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TMI Blog2013 (4) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... instance of the assessee- "1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the report of the Inspector constituted "information" for the purposes of reopening of the assessment u/s 147 (b)? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the reopening of the assessment u/s 147 (b) was sustainable on the basis of the report of the Inspector?" At the instance of the Revenue- "3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the assessment u/s 143 (1) ceased to exist consequent upon the completion of the assessment u/s 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the meantime Income-tax Inspector submitted a report about the rental value of the accommodation provided to the petitioner as rent free accommodation by the company. On the basis of this report, Inspecting Assistant Commissioner reopened the assessment under Section 147 (b) of the Act and issued notice dated 04.02.1978 under Section 148 and by order dated 28.10.1978 reassessed the income of the assessee as Rs. 89,340/-. The assessee filed an appeal from the order dated 28.10.1978 which was dismissed by CIT (Appeals) by order dated 09.04.1979. The assessee further carried the matter in the second appeal, before the Tribunal. The Tribunal, by order dated 24.01.1981, found that the original assessment of the assessee under Section 143 (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. The basis of belief was the report of Income-tax Inspector. The question arise as to whether the report of Income-tax Inspector can be treated as a information regarding escapement of income? The "annual rental value" is determined under the provisions of U.P. Nagar Mahapalika Adhiniyam, 1959 for the purposes of the property tax. "Standard rent" is determined under the provisions of U.P. Urban Buildings (Regulation of letting, Rent and Eviction) Act, 1972, as the accommodation is situated in Kanpur. There was no provision authorizing the Income-tax Inspector to determine the "annual rental value". Income-tax Inspector had no jurisdiction to submit report regarding "annual rental value" of the accommodation of the assessee, for the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than that attributable to the assessing authorities, notwithstanding the chargeability of income to the tax, it would be a case of chargeable income escaping assessment and not a case of mere non-assessment of income tax. The proceedings for assessment in the present case have failed to result in a valid assessment by virtue of a legal lacuna viz. the fact of the Indian Finance Act of 1939 not having been extended to the relevant area for the relevant assessment year." Supreme Court again in Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Private Limited, (2008) 14 SCC 208, held as follows:- "So long as the ingredients of Section 147 are fulfilled, the assessing officer is free to initiate proceeding under Section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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