Para 2 of Boards Instruction No.584 dated 9th August 1973. - Income Tax - 1179/CBDT

INSTRUCTION NO. 1179/CBDT Dated : May 23, 1978 Section(s) Referred: 147 Statute: Income - Tax Act, 1961 Reference is invited to the Boards Instruction No.584 dated 9th August 1973 on the subject cited above. 2. In para 2 of the above instruction it was stated that action u/s.147(b) of the I.T.Act on the basis of an audit objection was likely to be challenged in a court of law on the ground that there has been no fresh information to justify the assumption of jurisdiction u/s.147(b). 3. The matter has now been settled by the Supreme court in the case of R.K.Malhotra , ITO vs. Kasturbhai Lalbhai(109 ITR 537). It has been held by the Supreme court that the Audit Department of the office of the comptroller and auditor General of India was the proper machinery to scrutinise the assessments of ITOs and point out the errors, if any , in law, and that the intimation so received by the ITO constituted information within the meaning of section. 147(b) in consequence of which the ITO could reopen the assessment. 4. These instructions would apply to the reopening of assessments under other direct tax laws also.