9911796707
TMI Blog1972 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment of the petitioner for the assessment year 1969-70 along with various papers and documents produced by and/or on behalf of the petitioner before the assessing Income-tax Officer was a document described as 'depreciation schedule' and a document described as 'interest and discount account'. (b) The said depreciation schedule contained various items of properties and/or assets as well as plant and machinery, both new and second-hand. One of such items in the said depreciation schedule was a second-hand centrifugal pump valued at Rs. 3,500. Development rebate was allowed in the original assessment also on this second-hand centrifugal pump and as such development rebate was allowed in excess of the amount allowable to the petitioner. (c) In the said details of interest and discount account various items of interest and discount alleged to have been paid by the petitioner were included. One of such items was interest charged on arrear of income-tax of a sum of Rs. 19,054.12. The amount of interest was not an allowable deduction in the assessment but the said sum was not added to the income of the petitioner in the original assessment. (d) The said documents were merely pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax v. A. Raman. and Co., the Supreme Court observed that the expression " information " in the context in which it occurred in section 147(b) of the Income-tax Act, 1961, must mean instruction or knowledge derived from an external source concerning facts or particulars, or as to law relating to a matter bearing on the assessment. At page 16 of the report the Supreme Court further observed that the jurisdiction of the Income-tax Officer to reassess income arose if he had in consequence of information in his possession reason to believe that income chargeable to tax had escaped assessment. That information must, it was true, come into the possession of the Income-tax Officer after the previous assessment, but even if the information be such that it could have been obtained during the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer was not affected. Therefore, it appears to me that the Supreme Court in the aforesaid decision decided the following points : (1) the instruction or knowledge must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a decision could have been arrived at did not mean that, at the time when the Income-tax Officer started proceedings under section 34(1)(b), he was not acting on information received from the decisions of the Tribunal and the High Court in the assessment proceedings of Bisesar House. The Supreme Court further held that that was not a case where the Income-tax Officer on his own initiative and on the material which was before him at the time of the first assessment had changed his opinion and come to a different conclusion. The Supreme Court found the correct conclusion was brought to the notice of the Income-tax Officer by the decision of the Tribunal and the High Court and that was information as a consequence of which he came to believe that the provisions of section 34(1)(b) were attracted. In those circumstances it was held that the Income-tax Officer had, therefore, jurisdiction to issue the notice under section 34(1)(b). In the case of Assistant Controller of Estate Duty v. Nawab Sir Mir Osman Ali Khan Bahadur, the Supreme Court held that the opinion of the Central Board of Revenue regarding the correct valuation of securities for the purpose of estate duty, expressed in an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's income from bank deposits as earned income and accepting her claim for deduction of salary paid to her daughter-in-law as expenditure. Thereafter, the revenue audit staff working under the Comptroller and Auditor-General of India, while scrutinising these assessments, brought to the notice of the department that the Income-tax Officer had wrongly treated the interest income as business income and had wrongly allowed the assessee's claim with regard to the salary paid to her daughter-in-law. Acting upon the scrutiny note of the Revenue Audit, the Inspecting Assistant Commissioner wrote to the Income-tax Officer to rectify the defects by reopening the assessment under section 147(b) of the Income-tax Act, 1961. Thereupon, the Income-tax Officer issued notices under section 147(b) and made reassessments. It was held by the Division Bench of the Delhi High Court that the scrutiny note of the Revenue Audit and the letter of the Inspecting Assistant Commissioner constituted " information " within the meaning of section 147(b) from an " external source " and the assessments were, therefore, valid. It was further held that the expression " external source " used by the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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