (1) TMI 1325 - AT
  299. 2018 (11) TMI 208 - AT
  300. 2018 (10) TMI 1974 - AT
  301. 2018 (12) TMI 968 - AT
  302. 2018 (9) TMI 1314 - AT
  303. 2018 (9) TMI 861 - AT
  304. 2018 (8) TMI 2012 - AT
  305. 2018 (7) TMI 583 - AT
  306. 2018 (9) TMI 525 - AT
  307. 2018 (2) TMI 1339 - AT
  308. 2018 (2) TMI 1092 - AT
  309. 2017 (12) TMI 1594 - AT
  310. 2018 (1) TMI 778 - AT
  311. 2017 (10) TMI 1529 - AT
  312. 2017 (9) TMI 1778 - AT
  313. 2017 (9) TMI 815 - AT
  314. 2017 (8) TMI 1711 - AT
  315. 2017 (11) TMI 111 - AT
  316. 2017 (6) TMI 285 - AT
  317. 2017 (5) TMI 780 - AT
  318. 2017 (5) TMI 196 - AT
  319. 2017 (2) TMI 1528 - AT
  320. 2017 (2) TMI 1107 - AT
  321. 2017 (2) TMI 1458 - AT
  322. 2017 (2) TMI 1011 - AT
  323. 2017 (1) TMI 509 - AT
  324. 2017 (2) TMI 38 - AT
  325. 2016 (11) TMI 537 - AT
  326. 2016 (11) TMI 116 - AT
  327. 2016 (9) TMI 1138 - AT
  328. 2016 (8) TMI 1550 - AT
  329. 2016 (7) TMI 201 - AT
  330. 2016 (6) TMI 1373 - AT
  331. 2016 (6) TMI 170 - AT
  332. 2016 (5) TMI 1476 - AT
  333. 2016 (6) TMI 52 - AT
  334. 2016 (4) TMI 812 - AT
  335. 2016 (5) TMI 546 - AT
  336. 2016 (4) TMI 591 - AT
  337. 2016 (4) TMI 350 - AT
  338. 2016 (2) TMI 1320 - AT
  339. 2015 (12) TMI 1795 - AT
  340. 2015 (12) TMI 34 - AT
  341. 2015 (11) TMI 1854 - AT
  342. 2015 (9) TMI 1427 - AT
  343. 2015 (9) TMI 18 - AT
  344. 2015 (8) TMI 365 - AT
  345. 2015 (6) TMI 176 - AT
  346. 2015 (6) TMI 56 - AT
  347. 2015 (3) TMI 756 - AT
  348. 2015 (3) TMI 878 - AT
  349. 2014 (10) TMI 660 - AT
  350. 2014 (11) TMI 67 - AT
  351. 2014 (9) TMI 1112 - AT
  352. 2014 (8) TMI 276 - AT
  353. 2014 (7) TMI 245 - AT
  354. 2014 (5) TMI 1058 - AT
  355. 2014 (5) TMI 317 - AT
  356. 2014 (3) TMI 1057 - AT
  357. 2014 (2) TMI 1246 - AT
  358. 2013 (9) TMI 201 - AT
  359. 2013 (11) TMI 1235 - AT
  360. 2013 (5) TMI 786 - AT
  361. 2015 (8) TMI 235 - AT
  362. 2013 (2) TMI 838 - AT
  363. 2013 (2) TMI 903 - AT
  364. 2013 (9) TMI 270 - AT
  365. 2013 (3) TMI 517 - AT
  366. 2013 (2) TMI 796 - AT
  367. 2013 (11) TMI 161 - AT
  368. 2012 (11) TMI 1299 - AT
  369. 2012 (11) TMI 310 - AT
  370. 2012 (7) TMI 93 - AT
  371. 2012 (5) TMI 643 - AT
  372. 2012 (4) TMI 151 - AT
  373. 2012 (11) TMI 898 - AT
  374. 2011 (12) TMI 388 - AT
  375. 2011 (10) TMI 498 - AT
  376. 2011 (10) TMI 588 - AT
  377. 2011 (7) TMI 728 - AT
  378. 2011 (7) TMI 1329 - AT
  379. 2011 (6) TMI 903 - AT
  380. 2011 (3) TMI 718 - AT
  381. 2011 (1) TMI 1462 - AT
  382. 2010 (12) TMI 53 - AT
  383. 2010 (10) TMI 864 - AT
  384. 2010 (9) TMI 1190 - AT
  385. 2010 (3) TMI 1104 - AT
  386. 2010 (2) TMI 946 - AT
  387. 2010 (1) TMI 1218 - AT
  388. 2009 (10) TMI 644 - AT
  389. 2008 (12) TMI 230 - AT
  390. 2008 (8) TMI 596 - AT
  391. 2007 (1) TMI 209 - AT
  392. 2006 (8) TMI 239 - AT
  393. 2006 (6) TMI 175 - AT
  394. 2006 (5) TMI 129 - AT
  395. 2006 (3) TMI 256 - AT
  396. 2005 (11) TMI 186 - AT
  397. 2005 (10) TMI 218 - AT
  398. 2005 (7) TMI 544 - AT
  399. 2005 (6) TMI 473 - AT
  400. 2004 (12) TMI 326 - AT
  401. 2004 (9) TMI 591 - AT
  402. 2004 (4) TMI 274 - AT
  403. 2003 (9) TMI 306 - AT
  404. 2003 (7) TMI 297 - AT
  405. 2002 (12) TMI 557 - AT
  406. 2002 (10) TMI 231 - AT
  407. 2002 (8) TMI 264 - AT
  408. 2002 (7) TMI 245 - AT
  409. 2002 (7) TMI 248 - AT
  410. 2002 (5) TMI 853 - AT
  411. 2001 (11) TMI 223 - AT
  412. 2001 (9) TMI 235 - AT
  413. 2001 (2) TMI 320 - AT
  414. 2000 (9) TMI 210 - AT
  415. 2000 (1) TMI 164 - AT
  416. 1999 (12) TMI 105 - AT
  417. 1999 (9) TMI 111 - AT
  418. 1999 (5) TMI 61 - AT
  419. 1998 (5) TMI 39 - AT
  420. 1998 (2) TMI 144 - AT
  421. 1997 (11) TMI 128 - AT
  422. 1997 (10) TMI 102 - AT
  423. 1997 (5) TMI 86 - AT
  424. 1997 (3) TMI 613 - AT
  425. 1996 (2) TMI 198 - AT
  426. 1995 (10) TMI 77 - AT
  427. 1995 (5) TMI 46 - AT
  428. 1995 (5) TMI 78 - AT
  429. 1995 (3) TMI 153 - AT
  430. 1994 (12) TMI 131 - AT
  431. 1994 (1) TMI 116 - AT
  432. 1993 (8) TMI 131 - AT
  433. 1993 (8) TMI 127 - AT
  434. 1993 (8) TMI 141 - AT
  435. 1993 (7) TMI 130 - AT
  436. 1993 (3) TMI 194 - AT
  437. 1992 (9) TMI 123 - AT
  438. 1992 (6) TMI 55 - AT
  439. 1992 (3) TMI 142 - AT
  440. 1991 (3) TMI 227 - AT
  441. 1987 (12) TMI 72 - AT
  442. 1985 (5) TMI 113 - AT
  443. 1983 (7) TMI 80 - AT
1. ISSUES PRESENTED and CONSIDERED

The core legal question considered by the Supreme Court was whether the view expressed by an internal audit party of the Income Tax Department on a point of law can be regarded as "information" within the meaning of Section 147(b) of the Income Tax Act, 1961, thereby justifying the reopening of assessments. Specifically, the Court examined if such an internal audit report, which opined on the proper head under which income should have been assessed, could constitute valid "information" enabling the Income Tax Officer to initiate reassessment proceedings under Section 147(b) for the assessment years 1960-61 to 1963-64.

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Whether the internal audit party's opinion on a point of law amounts to "information" under Section 147(b) of the Income Tax Act, 1961, justifying reopening of assessments.

Relevant legal framework and precedents: Section 147(b) permits reopening of an assessment if the Income Tax Officer has, in consequence of "information" in his possession, reason to believe that income chargeable to tax has escaped assessment. The term "information" was previously interpreted by this Court in Maharaj Kamal Singh v. Commissioner of Income-tax to include not only facts but also information as to the true state of law, including relevant judicial decisions. In Commissioner of Income-tax v. Roman and Company, "information" was defined as "instruction or knowledge derived from an external source concerning facts or particulars, or as to law, relating to a matter bearing on the assessment." These principles formed the foundation for the Court's analysis.

Court's interpretation and reasoning: The Court distinguished between information relating to facts and information relating to law. Facts have concrete existence and can influence assessment directly. Information as to law must emanate from a formal source competent to declare or create law, such as legislative enactments or judicial/quasi-judicial authorities. Opinions, interpretations, or views expressed by persons or bodies lacking such authority, including internal audit parties, do not constitute law. The Court emphasized that the internal audit organization functions primarily as an administrative or executive body, tasked with checking arithmetical accuracy and procedural compliance, not with judicial or quasi-judicial authority to declare law.

The Court examined the nature and scope of the internal audit party's functions, referencing the Internal Audit Manual and Section 16 of the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971. The audit's role is to ensure effective checks on revenue assessment and collection procedures, not to substitute or override the statutory duties of revenue authorities or to pronounce on legal questions binding on Income Tax Officers.

Key evidence and findings: The internal audit party had expressed the view that income from letting out conference halls and rooms should be assessed under "Income from property" rather than as "Income from business." The Income Tax Officer initially considered Sections 9 and 10 of the Income Tax Act during original assessments but later sought to reopen assessments based on the audit party's opinion. The Court found that the audit party's opinion was not a formal declaration of law but merely a communication of a viewpoint.

Application of law to facts: The Court held that only the part of the audit note which mentions the law that escaped the Income Tax Officer's notice constitutes "information" under Section 147(b). The opinion or interpretation of the audit party regarding the application of that law cannot be treated as information. The Income Tax Officer must independently evaluate the law and decide whether there is reason to believe income has escaped assessment. A mere change of opinion on material already considered does not justify reopening under Section 147(b).

Treatment of competing arguments: The Revenue contended that a discovery of error or oversight by the Income Tax Officer upon receipt of the audit report constitutes "information" under Section 147(b). The Court rejected this, clarifying that "information" must precede the reason to believe; the realization of an error is the reason to believe, not the information itself. The Court also addressed prior conflicting High Court decisions and this Court's own earlier rulings, concluding that the view that audit reports can be treated as information was erroneous.

Conclusions: The Court concluded that the opinion of an internal audit party on a point of law does not amount to "information" under Section 147(b) of the Income Tax Act, 1961. Consequently, reopening assessments solely on the basis of such an audit opinion is not legally justified.

Issue: The scope of "information" under Section 147(b) and the power of Income Tax Officer to reopen assessments on reconsideration of the same material.

Relevant legal framework and precedents: The Court referred to prior judgments including Maharaj Kamal Singh, Roman and Company, and Bankipur Club Ltd., which held that reopening requires fresh information and not merely a change of opinion on the same material. The Court also discussed Kalyanji Mavji and Co., where a broader interpretation was suggested but ultimately rejected as inconsistent with the statute.

Court's interpretation and reasoning: The Court held that a mere reappraisal or reconsideration of the same material already considered during the original assessment, leading to a different opinion, does not constitute "information" enabling reopening under Section 147(b). This principle preserves the finality of assessments and prevents abuse of the reassessment process.

Application of law to facts: Since the Income Tax Officer had considered Sections 9 and 10 during the original assessments, any subsequent change of view on their application was a change of opinion on the same material, insufficient to justify reopening.

Conclusions: The reopening of assessments cannot be based solely on a change of opinion by the Income Tax Officer on material already considered.

Issue: Whether audit reports from the Comptroller and Auditor-General or Revenue Audit constitute "information" under Section 147(b).

Relevant legal framework and precedents: The Court examined previous decisions including R.K. Malhotra v. Kasturbhai Lalbhai, Assistant Controller of Estate Duty v. Nawab Sir Mir Osman All Khan Bahadur, and others. It noted that the Comptroller and Auditor-General is empowered by statute to audit receipts and report on procedural adequacy, but does not have adjudicatory powers.

Court's interpretation and reasoning: The Court distinguished between formal declarations of law by competent authorities and audit notes or reports. While audit reports may point out errors or defects, they cannot be equated with authoritative pronouncements of law. The Court criticized the Delhi High Court's broader interpretation that audit notes constitute information but recognized that where audit reports reveal factual information (e.g., payments made to the assessee's own account), such facts constitute information.

Application of law to facts: The Court held that only factual information contained in audit reports may be treated as information under Section 147(b), not the audit party's opinions or interpretations of law.

Conclusions: Audit reports do not confer judicial or quasi-judicial authority on audit parties to declare law, and their opinions on legal questions do not amount to "information" under Section 147(b).

3. SIGNIFICANT HOLDINGS

"The opinion of an internal audit party of the Income Tax Department on a point of law cannot be regarded as 'information' within the meaning of Section 147(b) of the Income Tax Act, 1961."

"An error discovered on a reconsideration of the same material (and no more) does not give the Income Tax Officer the power to reopen an assessment under Section 147(b)."

"The Income Tax Officer must determine for himself the effect and consequence of the law mentioned in the audit note; the opinion rendered by the audit party in regard to the law cannot for the purpose of such belief add to or colour the significance of such law."

"The internal audit organisation performs administrative or executive functions and cannot be attributed the powers of judicial supervision over the quasi-judicial acts of Income-tax authorities."

"The realization by the Income Tax Officer that he has committed an error is not 'information' within the meaning of Section 147(b); rather, information is the antecedent which gives rise to the reason to believe."

The Court answered the referred question in the negative, holding that reopening of assessments under Section 147(b) on the basis of the internal audit party's opinion was not legally justified.

 

 

 

 

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