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Issues Involved:
1. The true meaning of the word "information" in section 147(b) of the Income-tax Act, 1961. 2. Whether the writ court can refuse to grant relief based on the petitioner's conduct, lack of injustice suffered, or the potential for resulting injustice if relief is granted. Issue-Wise Detailed Analysis: Issue 1: The Meaning of "Information" in Section 147(b) of the Income-tax Act, 1961 The court examined whether the notice under section 148 read with section 147(b) was issued with jurisdiction. It is essential for the Income-tax Officer (ITO) to possess "information" subsequent to the date of the assessment to issue such a notice. The ITO swore an affidavit stating that he received this information after the original assessment, substantiated by the fact that the petitioner had misrepresented the interest payment as being made to the government when it was actually credited to his provident fund account. The Revenue Audit authorities and the Ministry of Law later clarified the true interpretation of rule 7-E, indicating that the interest remained the petitioner's property and did not constitute expenditure. The court cited the Supreme Court's decision in Commissioner of Income-tax v. A. Raman & Co., which allows information to consist of facts or law. The ITO received information about the fact that the payment was made to the fund and the law that this payment did not constitute expenditure. The court also discussed the externality of the source of information, referencing the Gujarat High Court's decision in Kasturbhai Lalbhai v. R. K. Malhotra, which stated that the information must come from a competent authority. The court concluded that advice from the Revenue Audit and the Ministry of Law qualified as "information" under section 147(b). Issue 2: The Discretion of the Writ Court to Refuse Relief The court considered whether the conduct of the petitioner, the lack of suffered injustice, or the potential for resulting injustice could justify refusing relief. The petitioner had misrepresented the interest payment, leading to an unjust enrichment at the public's expense. The court emphasized that the issue of a writ or order under article 226 is discretionary and not automatic upon showing a legal infirmity in the impugned order. The court cited several precedents, including A. M. Allison v. B. L. Sen and Smt. Narayani Debi Khaitan v. State of Bihar, to support the principle that the High Court can refuse relief if the petitioner's conduct is questionable, if no injustice has been suffered, or if granting relief would result in injustice. The court found that all three conditions were met in this case. The petitioner had been unjustly enriched, and allowing him to retain the benefit would misplace the burden of taxation. Therefore, even if the court found that section 147(b) did not cover the proposed reassessment, it would still have the discretion to refuse relief based on these considerations. Conclusion: The court dismissed the writ petition with costs, concluding that the ITO had jurisdiction to issue the notice under section 148 read with section 147(b) of the Act, and that the petitioner's conduct and the potential for resulting injustice justified refusing relief.
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