1999 (7) TMI 6

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..... sed by the Income-tax Officer was not legal and valid?" From the record it transpires that for the assessment year 1975-76, the Assessing Officer assessing the income of the assessee under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), by an order dated November 15, 1976, determined the total income of the asses see at Rs. 4,660. On or about December 23, 1978, notice under section 148 of the Act was issued, which was served on the assessee on January 3, 1979. The Assessing Officer by order dated March 31, 1980, determined the total income at Rs. 91,844. It appears that the Assessing Officer was of the view that the income earned by the assessee by way of capital gain has escaped the assessment. He was o .....

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..... the attention of the Assessing Officer to the fact that the transfer of shares of Arvind Mills by the assessee would amount to relinquishing the right over the property and that would amount to transfer within the meaning of section 2(47) of the Act. Thus, the audit party merely invited the Income-tax Officer's attention to the legal position and had not expressed any legal opinion. It may be stated at this stage that the facts were stated in the return. Taking into consideration the binding instructions of the Commissioner, the audit party pointed out to the Assessing Officer the nature of the instructions. However, the same would not amount to information from external source and would not confer any jurisdiction on the Assessing Officer .....

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..... hargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned..." From the facts, it cannot be said that the assessee failed to disclose fully and truly all material facts necessary for assessment for that year and that the Income-tax Officer in consequence of information in his possession had reason to believe that income chargeable has escaped the assessment. The apex court in the case of Indian, and Eastern Newspaper Society v. CIT [1979] 119 ITR 996 pointed out what is information. The material was already with the Assessing Officer. The .....

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