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TMI Blog1964 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) a loan of Hali sicca Rs. 4,50,00,000 deposited with the Government of Hyderabad bearing interest at 1 1/4% ; (2) a Government of India loan of the face value of Rs. 25,00,000 bearing interest at 2 3/4% and (3) 3% Government of India loan, 1970-75, of the face value of Rs. 8,00,000. Two other step-sisters of the Nizam were also receiving like amounts from the trust fund ; but we are not concerned with their affairs now. The trustees were the accountable persons under the Act. They filed returns under the Estate Duty Act on the death of Ghousunnissa Begum. The Assistant Controller of Estate Duty, Hyderabad, by his order dated 31st March, 1958, assessed the value of the property liable to estate duty at Rs. 6,61,347 and an amount of Rs. 83,519.40 was assessed as the estate duty payable. The accountable persons appealed to the Central Board of Revenue without success, the assessment having been confirmed by an order of the Central-Board of Revenue, dated 6th August, 1959. Subsequently, section 59 was enacted giving powers to the Controller (which term included the Assistant Controller of Estate Duty) to reassess the property liable to duty under certain conditions which we wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m subsequent dates, are within its purview and it will apply to them, provided the notice contemplated is given within such eight years. " and further thus : " The question is not one of retrospective operation at all but a question of what the section says and how far the section, having come into force on the 30th March, 1948, extends by its own words. Had the section merely created a right in favour of the Income-tax Officer to issue a notice in respect of escaped or under-assessed income and not included a provision as to the period up to which, computed from the end of the assessment year concerned, the right could be exercised, a question might conceivably arise as to whether it was intended to be retrospective in operation, but in view of its clear terms, the section gives rise to no such question. " It is seen that under section 34 of the Income-tax Act, before the amendment made by Act 48 of 1948, the Income-tax Officer, had power to issue a notice in respect of escaped or under-assessed income, but he could do so within a period of four years, whereas under the section as amended, he could issue a notice under certain conditions within a period of 8 years. But, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Supreme Court pointed out that the power of rectification conferred by section 35(1) of the Income-tax Act might be exercised subject to two conditions : (1) that there was a mistake apparent from the record of the assessment, and (2) that the order of rectification was made within four years from the date of the assessment sought to be rectified. It was also pointed out that the said section, before the introduction of the new Subsection (5) on 1st April, 1952, could not be resorted to by the income-tax authorities for rectification of the assessments of the assessee, for there was no error apparent from the record of those assessments relating to that particular assessee. It was held by the Supreme Court thus : " The provision enacted by clause (5) is not procedural in character ; it affects vested rights of the assessee. It was further held that : " Clause (5) therefore confers an additional power of rectification upon the income-tax authorities and in the absence of compelling reasons we will not be justified in upholding the exercise of the power to assessments of firms which have been completed before the date on which the power was invested. " The said vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for that year had expired before the 1948 amendment had come into force. All this, however, is to no purpose. No such question arises here. The legislature had undoubtedly the power to make section 34 as amended in 1948 apply to an assessment for 1942-43 by giving it retrospective operation in spite of the time to issue a notice and to make an assessment fixed by the pre-existing law having expired before the amendment came into effect. The question really is one of interpretation, namely, whether the legislature had given such retrospective operation. Now it seems to me that section 31 of the 1953 Act clearly gives section 34 of the principal Act as amended in 1948 such retrospective operation. It plainly makes section 34 as so amended applicable to assessments for years ended before the amendment came into force. It does not say that section 34 as amended is to apply to assessments for these years Only when the time to issue the notice or make the assessment in respect of these years under the pre-existing law had not expired. It applies the amended section 34 ' to any assessment...... for any year ending before the 1st day of April, 1948, in any case where proceedings...... we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sess. We may appropriately refer to the case set out in the counter-affidavit of the Controller : " Para. 9 ...... In the instant case, the apparent undervaluation of the deceased's interest, which was pointed out by the appellate authority is sufficient information to constitute a reason to make this respondent reasonably believe that there was an escapement of assessment by reason of undervaluation, and justify the initiation of the reassessment proceedings under section 59 of the Act.." The appellate order is one of confirmation of assessment as already made. The observations relied on are as under : " In the calculation which I have made in paragraph 7 above, I have assumed the yield from the loan only at 1 1/4%. i.e., the interest has not been grossed up as in the calculation made by the Assistant Controller. According to the method adopted in paragraph 7, the value of the securities of the face value of Rs. 4.5 crores (O.S.) came to Rs. 3,06,83,760 I.G., i.e., 78%. The valuation adopted by the Assistant Controller comes to 52% as against the estimate of 40% to 50% made by the stock brokers. For the reasons already given by me in paragraph 7 above, I am of the opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the same facts and figures which were present to the mind of the Income-tax Officer at the time of the original assessment does not amount to discovery. The discovery must be the result of definite information, that is to say new information that has come to the knowledge of the Income-tax Officer. The Income-tax Officer cannot act under this section even though the taxpayer has escaped assessment if he is acting on information which was already in his possession and within his knowledge. Unless it can be said that there is fresh information which was not in his possession at the time when the original assessment was made, action under section 34 of the Income-tax Act is not justified. The mere fact that a different opinion on the same facts was taken by somebody else is not definite information leading to discovery on the part of the Income-tax Officer who was in possession of the same facts and entire facts at the time of the original assessment. " Ananthalakshmi Ammal v. Commissioner of Income-tax reiterated the same view. It was observed in that case thus : " That appellate decision with nothing more will not amount to definite information within the meaning of section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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