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TMI Blog1988 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in holding that the lands were not agricultural lands and the sale proceeds therefrom were rightly chargeable to capital gains tax under section 45 of the Income-tax Act, 1961 ?" The assessee filed income-tax returns for the assessment years 1967-68, 1968-69 and 1969-70. In Part IV of the returns, he stated the following in respect of the sale of land of his ownership : "Out of the total agricultural land of 15 acres 10 gunthas bearing Survey No. 276/1, six acres of land were allowed to be converted for non agricultural purposes on May 3, 1966. The same was divided into 29 sub-plots. Eight plots out of the same were sold for Rs. 47,471 net as detailed separately. The Land Revenue authorities have sanctioned permission to change the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and truly all material facts consequent to which income could have been said to have escaped assessment. Accordingly, it found that the assessments could not have been reopened under section 147(a). The departmental representative, during the course of the hear before the Tribunal, invited its attention to a note of the Income-tax Department's internal audit party which, presumably, was found on the record. The note stated : "Since, after obtaining permission to convert the agricultural land into non-agricultural land, the assessee has divided the same into plots and sold the same, and for the reasons mentioned in para 2 above, the claim of the assessee for exemption from capital gains tax will not stand and the excess of the sale proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for the assessment years 1960-61 to 1963-64. In the course of auditing the income-tax records pertaining to the association, the internal audit party of the Incometax Department expressed the view that the money realised by the assessee on account of the occupation of its conference hall and rooms should not have been assessed as "income from business" but under the head "income from property". The Income-tax Officer treated the contents of the audit report as information in his possession for the purposes of section 147(b) and reassessed the income on that basis. The assessee challenged this action and the matter ultimately reached the Supreme Court. The Supreme Court held that when section 147(b) was read as referring to "information" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the effect and consequence of the law mentioned in the audit note and whether, in consequence of the law which had come to his notice, he could reasonably believe that income had escaped assessment. The. Income-tax Officer had considered the provisions of sections 9 and 10. Any different view taken by him thereafter on the application of these provisions would amount to a change of opinion on material already considered by him. An 'error' discovered on a reconsideration of the same material, in the Supreme Court's view, did not give the Income-tax Officer the power to reopen the assessment under section 147(b). Any observations by a Bench of two learned judges of the Supreme Court in the case of Kalyanji Mavji and Co. v. CIT [1976] 102 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts stated by the assessee in Part IV of the returns when he made the original assessment. He came to the conclusion that no capital gains tax was leviable upon the sale of the said land. It was not open to the Income-tax Officer to then hold in the reassessment proceedings upon the same facts that he had reason to believe that capital gains tax was leviable thereon, for it would be tantamount to an impermissible change of opinion. In our view, therefore, the audit note was, in the instant case, not information within the meaning of section 147(b) and it did not afford the Income-tax Officer good ground upon which he could reopen the assessee's assessments for the assessment years 1967-68 to 1969-70. It becomes, therefore, unnecessary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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