2001 (2) TMI 320 - AT - Income Tax

Summary

Issues:
Interpretation of whether the order of CIT under s. 263 constitutes 'information' for invoking provisions of s. 147(b).

Analysis:
The judgment involved a common issue in two appeals regarding whether the order of CIT under s. 263 constitutes 'information' for invoking provisions of s. 147(b). The assessee's counsel cited judgments from Bombay High Court and Madhya Pradesh High Court, while the Departmental Representative relied on the Supreme Court's decision in the case of Indian & Eastern Newspapers Society vs. CIT. The High Court decisions referred to were not directly on the point in issue. The case was refixed to give the assessee a fresh opportunity, where the distinction between the decision of AAC and CIT under s. 263 was discussed. The Karnataka High Court's judgment was cited as directly relevant to the issue at hand.

The Supreme Court's interpretation of the term 'information' in the context of s. 147(b) was discussed, emphasizing that knowledge as to law must have legal sanction with a binding nature. The decision of a quasi-judicial authority was considered to constitute 'information' under s. 147(b), as seen in the case of ALA Firm vs. CIT and Impaco Ltd. The judgment highlighted the importance of distinguishing between administrative and quasi-judicial authorities in determining whether their decisions constitute 'information.'

Further, the judgment delved into the criteria for an authority to be considered quasi-judicial, citing various cases and principles from Halsbury's Laws of England. The Supreme Court's decision in Dwarkanath vs. ITO was referenced to establish the quasi-judicial nature of the CIT's order under s. 263. The order of CIT was deemed to be a judicial order affecting the rights of the assessee, subject to appeal, and influencing tax liability. The distinction was made between executive directions and quasi-judicial functions in reopening assessments.

Ultimately, the issue was decided in favor of the Revenue, upholding the order of CIT(A) and dismissing the appeals. The judgment provided a detailed analysis of the legal principles and precedents to support the decision regarding the interpretation of 'information' under s. 147(b) in the context of the CIT's order under s. 263.