9911796707
TMI Blog1970 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... sment 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 Income-tax Officer that it was not competent to him to reopen the assessment of the petitioner under section 147 and that, in any event, the amount of municipal taxes was validly allowed as a deduction in computing the income from self-occupied properties. The Income-tax Officer, however, did not seem to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 petitioner, was that the first condition was not satisfied in the present case since the intimation received by the Income-tax Officer from the audit department did not constitute " information " within the meaning of section 147(b) and there was accordingly no "information " received by the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Officer can reopen an assessment which is already concluded. These conditions are to be found in clauses (a) and (b) of section 147. We are concerned in this petition only with clause (b) and we shall, therefore, confine our attention only to that clause. The condition precedent on the fulfilment of which alone the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 mere change of opinion on the part of the Income-tax Officer under the cover of opinion of some other person. Moreover, if opinion of any other person can be regarded as sufficient to warrant initiation of proceedings for reopening an assessment, it is difficult to imagine why change of opinion on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
