1976 (12) TMI 51 - HC - Income Tax

Issues:
1. Reopening of assessments under section 147(b) of the Income-tax Act, 1961.
2. Definition of "information" under section 147(b).
3. Validity of proceedings under section 147(b).
4. Interpretation of the term "information" in tax assessments.
5. Application of the decision in Anandji Hari Das & Co. (P.) Ltd. v. S. P. Kushare.
6. Analysis of Commissioner of Income-tax v. A. Raman Co.
7. Criteria for determining the applicability of section 147(b).
8. Consideration of internal audit party reports as "information."
9. Comparison of various court decisions on the definition of "information."

Detailed Analysis:
1. The case involved the reopening of assessments by the Income-tax Officer for the assessment years 1968-69 and 1969-70 under section 147(b) of the Income-tax Act, 1961 based on discrepancies in entertainment expenses claimed by the assessee.
2. The central issue revolved around the definition of "information" under section 147(b) and whether the internal audit party's note constituted valid information for reopening the assessments.
3. The Appellate Assistant Commissioner and the Income-tax Appellate Tribunal had previously canceled the reassessments, questioning the validity of the proceedings under section 147(b).
4. The court analyzed the term "information" extensively, citing precedents like Anandji Hari Das & Co. (P.) Ltd. v. S. P. Kushare and Commissioner of Income-tax v. A. Raman Co. to establish the criteria for determining what qualifies as "information" for tax assessments.
5. Reference was made to the Supreme Court's decision in Anandji Hari Das & Co. (P.) Ltd. v. S. P. Kushare, emphasizing that mere availability of details to the Income-tax Officer does not automatically constitute "information" unless its implications are recognized.
6. The court also discussed the observations in Commissioner of Income-tax v. A. Raman Co., highlighting that "information" must be derived from an external source concerning facts or law relevant to the assessment.
7. Criteria for determining the applicability of section 147(b) were laid down, including situations where income escaped assessment due to oversight, inadvertence, or external sources revealing new facts.
8. The court addressed the specific issue of whether reports from internal audit parties could be considered "information" for reopening assessments, citing conflicting decisions from various High Courts.
9. The judgment reconciled differing views on the definition of "information," emphasizing that knowledge need not always come from an external source and could be self-generated by the Income-tax Officer through further research or discovery of overlooked facts.
10. Ultimately, the court upheld the validity of the reassessments under section 147(b), rejecting the argument that it was a mere change of opinion by the Income-tax Officer and emphasizing the officer's lack of awareness of relevant legal limits during the original assessment.

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