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TMI Blog1964 (2) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 3,553 was shown in the return as income from property on the basis of the rateable value fixed by the Municipal Corporation under the provisions of the Bombay Provincial Municipal Corporation Act, 1949. The Income-tax Officer accepted the amount of ₹ 3,553 as representing the annual value of the said immovable property and by an order of assessment dated 31st July, 1959, assessed the total income of the petitioner at ₹ 79,612 on the basis of income under the head "Income from property" being ₹ 3,553. The petitioner was thereafter assessed from year to year up to the assessment year 1962-63 and throughout these assessments the income from property was shown by the petitioner at ₹ 3,553 and was accepted as such by the Income-tax Officer. On 27th March, 1963, however, the Income-tax Officer issued a notice to the petitioner under section 148 of the Act stating that whereas he had reason to believe that the income of the petitioner chargeable to tax for the assessment year 1958-59 had escaped assessment within the meaning of section 147 he proposed to reassess the income for the said assessment year and requiring the petitioner to file a ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxes, Ahmedabad Municipal Corporation, that though according to the principles of rating, assessment of a property should be made by the Municipal Corporation on the basis of rent that a hypothetical tenant would pay if the property is let out from year to year, the Municipal Corporation did not strictly adhere to that principle in practice and in respect of properties occupied by owners, the Municipal Corporation had made concessional assessment as compared to rented properties. He also learnt from the Assessor and Collector of Municipal Taxes that in fixing the rateable value of properties occupied by owners, the Municipal Corporation did not observe any fixed ratio of concession in reference to the fair rental value. He pointed out that in consequence of this information which came into his possession from the Assessor and Collector of Municipal Taxes, he had reason to believe that the income of the petitioner from the said immovable property chargeable to tax had escaped assessment for the assessment year 1958-59 and he, consequently, issued the impugned notice. He contended that the conditions precedent to his jurisdiction to issue the impugned notice under section 147(b) wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 139(2). There is, therefore, no statutory obligation on the Income-tax Officer to give any intimation to the assessee either before issuing the notice or at the time of issuing notice as to what part of the income of the assessee has escaped assessment or what is the information in his possession in consequence of which he has reason to believe that such escapement has taken place. Of course ordinarily the Income-tax Officer does intimate to the assessee, and we think it a desirable practice which should in the absence of any special circumstances be followed by the department, what is the information in his possession in consequence of which he has reason to believe that a particular part of the income of the assessee has escaped assessment but there is no legal obligation on him to do so. Mr. Kaji then contended that in any event the Income-tax Officer was under an obligation to supply the aforesaid information to the petitioner after the issue of the notice and since he declined to do so, the notice was invalidated. It is not necessary for us to decide in this petition whether there was any obligation on the Income-tax Officer to supply the aforesaid information to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment. Both these conditions were disputed by the petitioner but the question that arises in this petition is in regard to the first condition. The contention of Mr. Kaji on behalf of the petitioner was that the first condition was not fulfilled in the present case since there was no information received by the Income-tax Officer in consequence of which he could be said to have reason to believe that any income of the petitioner chargeable to tax had escaped assessment. The information relied on by the Income-tax Officer was the intimation received by him from the Assessor and Collector of Municipal Taxes which we have already set out above. The question which, therefore, arises for determination is whether this intimation could be said to be information within the meaning of section 147(b). Mr. Kaji referred us to several decisions of various High Courts in connection with this question but it is not necessary to refer to them in detail since all of them lay down the same principle, namely, that before an Income-tax Officer could act under section 34(1)(b) which was the section in the Indian Income-tax Act, 1922, corresponding to the present section 147(b), he must receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. It is clear from this rule that the annual value of a building for the purposes of the said Act is based on the amount of the annual rent for which the building might reasonably be expected to be let from year to year and that is the same test which has been laid down in the Income-tax Act for determining the annual value of the property under the head, "Income from property". The Income-tax Officer, therefore, relied on the rateable value of the said immovable property fixed by the Municipal Corporation and accepted the same as correctly representing the annual value of the said immovable property for the purpose of assessment. In 1962, however, the Income-tax Officer came to learn that the rateable value of properties occupied by owners was not fixed by the Municipal Corporation on the basis set out in rule 7 but concessional assessment was made in respect of such properties. This information received by the Income-tax Officer clearly showed that the annual value of the said immovable property taken by the Income-tax Officer at the time of making the original assessment was not a correct annual value and that the correct annual value was higher than the figure adopte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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