1985 (7) TMI 167 - AT - Income Tax

Summary

Issues Involved:

1. Validity of reopening the assessment under section 147(b) of the Income-tax Act, 1961.
2. Time-barred reassessment under section 149(1)(b) of the Act.
3. Attribution of official use in determining the value of perquisites.

Issue-wise Detailed Analysis:

1. Validity of Reopening the Assessment under Section 147(b):

The assessee challenged the reopening of the assessment for the year 1974-75 under section 147(b) of the Income-tax Act, 1961, arguing that there was no new information available to justify the reopening. The assessee had consistently filed returns using the calendar year as the previous year, which was initially accepted by the AAC for the assessment years 1972-73 and 1973-74. However, the ITO reopened the assessment based on the Tribunal's orders for the earlier years, which were pending before the High Court. The Commissioner (Appeals) upheld the reopening, citing that a different view taken by a higher Tribunal on facts already on record can constitute information under section 147(b). The Tribunal agreed with the Commissioner (Appeals), stating that the information leading to the reopening should lead to the belief that the income had escaped assessment. The Tribunal found that the ITO's action, based on the Tribunal's orders for earlier years, was justified and did not constitute a mere change of opinion.

2. Time-barred Reassessment under Section 149(1)(b):

The assessee contended that the reassessment was time-barred under section 149(1)(b) as the notice under section 148 was issued on 7-1-1981, beyond the four-year limitation period from the close of the assessment year 1974-75. The Commissioner (Appeals) countered this by stating that the reassessment was based on the Tribunal's orders for the assessment years 1972-73 and 1973-74, and as per section 150(1), there was no time limit for issuing the notice under section 148. The Tribunal upheld this view, noting that section 150(1) and section 153(3), Explanation 2, govern different situations. Section 150(1) applies where there is a specific direction, while Explanation 2 to section 153(3) applies where there is no specific direction but a consequential change is required in a subsequent year. The Tribunal found that the reassessment was valid and not time-barred.

3. Attribution of Official Use in Determining the Value of Perquisites:

The assessee argued that one-third of the cost of accommodation, furniture, and utilities provided by the employer should be excluded from the perquisites as they were used for official purposes. The Tribunal dismissed this contention, following its earlier orders for the assessment years 1973-74 and 1974-75, which had rejected similar claims. The Tribunal found no merit in the assessee's argument and upheld the inclusion of the full value of the perquisites in the assessee's income.

Conclusion:

The Tribunal dismissed the appeal, upholding the validity of the reopening under section 147(b), the timeliness of the reassessment, and the inclusion of the full value of perquisites in the assessee's income. The Tribunal's decision was based on the consistent application of legal principles and precedents, ensuring that the reassessment was justified and in accordance with the law.