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TMI Blog1955 (7) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... me which the assessee obtained from his forests that stood on the lands on which he paid land revenue to the Government. It should be convenient to refer to that income in the rest of this judgment as "forest income". Down to and inclusive of the assessment year 1940-41 both the assessee and the department treated this forest income as agricultural income within the meaning of section 2(1) of the Income-tax Act, exempt from income-tax. In the assessment year 1941-42 also the forest income was not taxed. The circumstances under which the income under this head was left untaxed that year were explained by the Income-tax Officer in his assessment order dated 28th February 1942, an extract of which was furnished by the Tribunal in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 34 taken by the Income-tax Officer for assessment of 1941-42 are valid in view of the reservation in the original assessment that he would take action under section 34 in due course. What the Income-tax Officer recorded in his assessment order dated 28th February, 1942, should really be sufficient to answer all the three questions in favour of the assessee. The Income-tax Officer stated: "In the course of the proceedings, it was found that the family derived kuttikanam from forests on lands assessed to land revenue, which amounted to ₹ 29,853-15-3 in the account year. This amount was not included in the return made by the assessee. The auditor raised a preliminary objection that the income from forests on lands assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taxed. He deferred levying tax on that item of the assessee's income till the assessee furnished the further particulars that the Income-tax Officer required. The Income-tax Officer decided that the forest income was assessable, and that it was not agricultural income entitled to exemption from tax. The quantification of the tax, however, was deferred. It was just a case of piecemeal assessment in the course of the proceedings in the assessment year 1941-42. Section 23 of the Act does not provide for such piecemeal assessment. It was true that a portion of the assessee's income had not been taxed, and in that sense it had escaped assessment. But that escape was fully known to the Income-tax Officer even before 28th February, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the law or not, because the term "discover" would include a measure merely of belief, and provided the belief is honest and such as a reasonable person would entertain there would be "discovery" within the meaning of this section..... There is no doubt that at least the Income-tax Officer definitely considered the Patna ruling to put an entirely new complexion on the point at issue. In these circumstances we would hold that the Income-tax Officer had definite information which justified the action taken by him." No doubt the Patna decision was rendered in April 1941. When that decision was brought to the notice of the Income-tax Officer is not clear from the material placed before us. There was nothing either in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er treated the Patna decision as the definite information on the basis of which he decided to issue notice under section 34 of the Act. The Tribunal referred to the honest belief on the part of the Income-tax Officer even before 28th February, 1942, that the forest income was taxable. In that case it would amount only to a change of opinion on the part of the Income-tax Officer. No doubt it was on a question of law, but none the less it was only a change of opinion, and that change of opinion was even before 28th February, 1942. It is well settled now that a mere change of opinion on the part of the Income-tax Officer is not definite information within the meaning of section 34 of the Act. In the course of the assessment proceedings for 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, whether, if the Patna decision constituted definite information as a consequence of which alone the Income-tax Officer discovered that the forest income had escaped assessment in the assessment years in question, the delay in issuing notice under section 34 till 4th May, 1943, made that information any the less definite information or the discovery any the less a consequence of that definite information. On the facts established in this case we have held that the Patna decision came to the notice of the Income-tax Officer only after he had reached the conclusion of his own that the forest income was assessable to tax, and that was in the course of the assessment proceedings for 1941-42. We therefore refrain from considering the question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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