TMI Blog1962 (8) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... urns filed by his mother, Mrs. Komalavallithayar Ammal, as his guardian. The assessee, Rathinasabhapathy Mudaliar, the erstwhile karta of the family, was also assessed individually in respect of his income. In or about 1952, the Income- tax Officer realised that under section 16(3)(a) of the Act, the income of the minor son from the partnership should have been included in the total income of the father and that had not been done in the assessment of the assessee, the father. In that view, therefore, that the income of the father had escaped assessment, proceedings were started under section 34 of the Act after obtaining the prior sanction of the Commissioner. To a notice issued in this regard, the assessee while submitting a revised return of his income, including the share income of the minor son, objected to the validity of the proceedings, contending that it was not a case where any income had escaped assessment and that at best it could only be stated that his own income had been under-assessed. The Income-tax Officer however made fresh assessments under section 23(1) read with section 34. Against these orders of reassessment, appeals were taken to the Appellate Assistant Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction, it is necessary for the Income-tax Officer to establish that the omission was in the proceedings too. No doubt in the return forms filed by the assessee for all the years presently under consideration, certain relevant pages have been left blank. But the officer accepted these forms as sufficiently complete for the purposes of his assessments under section 23(1). He cannot thereafter be heard to complain that they did not contain the impugned data. It was up to him to have asked the assessee to have all the pages therein properly filled up and if on such completion, the minor's name had still not been properly disclosed therein, the department's case can be understood. On this reasoning, the Tribunal held that: There are no materials in the case for invoking section 34(1) for all the four years presently under appeal. All the supplementary assessments are consequently cancelled. On the application of the Commissioner of Income-tax, the following question stands referred to us: Whether the reassessments under section 34 of the assessment years 1948-49 to 1951-52 are valid? It would be noticed that the Tribunal has confined it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the father, the assessee. Either, therefore, the subsequent proceedings under section 34 constituted a mere change of opinion on the part of the assessing authority, in which event resort to section 34 would not, in the opinion of the Tribunal, be justified or the assessee had furnished all the relevant materials in one or the other of the connected proceedings, though not in his return, which led to the conclusion that there had been no failure on the part of the assessee, as required under section 34(1)(a). The question, therefore, resolves itself into examining the validity of the reasoning which led to the cancellation of the assessments. Both parts of section 34(1) deal with income, profits and gains chargeable to income-tax which have escaped assessment. Clause (a) deals with a case where the failure of the assessee to disclose fully and truly all material facts necessary for his assessment led to such escapement. Clause (b) deals with a case where there has been no such failure, but the Income-tax Officer has, in consequence of information in his possession, reason to believe that there has been such escapement. The distinguishing feature between the two clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 34(1)(b) is information that income, profits and gains chargeable to income-tax had escaped assessment in the assessment of the father. The information under the provision is with regard to the escapement of tax and not information as to the relationship of the parties or the fact that the minor had been admitted to the benefits of the partnership in which his father had a share. The full effect of the decision of the Supreme Court would be lost if the expression information is interpreted in the manner argued by the learned counsel for the assessee. Even inadvertence and error in the making of the assessment would bring the case within the operation of section 34(1)(b) and where the error is subsequently discovered, that amounts to information that a part of the income has escaped assessment. To emphasise the position, it is not the information, in the sense that the assessee is a partner in a firm and his minor son had been admitted to the benefits of the partnership, that is relevant for the purpose of section 34(1)(b), but the information that a certain part of the income which should have been assessed under the relevant provisions of the law, in the hands of the father, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a higher figure. Later, this mistake was discovered and the Income-tax Officer started proceedings under section 34. It was held that information for the purpose of section 34 need not be wholly extraneous to the record of the original assessment and that even a mistake apparent on the face of the order of assessment would constitute information. Whether the information was received from an extraneous source or the Income-tax Officer informed himself was immaterial for the purpose of section 34(1)(b). This decision is undoubtedly authority for the view that the information relevant to section 34(1)(b) may be derived from the record of the assessment itself and on the discovery that, in the original assessment, the Income-tax Officer had inadvertently omitted to include a part of the income. Mr. Swaminathan has referred us to Commissioner of Income-tax v. Mahomed Yusuf Ismail [1944] 12 I.T.R. 8. In that case, certain part of the income which was includible by reason of section 16(3)(b) had been omitted on a misconstruction of that section by the Income-tax Officer. Subsequently, the superior officer discovered the error and the Income-tax Officer proceeded to reopen the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state of the law. We are unable to derive any support from these two decisions which would help the decision in the present case. The facts of the case in the decision last referred to showed clearly that the Income-tax Officer examined the includibility of the son's share in the father's assessment and held against it. That was the reason why the learned judges took the view that there was no definite information and that a mere change of opinion as to the correct legal position would not be definite information within the meaning of the section. In the present case, there is no doubt whatsoever that while the Income-tax Officer was dealing with the original assessment of this assessee, the income derived by the minor son from the partnership was not before him. That there were other connected proceedings under section 25A or section 26A or individual assessment proceedings of the minor before him cannot be taken to establish that this part of the income of the minor son was considered by the Income-tax Officer in making the assessment upon the father. Factually, he did not so consider this income. It is not in dispute that the return of the father did not display this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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