TMI Blog1996 (11) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal is justified in not proceeding to enter into the merits of the reassessment? " For the assessment year 1968-69, the original assessment was made on February 29, 1972. Later, on the basis of the information available from the audit that excessive relief was granted to the assessee in respect of soda ash project, that the income under section 41(1) was underassessed and that the disallowance under section 40(c)(iii) was not correctly computed, the assessment was reopened under section 147(b) of the Act. The Income-tax Officer passed the reassessment order on March 30, 1974, adding the following :--- (Rs.) (1) Disallowance in respect of Soda Ash Project 1,45,948 (2) Further deemed income under section 41(1) 16,99.967 (3) Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so questioned the enhancement of assessment made by the Appellate Assistant Commissioner at the request made by the Income-tax Officer, whereas the Revenue contested the deletions and disallowances set aside by the Appellate Assistant Commissioner. The Tribunal, after hearing the parties, considering the Revenue audit note in the light of the decision of the Supreme Court in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996, held that the information furnished by the internal audit party is leading to pointing out a question of law. Therefore, the Tribunal came to the conclusion that the reassessment under section 147(b) of the Act is bad in law. Accordingly, the reassessment made by the Income-tax Officer under section 147(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 69-70. Total income : Rs. 6,71,410 and loss Rs. 4,13,070, dates of assessment January 21, 1972, and January 31, 1972. In computing the business income of the company for the assessment years 1968-69 and 1969-70 the value of perquisites and amenities provided by the company to its directors/employees to the extent it exceeds one-fifth of their salary, has been disallowed and added to the income returned, as required under section 40(a)(v) of the Income-tax Act. It is seen from the statement prepared by the assessee and accepted by the Income-tax Officer for this purpose that evaluating the perquisites/amenities by way of provision of accommodation, car, servants, etc., the value as computed and adopted for the individual assessment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment years under consideration, under section 147(b) of the Act. According to learned standing counsel for the Department, the above audit notes do not relate to any matter of law, but only relate to a matter of fact. The Revenue audit party has pointed out the various figures furnished by the assessee, which were omitted to be considered by the Income-tax Officer. Therefore, according to learned standing counsel, the Revenue audit would not be governed by the latest ruling of the Supreme Court in the case of Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996. However, the Tribunal pointed out that a plain reading of the Revenue audit notes would go to show that the Income-tax Officer was directed to assess the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the legal position to be followed by the Income-tax Officer in the reassessment proceedings, then that would not constitute information under section 147(b) of the Act. The Supreme Court in the case of Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996, has held as follows : " The opinion of an internal audit party of the Income-tax Department on a point of law cannot be regarded as 'information' within the meaning of section 147(b) of the Income-tax Act, 1961, for the purpose of reopening an assessment. But although an audit party does not possess the power to pronounce on the law, it nevertheless may draw the attention of the Income-tax Officer to it. Law is one thing, and its communication another. If the distinction be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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