TMI Blog1996 (9) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal, Delhi Bench, New Delhi (hereinafter referred to as the Tribunal), has prepared one statement of case and referred the following two questions to this court for its opinion : " (i) Whether, on the facts and in the circumstances of the case, the Tribunal has erred in law in taking into consideration the further facts which had not been put up before the departmental authorities ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing commission at four per cent. as a deduction which is excessive and unreasonable within the meaning of section 40A(2) of the Income-tax Act, 1961, having regard to the various "clauses" mentioned in the said section ? " Question No. (i) is at the ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer, the provisions of section 40A(2) were clearly applicable and no commission could be allowed to the assessee merely on the basis of an agreement. Similarly, for the assessment year 1975-76, the original assessment was made on April 20, 1976, and the commission claimed at Rs. 58,138 had been allowed. The Income-tax Officer reopened the assessment for this year as well for similar reasons. The Income-tax Officer disallowed the claim regarding payment of commission in full in the reassessment proceedings. The Commissioner of Income-tax (Appeals) upheld the action of the Income-tax Officer in reopening the assessments. However, after considering the facts of the case, he held that a commission at the rate of three per cent. shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the question of reasonableness of the claim had come up before the Tribunal for the assessment year 1976-77 which was a year later. For that year, it was held that commission should be allowed at four per cent. having regard to the nature of services rendered. For these two years, the Tribunal decided to allow the same amount of commission as according to the Tribunal there was no difference of facts. For the assessment year 1976-77, the Tribunal at the instance of the Revenue referred the question of law similar/same to question No. (ii) in the present petition to this court for its opinion. The order of the Tribunal was upheld by the High Court and it was held that commission of four per cent. was reasonable and justified. The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed with the jurisdiction to act under section 147(b), i.e. : (1) the information must have come to his possession subsequent to the making of the original assessment ; and (2) he forms a belief on the basis of the information that income chargeable to tax has escaped assessment. Thus, "information" and "reason to believe" constitute the essential requisites and the basic foundation to set in motion the machinery of reassessment under section 147(b) of the Act. In this particular case, information came in possession of the Assessing Officer by way of decisions of the appellate authorities for the assessment years preceding and succeeding the years in question subsequent to the framing of the earlier assessments. On the basis of the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 34 were valid. The Bombay High Court in CIT v. A. J. Zaveri [1968] 68 ITR 594 held that a decision of the appellate authority on the same facts may constitute information within the meaning of section 34(1)(b) of the Indian Income tax Act, 1922. It was held as under : " 'Information' within the meaning of section 34(1)(b) of the Income-tax Act may consist of a different view taken of the facts on record by a higher Tribunal on appeal from the Income-tax Officer's decision resulting in the escapement of assessment, and a decision of the appellate authority on the same facts, as to which entity is really chargeable may constitute information within the meaning of section 34(1)(b). The Income-tax Officer had at the time of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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