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TMI Blog1997 (2) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... e directions issued by the IAC of Income-tax are invalid and cannot stand in law ?'' 2. In the case of the assessee Sri S. Subramania Udayar, there are three appeals relating to IT assessment for the asst. yrs. 1972-73 to 1974-75, and two appeals relating to WT assessment for the years 1972-73 and 1973-74, while in the case of Sri S. Muthukumarasamy Udayar, there are only two appeals relating to WT assessments for the years 1972-73 and 1973-74. Both the assessees are Hindu undivided families (HUF) represented by their respective Karthas, Subramania Uyadar and Muthukumarasamy Udayar, who are brothers. They had moneys in a partnership firm of M/s Udayar Co., from which they derived share income, they being represented in the firm by thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifts of the other HUF, the same is required to be included in the net wealth. It is the inclusion of the interest income in the IT assessment and the amount of gift in the WT assessment of each of the assessees, which is the subject-matter of re -assessments. 4. The reassessments are challenged by the assessee on the ground that all the relevant facts including the relevant copies of accounts were already before the ITO/WTO, when the assessments were made originally and there was no new information, which came into the possession of the ITO/WTO, warranting a re-opening and that the reopening has been done only on the change of the opinion with regard to the law applicable to the facts already on record at the time of original assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection to reopen the assessment to be made afresh. Therefore, the Tribunal came to the conclusion that the reopening in the case of both the IT assessment and the WT assessment was not based upon correct information. Accordingly, the Tribunal agreed with the view by the first appellate authority. 7. Before us, the learned standing counsel appearing for the Department submitted that the memorandum of IAC, bearing No. EER 7/73-74, dt. 22nd Oct., 1974 merely pointed out only the law that has got to be applied in the present case. There is no interpretation of the law given by the IAC in that memorandum. Therefore, even according to the decision of the Supreme Court in (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996 (SC) cited supra, the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAC in a memorandum directed the assessing authorities to reopen the assessments and make fresh assessment. It is no doubt true that generally only the internal audit party would point out the mistake committed by the assessing authority and direct the assessing authorities to reopen the assessment for making fresh assessments, in accordance with law. In the present case, the IAC in his memorandum directed the assessing authorities to reopen the assessment. 9. The Tribunal had an opportunity of going through the memorandum issued by the IAC. On such perusal, the Tribunal found that the directions given by the IAC are nothing but interpretation of law applicable on points arising in this case and a direction was also given to reopen the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... du vs. CIT (1983) 144 ITR 686 (Mad) : TC 51R.1462. 13. In the case of Bireswar Sarkar vs. GTO (1997) 223 ITR 404 (Cal), the Calcutta High Court held that notice issued by the IAC instructing to reopen the assessment is not valid information, so as to enable the AO to reopen the assessment. 14. In the case of Arvind Kumar vs. ITO (1984) 41 CTR (MP) 16 : (1984) 146 ITR 437 (MP) : TC 51R.1463, the Madhya Pradesh High Court held that a letter from IAC pointing out omission would constitute information under s. 147(b) of the Act. 15. Inasmuch as the Tribunal being the highest fact-finding authority, after perusing the memorandum issued by the IAC, came to the conclusion that the IAC has interpreted the law and directed the assessing aut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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