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TMI Blog1989 (4) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... it in the salvage farm and this was allowed by the Income-tax Officer. Subsequently, while making the assessment for the assessment year 1970-71, the Income-tax Officer came into possession of information that there was an underassessment of the total income of the assessee for the two years in question. Thereupon, the Income-tax Officer initiated action under section 147(b) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), and brought to tax the loss allowed under salvage farm, after holding that under section 10(27) of the Act, the income derived by the assessee from the salvage farm, poultry dairy farm and livestock unit carried on by the assessee was exempt from tax and that consequently the losses incurred in the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yanji Mavji and Co. v. CIT [1976] 102 ITR 287 (SC), held that the reopening of the assessment for the assessment years in question was justified and that on the other question of applicability or otherwise of section 10(27) of the Act, the matter had to be remitted to, the Appellate Assistant Commissioner for going into that question, giving liberty to the assessee to produce whatever evidence it wanted in support of that contention. At the instance of the assessee, under section 256(2) of the Act, the following common question of law for the two assessment years in question, has been referred to this court for its opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in his possession and he must also have reason to believe that income chargeable to tax has escaped assessment. No doubt such information must have come into the possession of the officer after the assessment. In this case, it is seen that the Income-tax Officer became aware of the disallowability of the losses claimed by the assessee for the assessment years in question while making the assessment for the assessment year 1970-71, when the loss claimed by the assessee in respect of the salvage farm was disallowed and that assessment order had also been accepted by the assessee. It is thus seen that information had been obtained in this case from the assessment records themselves while finalising the assessment for the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record or the facts disclosed thereby or from other enquiry or research into facts or law." The case of the assessee would fall within category (4) enumerated above, in that, the information had been obtained by the officer from the record of the assessment proceedings in connection with the assessment year 1970-71. We may now notice Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996, where the Supreme Court has pointed out at page 1004, referring to Kalyanji Mavji's case [1976] 102 ITR 287, that the categorisation in that decision under category (2) thereof, i.e., that income liable to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment for another assessment year. Referring to Salem Provident Fund Society Ltd. v. CIT [1961] 42 ITR 547 (Mad), to the effect that by looking into the records, the officer informs himself and that record would be a source of information, if that information led to the discovery of an escapement of assessment or underassessment, it was pointed out that it is not necessary that such information should be from an outside source, but that it may be found in the assessment records themselves. In this case, the assessment records, in the process of finalisation of the assessment for the assessment year 1970-71 gave information to the officer that losses claimed by the assessee in respect of the assessment years 1968-69 and 1969-70, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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