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TMI Blog1981 (1) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... a coparcener of the HUF which was partitioned on Diwali 1969. The assessee was married on 2-5-1976. However, he filed the return of wealth for the assessment year 1971-72 in the status of a HUF and he was assessed as such. Similarly, he filed the return of wealth for the assessment years 1973-74 to 1975-76 and he was assessed accordingly as under : Assessment year Date of assessment Wealth assessed as returned Rs. 1973-74 11-2-1974 1,82,870 1974-75 15-1-1975 1,63,300 1975-76 25-11-1975 1,97,120 The WTO reopened the assessments on recording his reasons for his belief that the wealth of the assessee had escaped the assessments for the years under consideration vide his order dated 7-10-1977 which is reproduced hereinafter: "Assessee was married on 2-5-1976. Hence for this assessment year his correct status is individual. He has been wrongly assessed in the status of HUF and assessment was filed N.A. as the value of wealth was less than Rs. 2 lakhs. Issue notice under section 17(1)(b) as the assessee failed to file return in the status of individual. In view of the Supreme Court decision in the case of C. Krishna Prasad v. CIT [1974] 97 ITR 493 till his marriage, assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of hearing." 9. So, from the above, it is clear to us that the assessee is challenging the status taken by the authorities below as individual in place of HUF as well as the re-opening of the assessments. On the other hand, Shri K.S. Krishnamurthy, the learned departmental representative, contended that the lower authorities are justified in arriving at their respective conclusions and that the re-opening of the assessments are justified in view of the decision of the Supreme Court referred to above. He relies on the decision of the Supreme Court. 10. We have heard Shri K.S. Krishnamurthy, the learned departmental representative, and gone through the record before us. 11. We are of the opinion that the assessee is to fail. The reason is that the partition of the HUF in which the assessee was coparcener took place on Diwali 1969 and he was married on 2-5-1976 ; therefore, he was to be assessed in the status of an individual in view of the decision of the Supreme Court in the case of Krishna Prasad, where their Lordships held that the assessee remaining unmarried when the HUF was divided in which he was a coparcener, the assessee obtained the shares after partition, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V. Junnarkar, Accountant Member --- I have perused the order passed by my learned brother, the Judicial Member, in these appeals on 8-2-1980. But I do not agree with the views expressed by him as to the final disposal of the Wealth-tax Appeals Nos. 221 and 222 (Nag.) of 1978-79 for the assessment years 1974-75 and 1975-76 in this case, hence this dissenting order: 2. The facts of the case lie within a very narrow compass. The assessee was a coparcener of a HUF which partitioned on Diwali, 1969. He was a bachelor at that time. Later on, he got married on 2-5-1976. He, however, filed the returns of wealth in the status of HUF for the assessment years 1973-74 to 1975-76. The assessments were made in this case on the following dates in the status of HUF : Assessment year Date of assessment 1973-74 11-2-1974 1974-75 15-1-1975 1975-76 25-11-1975 Thereafter, the WTO recorded the following note in respect of each of the three assessment years on 7-10-1977 : "Assessee was married on 2-5-1976. Hence for this assessment year his correct status is individual. He has been wrongly assessed in the status of HUF and assessment was filed as N.A. as the value of wealth was less than Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1973-74 was made on 11-2-1974. The Supreme Court delivered the judgment in the case of Krishna Prasad on 12-11-1974. The exposition of the law on the subject by the Supreme Court in the case of Krishna Prasad would constitute 'information' within the meaning of section 17(1)(b). About this, there can be no two opinions. However, if authority is needed, we may refer to the Supreme Court decision in the case of Kalyanji Mavji & Co. v. CIT [1976] 102 ITR 287. The assessment for the year 1973-74 having been made prior to that, the WTO could have reopened the assessment for the year 1973-74 acting under section 17(1)(b). Further, on the basis of the Supreme Court decision in the case of Krishna Prasad, the assessee's status has to be taken as that of an individual. Therefore, I am in entire agreement with my learned brother that the assessee's appeal for the year 1973-74 has to be dismissed. 6. Coming to the question of the appeals for the years 1974-75 and 1975-76, these two original assessments were made by the WTO on 15-1-1975 and 25-11-1975. While framing these two assessments, the WTO was deemed to have taken into consideration the law as it stood then on the statute book as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of section 17(1)(b) for the assessment years 1974-75 and 1975-76 ? 2. Whether, in the facts and circumstances of the case, the AAC was justified in upholding the orders passed by the WTO by re-opening the assessments under section 17(1)(b) for the assessment years 1974-75 and 1975-76 ? and 3. Whether a decision of the Supreme Court or the High Court, whether preceding or succeeding, is 'information' for the purposes of section 17(1)(b) or only the succeeding decision ? THIRD MEMBER ORDER Per Shri T.D. Sugla, President --- These two appeals which have come up before me as Third Member for decision on a difference of opinion between the two learned members who heard the appeals originally, raise a very interesting question. Briefly stated, the relevant facts are that the assessee has been coparcener of the HUF which was partitioned on Diwali, 1969. At the time of partition and upon some time after the end of the previous years relevant for the assessment years under appeal, the assessee has been a bachelor. However, he filed his wealth-tax returns for the assessment years 1974-75 and 1975-76 in the status of HUF and the original assessments were completed on 15-1-1975 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion before the Supreme Court in the case of A. Raman. It was held that the expression 'information' must mean instruction or knowledge derived from an external source concerning facts or particulars, or as to law relating to matter bearing on the assessment. It was further held "that information must, it is true, have come into the possession of the ITO after the previous assessment but even if the information be such that it could have been obtained during the previous assessment from an investigation of the material on record, or the facts disclosed thereby, or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the ITO is not affected." 5. The learned counsel for the assessee, it may be stated, had no quarrel with the proposition in view of the aforesaid Supreme Court decision and other decisions which we will refer in the course of our order later ; that the Supreme Court's decision is an information and that if the WTO who completed the assessment originally, was not aware of the said decision even though pronounced earlier, could be treated as an information on the basis of which reopening would be justified. However, his cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the corresponding income-tax provisions. This is also evident from the Calcutta High Court's decision in the case of CIT v. Dinesh Chandra H. Shah [1971] 82 ITR 367 (SC), that even the realisation of the effect of the information later on may give to the ITO jurisdiction to proceed under clause (b) of this section. In fact, this is what has been held by the Supreme Court in the case of Kalyanji. 8. It is pertinent that this very issue recently came up for consideration before the Special Bench of the Supreme Court in the case of Newspaper Society and Justice Pathak, the learned Judge, dealt with the earlier decision of the Supreme Court in the case of Kalyanji in the following words: "... Reliance is placed on Kalyanji Mavji & Co. v. CIT [1976] 102 ITR 287 (SC), where a Bench of two learned judges of this court observed that a case where income had escaped assessment due to the 'oversight', inadvertence or mistake of the ITO must fall within section 34(1)(b) of the Indian I.T. Act, 1922. It appears to us, with respect, that the proposition is stated too widely and travels farther than the statute warrants insofar as it can be said to lay down that if, on reappraising the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it may be stated that the original assessments were completed by the WTO, Mr. X, who obviously was not aware of the Supreme Court's decision in the case of Krishna Prasad otherwise he would not have completed the assessments in the status of a HUF. He was succeeded by the WTO, Mr. Y, who has noticed the Supreme Court's decision and taking a clue therefrom has reopened the proceedings for the assessment year 1973-74 and for the years under appeal under section 17(1)(b). I thus, agree with the learned Judicial Member that the reopening of the assessment proceedings herein for the assessment years 1974-75 and 1975-76 is valid. 9. The points of difference stated are: 1. Whether, in the facts and circumstances of the case, the AAC was justified in holding that the Supreme Court's decision in the case of Krishna Prasad constituted valid 'information' for the purposes of section 17(1)(b) for the assessment years 1974-75 and 1975-76 ? 2. Whether, in the facts and circumstances of the case, the AAC was justified in upholding the orders passed by the WTO by reopening the assessment under section 17(1)(b) for the assessment years 1974-75 and 1975-76 ? 3. Whether a decision of the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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