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Issues Involved:
1. Jurisdiction under Section 147(b) of the Income-tax Act, 1961. 2. Validity of valuation report as "information." 3. Constitutional validity of Sections 22 and 23 of the Income-tax Act, 1961. 4. Legislative competence of Parliament under Entry 82 of List I of the 7th Schedule of the Constitution of India. Issue-wise Detailed Analysis: 1. Jurisdiction under Section 147(b) of the Income-tax Act, 1961: The petitioners contended that the Income-tax Officer (Respondent No. 1) lacked jurisdiction to initiate action under Section 147(b) because he did not possess any new information derived from an external source after the initial assessments. The petitioners argued that the question of the letting value of the immovable property had already been settled by the Income-tax Appellate Tribunal and accepted by Respondent No. 1. The court referred to the Supreme Court's ruling in Commissioner of Income-tax v. A. Raman & Co., which established that the information must be derived from an external source and must come into possession after the previous assessment. The court found that the valuation report by the Executive Engineer, although prepared within the Income-tax Department, constituted new information and was relevant to the annual letting value, thus satisfying the conditions for reopening the assessment under Section 147(b). 2. Validity of Valuation Report as "Information": The petitioners argued that the valuation report could not be considered "information" as it was not from an external source and did not provide relevant details about the annual letting value. The court rejected this argument, stating that the valuation report, although prepared by an internal department, provided new and relevant information about the capital value of the property, which could influence the annual letting value. The court cited various legal precedents, including Assistant Controller of Estate Duty v. Nawab Sir Mir Osman Ali Khan Bahadur, to support that such reports could be considered valid information for reassessment purposes. 3. Constitutional Validity of Sections 22 and 23 of the Income-tax Act, 1961: The petitioners challenged the constitutional validity of Sections 22 and 23, arguing that the notional letting value of self-occupied property does not constitute income. The court referred to the definition of "income" under Section 2(24) of the Income-tax Act, 1961, and previous rulings, including D. M. Vakil v. Commissioner of Income-tax, which held that the annual value of property is a statutory income and can be taxed. The court found that Sections 22 and 23 were within the legislative competence of Parliament and did not violate the Constitution. 4. Legislative Competence of Parliament under Entry 82 of List I of the 7th Schedule of the Constitution of India: The petitioners argued that taxing the notional letting value of self-occupied property exceeded Parliament's legislative competence under Entry 82, which pertains to taxes on income. The court disagreed, citing the inclusive definition of "income" and the established legal principle that income need not be received in cash but can be a statutory income. The court upheld the validity of Sections 22 and 23, stating that they were within the scope of Parliament's legislative authority. Conclusion: The court dismissed the petitions, holding that the Income-tax Officer had jurisdiction under Section 147(b) based on the new information provided by the valuation report. The court also upheld the constitutional validity of Sections 22 and 23 of the Income-tax Act, 1961, and confirmed that Parliament had the legislative competence to tax the notional letting value of self-occupied property. The petitions were dismissed with costs, and the rules were discharged.
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