TMI Blog1971 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... a subsequent order dated May 6, 1968, the Income-tax Officer also made certain rectification of the assessment. The petitioner, however, took an appeal before the Appellate Assistant Commissioner against the assessment for the year 1964-65 who by his order dated June 24, 1968, gave certain deductions in the total income of the assessee for this year. Thereafter, the petitioner was served with five notices on March 25, 1969, issued by the respondent No. 1 proposing to reopen the assessment for all these years, i.e., from 1964-65 to 1968-69, as it was said that in consequence of information in the possession of the Income-tax Officer he had reason to believe that the income for all these years chargeable to tax had escaped assessment under section 147(b) of the Act. The Income-tax Officer also directed the petitioner to submit returns for each of the years. Then, after several correspondence the petitioner requested the Income-,tax Officer to treat the original returns for all these assessment years as returns filed in compliance with his notices. As the Income-tax Officer in spite of representations of the petitioner did not withdraw the notices, the petitioner has come up to this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 34(1)(b) of the old Act, on a question whether information came into possession of, the Income-tax Officer subsequent to the making of the original assessment leading to his belief that the income of the assessee chargeable to tax had escaped assessment, the Supreme Court held that two conditions must be satisfied before the Income-tax Officer could act under section 34(1)(b), namely, (a) that he must have information coming to his possession subsequent to the making of the original assessment, and (b) that information must lead to his belief that the income chargeable to tax escaped assessment or had been under-assessed or assessed at too low a rate or had been made the subject of excessive relief. In two later decisions of the Supreme Court, in Commissioner of Income-tax v. A. Raman Co. which was a case, under section 147(b) of the present Act and R. B. Bansilal Abirchand Firm v. Commissioner of Income-tax a substantially the same view was adopted. It will thus appear from the principle indicated above that the question of jurisdiction is involved in issuing impugned notices and clearly the High Court would interfere in exercising its writ jurisdiction if it is sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned with sections 147(b) and 148 of the Act under which the notices have been issued on the ground that, consequent to information coming into his possession, the Income-tax Officer has reasons to believe that the income chargeable to tax has escaped assessment for several successive periods mentioned above. The enunciation of law on a construction of these sections made by the Supreme Court cannot be disputed, but then each case has to be judged on its own facts to see whether the Income-tax Officer could be said to have any jurisdiction in issuing the impugned notices. Now, coming to the facts of the present case, the reasons recorded for issuing the impugned notices under section 147(b) by the Income-tax Officer are stated in paragraph 3 of the affidavit-in-opposition on behalf of the Income-tax Officer which are : " After the said, assessments for the said years 1964-65 to 1869 were completed, information came into my possession that the petitioner was in fact entitled to claim depreciation at 7% on the said blade making machinery. Furthermore, in the assessments of the sister concern of the petitioner, M/s. Indo-Swing, depreciation allowance on the said machinery has all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Basu, learned standing counsel for the respondents, however, has sought to repel this contention on an argument that the word "information" may mean knowledge even about the state of law. It need not be confined to factual information. The learned counsel has relied on the decision of the Supreme Court in support of this contention in Makaraj Kumar Kathal Singli's case', where, in meeting the argument of the learned counsel of the appellant that the context requires that the word "information" should receive a narrow construction limiting it to facts or factual materials as distinguished from information as to the true state of the law, the Supreme Court held that : " The word 'information' in section 34(1)(b) includes information as to the true and correct state of the law and so would cover information as to relevant judicial decisions. And, accordingly, rejected on the facts of that case the argument that the Income-tax Officer was not justified in treating the Privy Council decision in question as information within section 34(1)(b) of the Income-tax Act, 1922. This decision of the Supreme Court, as pointed out by the learned standing counsel, was followed in a Bench d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it be treated as an additional information, then also it may very well form a part of the information which, as stated, reasonably constituted the belief of the Income-tax Officer. Then again, the word "furthermore " does not occur in the reasons recorded. In any case, the reasons recorded by the Income-tax Officer may lack directness or precision but I am not prepared to say that the formation of belief of the Income-tax Officer was not at all dependent upon these materials from external source. Even then, the question arises as to whether these materials could be treated at all for purpose of assessment or-reassessment of the petitioner's income as information within the meaning of section 147(b) of the Act. In my, view, in order that the Income-tax Officer may have reason to believe that the income of the petitioner chargeable to tax has escaped assessment for any assessment year, the factual information that may come into his possession must have real relation with the income of the petitioner so that on the materials discovered leading to such information there is bound to be alteration or change in the original assessment of such income of the petitioner. But whereas, here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. B. Bansilal Abirchand Firm v. Commissioner of Income-tax. But where the law is clear and patent as in the instant case, subsequent discovery of a fact even from external sources showing that the assessment in question as made was erroneous in law cannot clothe the Income-tax Officer with jurisdiction to issue notice under section 148(1) of the Act for reassessment of the petitioner's income as provided under section 147(b) of the Act. In my opinion, on the facts and circumstances of the present case, mere information that in case of another company depreciation allowance of, 7% was given in respect of identical machineries as claimed by that company is no information coming into the possession of the Income-tax Officer in consequence of which he may have reason to believe that the petitioner's income escaped assessment for the disputed period. It must be held, therefore, that the impugned notices for recomputation of the depreciation allowance were issued by the Income-tax Officer concerned without jurisdiction. Mr. Mitter has raised a further point, viz., that in any event the materials disclosed may be treated as only information of a particular assessment made by one Mr. R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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