TMI Blog1979 (11) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... 148.43 on sales of Rs. 1,86,000. The ITO made the assessment on August 5, 1966, and computed the total income at Rs. 37,218. During the previous year relevant to the assessment year 1966-67, the assessee carried on the same business and during the course of assessment for that year, on enquiry from the Vigilance Bureau and the Boards of Experts, the ITO found that the actual cost of a centering machine came to Rs. 7,331, whereas the assessee claimed the same at Rs. 9,432. When Satish Chandra, partner, was confronted with that report he gave a note in writing on May 15, 1968, to the ITO stating that though his cost was much more, yet in view of the opinion of the experts he was willing to his income being worked out on that basis. Because of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, in the opinion of the Tribunal the report of experts and the aforesaid letter of Satish Chandra constituted information within the meaning of s. 147(b) and the initiation of proceedings thereunder was thus perfectly justified. However, coming to the quantum of the income assessed, the Tribunal found that in the first instance the AAC had not dealt with that aspect and, apart from that, the aforesaid admission made by Satish Chandra was relevant to the assessment year 1966-67 and for 1965-66 at best it could be treated as a piece of evidence and not as admission and hence the matter was remanded to the ITO to recompute the income. Now, at the instance of the assessee, the following question has been referred by the Tribunal for our opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year) ........" For the application of clause (b) the essential ingredient is that the ITO should have had some information in consequence of which he had reason to believe that income chargeable to tax had escaped assessment. What does information in s. 147(b) connote has come up for consideration before the Supreme Court and the various High Courts time out of number. In Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 (SC), when called upon to construe the corresponding provision as contained in s. 34(1)(b) of the 1922 Act, the Supreme Court held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetent legislature or a competent judicial or quasi-judicial authority. In the present case, the information which constituted the basis for the formation of belief of the ITO was the information as to a certain fact and that fact was that the cost of centering machine as claimed by the assessee was much more than the cost estimated by the Board of Experts and, further, when one of the partners of the assessee-firm was confronted with that report he agreed to the computation of income on the basis of that report. The question is whether this would constitute information. In our opinion there can be no doubt about it because these two facts had concrete existence and they influenced the determination of the point at issue. They are also rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was framed for the assessment year 1966-67 and certainly on the basis of that the ITO could reasonably form a belief that the income for the assessment year 1965-66 had escaped assessment. On this view of the matter, we are not prepared to agree with the assessee's counsel that the reopening of the assessment was as a result of a mere change of opinion. A feeble attempt was made by the counsel for the assessee to challenge the action of the ITO on the ground that the information did not relate to the assessment year under consideration, that is, 1965, and, as such, the formation of belief by the ITO was not justified. We are not impressed with this argument either. In support of this submission reliance was placed on a decision of the Bom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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