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TMI Blog1983 (2) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the assessee while the second question was answered in the negative, subject to the following directions : ". . As we have already observed above, all these contentions have not been considered by the Tribunal and the Tribunal has only held that it has no jurisdiction to convert or alter the assessments made by the ITO under section 34(1)(a) to an assessment under section 34(1)(b) and maintaining as such. Subject to the consideration of all these contentions by the Tribunal which the Tribunal will have to consider, we answer the second question in the negative, i.e., in favour of the department and against the assessee. " 3. The observations of their Lordships as regards Question No. 2 are to the following effect : " As regards Question No. 2 the contention of the learned counsel for the petitioner was that the assessments in any case are saved in view of the provisions of section 147(b) of the Income-tax Act, 1961 as the information about the enhanced rent tantamounts to information within the meaning of section 147(b) of the Act. The Tribunal did not go into the question whether the material conditions required for notice under section 147(b) were fulfilled and negat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 147(b). All these circumstances have been mentioned in the judgment. Thus the judgment is confined to the conversion of notice under clause (b) of section 147 to clause (a) of section 147. The Calcutta High Court in the case of ITO v. Eastern Coal Co. Ltd. [1975] 101 ITR 477 held that there was no impediment in treating the notice issued under clause (a) of section 147 as one issued under clause (b) of that section provided the ingredients of section 147(b) were fulfilled. " 4. In respectful compliance of the above directions, the parties were heard, through their learned authorised representatives on 5-11-1982 and 28-1-1983 at length. 5. For ready reference, the background facts of the case as found out from paragraphs 3 and 4 of the order dated 4-5-1970 made by Bench 'A' of the Tribunal, Delhi Benches, on regular appeals by the assessee, stand reproduced hereunder : " The facts in the present case are that the assessee owned a building known as Radha Krishna Bhavan, Daryaganj, Delhi. The building was let out to American Embassy for some years and the assessee was charging rent of Rs. 3,212.50 per month. During the accounting year relevant to the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year). Explanation 1 : For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :---- (a) where income chargeable to tax has been under-assessed ; or (b) where such income has been assessed at too low a rate ; or (c) where such income has been made the subject of excessive relief, under this Act or under the Indian Income-tax Act, 1922 (11 of 1922) ; or (d) where excessive loss or depreciation allowance has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be the tenant's liability : Provided further that in the case of a building comprising one or more residential units the erection of which is begun and completed after the 1st day of April, 1961, the annual value as determined under this sub-section shall, for a period of three years from the date of completion of the building, be reduced by a sum equal to the aggregate of---- (i) in respect of any residential unit whose annual value as so determined, does not exceed six hundred rupees, by the amount of such annual value ; (ii) in respect of any residential unit whose annual value as so determined exceeds six hundred rupees, by an amount of six hundred rupees; so, however, that the income in respect of any residential unit is in no case a loss. (2) Where the property is in the occupation of the owner for the purposes of his own residence, the annual value shall first be determined as in sub-section (1) and further be reduced by one half of the amount so determined or one thousand eight hundred rupees, whichever is less : Provided that where the sum so arrived at exceeds ten per cent of the total income of the owner (the total income for this purpose being computed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one and defined income and the liability arises from the fact that the assessee is the owner of the property. The liability does not depend on the power of the owner to let the property since it also does not depend on the capacity of the owner to receive the bona fide annual value. For the above proposition C.J. George v. CIT [1973] 92 ITR 137 (Ker.) and D.M. Vakil v. CIT [1946] 14 ITR 298 (Bom.) are in point. That apart, in the case of Ganesh Chandra Khan v. ITO [1978] 111 ITR 934, their Lordships of the Calcutta High Court held that where the assessee filed return and included therein the income from his house property which was in occupation of tenant at standard rent of Rs. 484 per month and this house property was requisitioned by the Government and an award fixing rent-compensation at Rs. 2,118 was made, subsequent to the filing of the return by the assessee, there cannot be said to be any information since the annual value or the property has to be the sum, for which the property is to be deemed to be reasonably let out for, from year to year. Their Lordships further observed that in this case even if anything in excess of Rs. 484 was being received by the assessee, the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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