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TMI Blog1950 (10) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessment order under the Excess Profits Tax Act was passed, the Income Tax assessment of the assessee was not completed and this assessment was completed by an order made on the March 24, 1947, and the assessment was made on Income Tax not on the basis of the income of ₹ 4,03,269 as has been done under the Excess Profits Tax Act, but was made on the basis of the income of ₹ 13,99,095. This increased assessment was made on the basis of Mr. Dastur's report. On the October 1, 1946, a notice was issued to the assessee under Section 15 of the excess Profits Tax Act. Its assessment was reopened and it was assessed to excess profits tax on the income of ₹ 13,99,095 in place of the original assessment on the income of ₹ 4,03,269. It is this order of re-assessment under Section 15 that is being challenged by the assessee. 3. The first challenge to this order is made on the ground that the Appellate Assistant Commissioner should not have made a reference of the assessee's case to Mr. Dastur who was not seized of the assessment, and it is contended that the dealing by Mr. Dastur of the assessee's case offends against the provisions of the Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e opinion formed by Mr. Dastur as to the merits of the assessee's case. As I shall presently point out, the Excess Profits Tax Officer drew the relevant and important information from the report of Mr. Dastur, but the ultimate assessment order which was passed was the order of the Excess Profits Tax Officer himself and not an order which was in any way influenced by the opinion formed by Mr. Dastur as to the merits of the case. Therefore, in our opinion, this decision which reliance has been placed does not in any way help the assessee. Further, there was nothing irregular in a reference having been made to Mr. Dastur to scrutinize the accounts of the assessee. 4. But the more serious contention that has been urged by Sir Jamshedji on behalf of the assessee is that there has not been a proper compliance with Section 15 of the Excess Profits Tax Act. Section 15 of the Excess Profits tax act is in terms similar to Section 34 of the Income Tax Act is it was before the recent amendment. Section 15, as Section 34, requires, as has been often pointed out, three conditions which have got to be fulfilled before the Excess Profits Tax Officer or the Income Tax Officer is empowered to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided to act under Section 34. That raises a very important question. Does Section 34 or Section 15 contemplate that if information could have come into the possession of the officer by due diligence, then although in fact he had no knowledge of that information for the purposes of these two sections it must be deemed that he had the information and he could not act on that information although in fact he came to know of it subsequently. In our opinion, the section does not and cannot bear that interpretation. Information means something that the mind has acquired. The mere fact of the presence of a book before a person does not give him the information or the contents of that book unless he opens the book and reads it. According to Sir Jamshedji, the mere fact that a book was placed before an officer is sufficient to give him information of its contents. That may be constructive notice of the contents, but Section 15 does not deal with constructive notice. Section 15 deals with actual notice, and in order that an officer should be incapacitated from acting under Section 34 or Section 15 he must have actual knowledge of certain facts, which knowledge he is again using for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the best judgment assessment. It is in connection with these facts that certain observations were made by Mr. Justice Pathak, who heard the case along with Mr. Justice Braund. At page 233 Mr. Justice Pathak says :- In our view, a suspicion or a closer study of the facts which were gone into by the Income Tax Officer at the time of the original assessment or even a fresh investigation by him or by his successor would not bring the case within the purview of the section. 8. It is clear from this observation that what the learned Judge was emphasising was a closer study of the same facts, facts which were already gone into by the Income Tax Office. It is true that in this case a closer study was made of the books of account by Mr. Dastur, but a close study of the books of account is not the same thing as a closer study of the facts which the books of account revealed. As I have pointed out earlier, there has been a definite finding by the Tribunal that the facts contained in Mr. Dastur's report are facts which were not present to the mind of the officer who first made the assessment. It is also pointed out that in this judgment Mr. Justice Pathak emphasises the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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