9911796707
TMI Blog1989 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... , requiring him to file a return as he had reason to believe that certain income chargeable to tax for the said year has escaped assessment within the meaning of section 147(b) of the Act. The reasons for the reopening of the said assessment were sought for, but before the same were communicated, this writ petition was filed challenging the validity of the said notice on the grounds, inter alia, that there was no information which could have induced a reasonable belief in the Income-tax Officer that income had escaped assessment in the hands of the petitioner for the assessment year 1983-84. Petitioner's affidavit : The relevant averments as culled out from the affidavit filed in support of the petition are that the assessee-petitioner had known Rashid Shapoor Chenai (R. S. Chenai) who died in the year 1963 leaving his widow, Freny Rashid Chenai (F. R. Chenai), and the only son, Shapoor Chenai. They were friends. Till the demise of R. S. Chenai, how ever, the petitioner was not looking after their taxation matters. His son, Shapoor Chenai, also died in 1965 leaving the widow of the late R. S. Chenai and the widow of Shapoor Chenai with a young son aged about 2 years. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer himself had no reason to believe that any income escaped assessment. The Income-tax Officer seems to think that because of the advocate-client relationship existing between the assessee and Mrs. F. R. Chenai, the sum paid must be regarded as income from profession. In the absence of any evidence to the effect that the real character of the gift was professional fees, it is not open to the Income-tax Officer to treat the same as income from profession. Affidavit-in-opposition : The relevant counter averments made in the affidavit in opposition, inter alia, are that during the accounting year relevant to the assessment year 1984-85, the petitioner was in receipt of an amount of Rs. 6 lakhs in cash from Nawab Mir Barkat Ali Khan (known as "Nizam") on June 9, 1983, alleged to have been taken as loan. The loan was on unusual terms, viz., (1) loan without interest; (2) hand loan at the request of the petitioner ; (3) loan to be repaid according to the convenience of the petitioner, and (4) no repayment of the loan by the petitioner for a period of six years from June 9, 1983, and thereafter to be repaid as per the petitioner's convenience. The loan was waived by the Ni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file a return, which he did on April 4, 1988, which is the same as the original return. There was escapement of income and in view of the information subsequent to the assessment originally made, action under section 147(b) of the Act was initiated and the assessee cannot call for the reasons for issue of the notice under section 148. Recording of reasons for initiating action for reassessment are only administrative in character. There is no requirement in law that there should be a disclosure of the material to the assessee at that stage. Thus, the petitioner is not entitled to be given a copy of the reasons recorded by the Income-tax Officer for issue of a notice under section 148 of the Act along with or prior to the issue of the notice. It is further averred that the letter of confirmation addressed to the Income-tax Officer by Mrs. F. R. Chenai was obtained by the petitioner himself and forwarded to the Income-tax, Officer with his covering letter. The then Income-tax Officer did not in fact consider whether the amount of Rs. 5 lakhs being the face value of the 7% capital investment bonds, should be treated as professional receipts and taxed as such. He accepted the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such allegations ought not to have been made without impleading Sri P. R. Rao as party and behind his back. It is also averred that whether such a receipt in question would constitute income or not in the hands of the petitioner and whether the Income-tax Officer fell into error in inferring that the receipt would constitute income in the hands of the petitioner, may be legally tenable or untenable, but definitely it will not oust the jurisdiction of the Income-tax Officer to issue the impugned notice and, therefore, the allegation that the reassessment proceedings which are initiated are said to be without jurisdiction and ab initio void is unsustainable. Further, "discovery", in the context of section 147 of the Act, does not mean a conclusion of certainty at the stage of notice. Reply affidavit : In the reply affidavit, the assessee-petitioner, adverting to the allegation that the respondent came to know about the relationship of advocate and client subsequently by way of an audit report and his own enquiries, averred that there cannot be any greater lie than stating that the Income-tax Officer who completed the assessment for the year 1983-84 was not aware that the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a who argued these matters in the Supreme Court for three days was paid a fee of Rs. 20,000. One must be crazy to think that, in respect of matters argued by such an eminent counsel like Mr. Palkhivala, to whom a fee of Rs. 20,000 was paid, I would have been paid Rs. 5 lakhs. I regret to state that the imagination of the respondent is running riot. Without even verification of facts, he made deliberately false statements in the counter filed. If there is a grain of truth in what is stated by the respondent in his counter, I call upon him to place that information before this Hon'ble Court." Regarding the allegation that Sri P. R. Rao, Commissioner of Income tax, was not made a party to the writ petition, it is stated "it was not necessary for me to make the Commissioner, P. R. Rao, a party to the writ petition, because I did not allege any mala fides against him." Contentions : The rival contentions may now be adverted to. Sri Dastur, learned counsel for the petitioner, submits that the previous Incometax Officer who passed the assessment order was aware of all that was stated to be the reasons for issuing the impugned notice ; the respondent has merely reproduced in the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in this case is: "Whether the impugned notice has been validly issued ?" The above question has two-fold aspects, viz., (1) What are the ingredients that have to be satisfied by the Income tax Officer before exercising the power under section 148(1) read with section 147(b) of the Act ? (2) Whether, in this case, the said ingredients have been brought out ? Case law : Before answering, the legal position with reference to the case law may now be adverted to. In CIT v. Thakar Das Bhargava [1960] 40 ITR 301 (SC), the assessee, an advocate, who had been originally reluctant, agreed to defend certain accused persons in a criminal trial, on condition that he would be provided with the sum of Rs. 40,000 for a public charitable trust, which he would create. When the trial was over, the assessee was paid a sum of Rs. 32,000 and he created a trust of that amount by executing a trust deed. The question was whether the sum of Rs. 32,000 was the assessee's professional income. The Supreme Court held (headnote) : ". . . that on the facts, the proper legal inference was that the sum of Rs. 32,000 paid to the assessee was his professional income at the time when it was paid to him and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Incometax Act, 1961, if the condition precedent to the exercise of the jurisdiction does not exist. The court may, in exercise of its powers, ascertain whether the Income-tax Officer had in his possession any information ; the court may also determine whether from the information the Income-tax Officer may have reason to believe that income chargeable to tax has escaped assessment. But the jurisdiction of the court extends no further. Whether, on the information in his possession, he should commence proceedings for assessment or reassessment, must be decided by the Income-tax Officer and not by the High Court. The Income-tax Officer alone is entrusted with the power to administer the Act : If he has information from which it may be said, prima facie, that he had reason to believe that income chargeable to tax had escaped assessment, it is not open to the High Court exercising powers under article 226 of the Constitution to set aside or vacate the notice for reassessment on a reappraisal of the evidence. In a petition under article 226 of the Constitution, the taxpayer may challenge the validity of a notice under section 147 of the Income-tax Act, 1961, on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtence or oversight or owing to the fact that no return has been submitted, but also where a return has been submitted but the Income-tax Officer erroneously failed to tax a part of the assessable income. In CIT v. Narsee Nagsee and Co. [1960] 40 ITR 307 (SC), interpreting the words 'profits escaping assessment' in section 14 of the Business Profits Tax Act, 1947, this court held that those words apply equally to cases where a notice was received by the assessee but resulted in no assessment, underassessment or excessive relief and to cases where, due to any reason, no notice was issued to the assessee and there was no assessment of his income. Kapur J., speaking for the majority of judges in that case, observed (at page 312 of the report) that it is well-settled that an income escapes assessment when the process of assessment has not been initiated as also in a case Where it has resulted in no assessment after completion of the process of assessment. The true scope of the expression 'escaped assessment' in section 11A came up for consideration before this court in Ghanshyamdas v. Regional Assistant CST [1963] 14 STC 976. This is what Subba Rao J. (as he then was), who delivered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first question arising in this case is whether the proceeding under section 34 is legally valid. It was contended by Mr. Narasaraju that the decision of the Privy Council could not be said to be definite information within the meaning of the section. It was said that the Income-tax Officer was fully aware of the circumstances of the case and the assessee had placed all the relevant facts before him, namely, that under the High Court's judgment the vendor was only entitled to one-third share of the income, pending the decision of the appeal before the Privy Council. In our opinion, there is no justification for this argument. It is not true to say that the assessee brought all the relevant facts before the Income-tax Officer. On the contrary he deliberately suppressed the fact that there was a compromise between himself and the plaintiffs under which he was entitled to the whole of the income from the mill. At any rate, the Privy Council's decision which determined the rights of the parties irrespective of the compromise did constitute definite information within the meaning of section 34 of the Income-tax Act. This view is borne out by the decision of this court in Maharaj Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxpayer would not be allowed to take advantage of an oversight or mistake committed by the taxing authority ; (3) where the information is derived from an external source of any kind. Such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of the original assessment; (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." Dealing with the scope of section 147(b) of the Act in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996, the Supreme Court held (headnote): "Held, that the opinion of the audit party on a point of law could not be regarded as 'information' enabling the Income-tax Officer to initiate reassessment proceedings under section 147(b). The Income-tax Officer had, when he made the original assessment, considered the provisions of sections 9 and 10 of the Indian Income-tax Act, 1922. Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t orders of the Income-tax Officer showed that the Income-tax Officer never applied his mind to the question and was blissfully unaware of the limit of Rs. 5,000 prescribed by section 37(2) of the Act in regard to 'expenditure in the nature of entertainment expenditure'. Therefore, the proceedings under section 147 (b) of the Act were legal and valid." In S. B. (House and Land) Pvt. Ltd. v. CIT [1979] 119 ITR 785, Sabyasachi Mukharji. J. (as he then was), speaking for a Division Bench of the Calcutta High Court, held (headnote): "...the first essential for an action under section 147(b) is that there should be belief that income has escaped assessment. The next requirement is that such belief must be formed in consequence of information. Such information must have reasonable nexus to the opinion that income has escaped assessment or has been underassessed. The information may be from an internal or external source. In the instant case, there was information that the original assessment might have been wrong and the Income-tax Officer re-examined the case and formed the belief that income had escaped assessment. The reassessment proceedings were, therefore, validly initiated." It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion that action can now be taken for reopening the assessment even if the information is wholly vague, indefinite, farfetched and remote. The reason for the formation of the belief must be held in good faith and should not be a mere pretence." A Division Bench of the Allahabad High Court in Smt. Sarla Devi V. CED [1976] 103 ITR 652, held (headnote) : ". . . it was apparent that, at the time of the original assessment, the examination was whether the deceased was the sole surviving coparcener, so that his entire share would pass by succession. Subsequently, the Assistant Controller found that for the purpose of determining the share of the deceased in the coparcenary properties under the Act, a partition is deemed to have taken place on the date of his death for estate duty purposes. He also found that on such a partition, the wife of the deceased would not have got a share, because there was no son. Under the Hindu law, the wife gets a share where there is a partition between the father and sons and not otherwise. Therefore, the share of the deceased was half. It was apparent that this legal aspect was not canvassed or examined before the Assistant Controller during the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im for deduction of the entire interest payment against business income alone. On the basis of this information, the assessment was reopened under section 147(b) and the amount of dividend income assessable was reduced by certain amounts while the business income was enhanced by similar amounts, so, however, that the total assessable income was not disturbed. The reassessment was ultimately confirmed by the Tribunal. On a reference to the High Court at the instance of the assessee : Held, that, in view of the finding of the Tribunal that the Income-tax Officer did not have knowledge when he completed the original assessment of the diversion of the borrowed money for investment in shares, the report of the audit party that a portion of the borrowed moneys had been utilised for investment in shares would constitute information coming to the possession of the officer subsequent to the original assessment in consequence of which he entertained the belief that the income had escaped assessment and hence the reassessment was justified." In Zoraster and Co. v. CIT [1987] 163 ITR 858, dealing with section 147(b) of the Act, the Rajasthan High Court held (headnote) : "Reassessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was, in the absence of subsequent overriding legislation concluded and the opinion of any other person, whether of the Central Board of Direct Taxes or of any other agency, was of no relevance. While the Income-tax Officer should not be influenced by the opinion of the Board or the audit party, he was entitled to act on the information communicated to him. The Income-tax Officer had to act in a quasi-judicial capacity and he must, therefore, act independently and on the strength of the information available to him. The mere fact that the circular contained, apart from the information, the opinion of the writer, would not by itself make the information invalid or unacceptable, provided it was separable from the opinion. Therefore, the reopening of the assessment under section 147(b) was valid." In Punjab Produce and Trading Co. Ltd. v. CIT [1986] 158 ITR 524, the Calcutta High Court held (headnote) : "Where the Income-tax Officer completed the original assessment by applying the provisions of sections 70 to 74 of the Income-tax Act, 1961, in a particular way and subsequently the Revenue audit party expressed contrary opinion regarding the interpretation of these provisions and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red vis-a-vis the earlier decisions of the Supreme Court relevant in this behalf and also in the light of the principle postulated under judgment per incuriam. In Anandji Haridas and Co.'s case [1968] 21 STC 326, a Bench of the Supreme Court comprising five learned judges, though it was concerned with section 11A of the Central Provinces and Berar Sales Tax Act, nevertheless, while dealing with the expression "escaped assessment", approved the principle and ratio laid down in Maharaj Kumar Kamal Singh's case [1959] 35 ITR 1 (SC), Sir Kameshwar Singh v. State of Bihar [1959] 37 ITR 388 (SC) and CIT v. Thakar Das [1960] 40 ITR 301 (SC). The relevant observation is as under (at page 335 of 21 STC) : "It is true that the said decisions, Maharaj Kumar Kamal Singh[1959] 35 ITR 1 ; Sir Kameshwar Singh [1959] 37 ITR 388 ; Narsee Nagsee and Co. [1960] 40 ITR 307 and others, were given with reference to either section 34(1) of the Income-tax Act or section 14 of the Business Profits Tax Act, but so far as the present enquiry is concerned, the said sections are in pari materia with section 11A of the Act. In construing the meaning of the expression 'escaped assessment' in section 11A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormity with the ratio laid down either in Maharaj Kumar Kamal Singh's case [1959] 35 ITR 1 (SC) or CIT v. A. Raman and Co. [1968] 67 ITR 11 (SC). In A. Raman and Co.'s case, it is laid down (headnote) : "The expression 'information' in the context in which it occurs (in section 147(b) of the Income-tax Act, 1961), must mean instruction or Knowledge derived from an external source concerning facts or particulars, or as to law relating to a matter bearing on the assessment. To commence the proceedings for reassessment it is not necessary that on the materials which came to the notice of the Income-tax Officer, the previous order of assessment was vitiated by some error of fact or law ... That information must, it is true, have come into the possession of the Income-tax Officer after the previous assessment but even if the information be such that it could have been obtained during the previous assessment from an investigation of the material on record, or the facts disclosed thereby, or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected." Hence, with the greatest deference, the view expressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, it may not have the sway of binding precedent. It should be glaring case, an obtrusive omission. No such situation presents itself here and we do not embark on the principle of judgment per incuriam." I am persuaded to accede to the submission of learned standing counsel for the Revenue that the judgments in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC), was rendered per incuriam inasmuch as an earlier decision by a larger Bench of the same court laid down a ratio at variance with the above case and if that decision had been brought to the notice of their Lordships, in all probability, it might have been followed or in case the court intended to differ, it was bound to refer the matter to a larger Bench. Likewise, the observation of the learned judges in the above case (at page 1004): "In our opinion, an error discovered on a reconsideration of the same material (and no more) does not give him that power. That was the view taken by this court in Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 (SC), CIT v. A. Raman and Co. [1968] 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or mistake committed by the Income-tax Officer ; (b) the information from external source includes discovery of new important matters or knowledge of fresh facts which were not present at the time of the original assessment : (c) the information may even be obtained from the record of the original assessment from an investigation of the same, or the facts disclosed thereby, or from other enquiry, or research into facts or law ; (d) the knowledge may be acquired by the Income-tax Officer himself on further research and discovery of facts or law which has previously passed unnoticed. This knowledge may be from the Income-tax Officer's attention being drawn to it by some other agency. Where he is not conscious of the true position in law or the true facts in existence, he may reopen the assessment after acquiring knowledge of the same ; (e) that the information of the internal audit party could form the basis for the belief that income has escaped assessment ; (f) the knowledge obtained as a result of research into law, which was not known previously, even though on account of inadvertence or oversight, could nevertheless be knowledge on the basis of which a belief about escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and of the settlor's only son in 1965, Sri Y. V. Anjaneyulu, the settlor's personal welfare; AND WHEREAS owing to the personal qualities of head and heart of the said Anjaneyulu and the abundance of love, care and attention that the said Anjaneyulu, his wife and children have bestowed on the settlor over the above period, the settlor has developed abounding affection and regard for the said Anjaneyulu, his wife and children : AND WHEREAS on account of her love and affection for the said Anjaneyulu, his wife and children and in appreciation of the personal qualities of the said Anjaneyulu, his wife and children and also owing in particular to the personal esteem, regard and veneration which the settlor has for the said Anjaneyulu in looking after the personal welfare of the settlor, the settlor is desirous of settling in the manner hereinafter appearing the 7% Capital Investment Bonds of the total value of Rs. 5,00,000 (Rupees five lakhs only) above referred to for the benefit of the said Anjaneyulu, his wife and children, who, for brevity's sake, are hereinafter referred to as 'THE SAID BENEFICIARIES' and more fully described in Schedule I given hereunder." Order sheet dated Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediately. Sd/ ...... 8-3-1988." Since there is a reference to the audit report in the said order sheet, the same may be referred to: "Review Audit by Income-tax Officer (I. A.) to the Inspecting Assistant Commissioner (Audit): (Shri Y. V. Anjaneyulu, Hyderabad-Assessment year 1983-84). The assessment for the assessment year 1983-84 of Shri Y. V. Anjaneyulu, then advocate, now High Court judge, was completed by the Income-tax Officer on November 5, 1983, on a total income of Rs. 2,48,258. This assessment was audited by the I. A. P. and R. A. P. also. However, there is a possibility of review audit by RAP since a major audit objection is being raised for the assessment year 1985-86. Similar issue as in 1985-86 is involved in this assessment as well. Shri Y. V. Anjaneyulu was representing since long time income-tax, wealth-tax and estate duty assessments of late Rasheed Shapoor Chenai and his family members. He was solely responsible for reduction of huge estate duty liability of both the late R. S. Chenai and his son's estate and similarly he has been representing the legal heirs of both father and son, viz., Mrs. Freny Rashid Chenai and Mrs. Kursheed Shapoor Chenai. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable 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." Before the process of adjudication is commenced, it may be observed that the writ petition has been hastily filed without even awaiting the reasons sought for, for issuing the impugned notice. After receipt of the impugned notice on March 15, 1988, the reasons were sought for by the petitioner by his communication dated April 2, 1988, and thereafter without waiting for a reasonable period for a reply, the writ petition has been filed on April 6, 1988. Analysis : The undisputed position is that the petitioner-assessee, while filing the return for the assessment year 1983-84, also filed a copy of the deed of trust called "Anju Family Trust" created by Mrs. F. R. Chenai on August 27, 1982, along with a letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated "the Income-tax Officer may be directed to take action under section 147(b) by citing the four Supreme Court cases referred to above, as information for forming a belief to reopen the assessment". But, underneath the same, the Income-tax Officer (1A) by his endorsement dated February 2, 1987, stated that as per the Supreme Court decision in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC), the audit party does not possess the power to pronounce on the law, but it may draw the attention of the Income-tax Officer regarding the interpretation of the correct law on the facts as pronounced by courts. Though there is no further material as to how this was communicated, the fact remains that it was clarified by the endorsement of the Income-tax Officer (1A) dated February 2, 1987, by which the effect of the last sentence of the review audit dated January 28, 1987, was shown as unwarranted and the correct position has been shown to be that "the attention of the Incometax Officer may be drawn in regard to the interpretation of the correct law on the facts pronounced by courts" and, therefore, it matters very little that the material as to how this was communicated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings for 1958-59. The word 'information' in section 34(1)(b) is of the widest amplitude and comprehends a variety of factors. Nevertheless, the power under section 34(1)(b), however wide it may be, is not plenary because the discretion of the Income-tax Officer is controlled by the words 'reason to believe'. Information may come from external sources or even from the materials already on record or may be derived from the discovery of new and important matters or fresh facts. Section 34(1)(b) would apply to the following categories of cases: (1) where the information is as to the true and correct state of the law derived from relevant judicial decisions ; (2) where in the original assessment the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income-tax Officer ; (3) where the information is derived from an external source of any kind : such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of original assessment ; and (4) where the information may be obtained even from the record of the original assessment from an investigation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not been made in consideration of the teaching imparted by him, and that, therefore, the payments were income arising from the vocation of the appellant; (iv) that as the payments made by L were income arising from vocation, they were not casual or non-recurring receipts and no question of exemption under section 4(3)(vii) of the Indian Income-tax Act arose. In order that a payment may be exempted under section 4(3)(vii) of the Indian Income-tax Act, as a casual and non-recurring receipt, it has to be shown that it did not arise from the exercise of a vocation." (3) K. George Thomas' case, wherein it is held : "The assessee carried on avocation of preaching against atheism. In the course of such vocation and for the purpose of the same, he received the amounts in question as donation for the furtherance of the objects of his vocation. The receipts arose to the assessee from the carrying on of the vocation by the assessee, and these were not casual and non-recurring. These were taxable ... There was a link between the activities of the assessee and the payments received by him and the link was close enough ... In our opinion, the High Court was right in answering the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1983-84. R. S. Chenai died in 1963 and his son died in 1965. On the basis of the information which the Income-tax Officer is said to be having, as stated in the order sheet, that there existed a relationship of "advocate and client" since a long time and nearer in point of time to the reduction in considerable amount in estate duty matters and, therefore, the mere fact that some fee has been received may not be, according to the Income-tax Officer, the full consideration which is otherwise said to be camouflaged in the form of trust. What we are concerned with in this writ petition which is limited in its scope, is whether the Income-tax Officer, in view of this information, has reason to believe that certain income has escaped assessment. The notice which has been given under section 148 is in the nature of a show cause as to why the amount of Rs. 5 lakhs created under the trust should not be subjected to reassessment, as the same has escaped assessment at the original assessment proceedings due to an erroneous view of the matter. It is needless to further adjudicate whether, even if the then Incometax Officer had stated something in regard to the said sum created under the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 74 of the Income-tax Act, 1961, in a particular way and subsequently the Revenue audit party expressed contrary opinion regarding the interpretation of these provisions and the Income-tax Officer initiated proceedings under section 147(b) on the basis of such interpretation : Held, that the reassessment proceedings had not been validly initiated." The above three cases are in line with the decisions laid down by the Supreme Court in Maharaj Kumar Kamal Singh's case [1959] 35 ITR 1, A. Raman and Co.'s case [1968] 67 ITR 11 and Kalyanji Mavji and Co.'s case [1976] 102 ITR 287, which had received the approval in Anandji Haridas and Co.'s case [1968] 21 STC 326. From the foregoing, it is evident that the Income-tax Officer has, on the basis of the information, reason to believe that the income escaped assessment for the assessment year in question and the reason for the said belief, in my judgment, has a rational nexus to the formation of the belief, and this cannot be said to be a mere pretence or extraneous to the purpose of section 147(b) and so, the notice cannot be held void. (See ITO v. Madnani Engineering Works Ltd. [1979] 118 ITR 1 (SC)). Impugned notice by the Income-tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner Sri P. R. Rao, ought not to have been made without impleading him as a party and behind his back. This will be a valid ground for dismissing the writ petition for not impleading the proper and necessary party." In the reply affidavit, the petitioner averred as under: "As regards the respondent not applying his own mind, I reiterate my plea already urged in the writ petition. In the nature of things, some matters cannot be proved especially if the Tax Officers want to conceal the correspondence placing them in confidential folders beyond the reach of the courts. I have valid reasons to think that the assessment was reopened by the respondent without application of his own mind and under the directions from the Commissioner. The respondent refers to my 'stature and status' and states that it does not behove me to cast aspersions on 'high dignitary of the Department' This high dignitary, whom the respondent is trying to defend, himself forgot my stature and status and used impolite language in section 263 proceedings for the assessment year 1983-84. In cancelling the order under section 263 of the Commissioner, the Tribunal vindicated my stand. The respondent would have don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scapement of income ; and it is not only relevant but has rational nexus with the said belief. The said belief, therefore, is formed independently and not dependent on any pressures and influences as alleged. Supplemental counter-affidavit-whether to be taken into consideration : The objection by the petitioner in respect of the Supplemental counter-affidavit filed on behalf of the Revenue by Sri Dayanand, Income-tax Officer, to the effect that this Income-tax Officer had nothing to do with the impugned notice and, therefore, without obtaining permission of this court under rule 12 of the Writ Proceeding Rules, could not be entertained and much less be accepted, need not detain us long inasmuch as the said counter need not be taken cognisance of, as nothing turns upon that ; also for the reason that this further counter has not been filed by the Incometax Officer who had initially filed the counter-affidavit in this case. Summing up: In sum: (a) The impugned notice has been issued by the Income-tax Officer after forming the belief independently on the basis of information, got subsequent to previous assessment, which has a rational nexus to the formation of the belief that incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming statutory deductions, the net income returned was Rs. 2,40,245. One of the items on which the petitioner claimed deduction was a sum of Rs. 13,000 representing interest on 7% capital investment bonds of the face value of Rs. 5,00,000 received from the trustees of "Anju Family Trust". The trust was created by one Mrs. F. R. Chenai, an old lady aged about 80 years, who is a close family friend and well-wisher of the petitioner and members of his family. She created the trust for the benefit of the petitioner, his wife, his son and four daughters. The corpus of the trust was 7% capital investment bonds of the value of Rs. 5,00,000. Mrs. K. S. Chenai, the widowed daughter-in-law of the settlor, and Mr. Ratnakar, the son of the petitioner, are the trustees. As per the trust deed, the petitioner is entitled to the income from the trust fund during his lifetime and after his demise, his wife would be entitled to the income. After the lifetime of the petitioner and his wife, the trust fund is to be divided into five equal shares and the trustees are required to hand over and deliver one equal part of the trust fund to each of the five children of the petitioner. Along with the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abundant goodwill and affection she had towards the petitioner, who was almost like a son to her, and the other members of his family, she insisted upon creating the trust. According to the petitioner, late Rashid Shapoor Chenai, the husband of the settlor, and he were great personal friends but during the lifetime of late Rashid Shapoor Chenai, he did not look after the matters relating to their estate. It was only after the death of Chenai's son in 1965, that he had to look after the welfare of the old lady and her daughter-in-law and the grandchild. The impugned notice was issued without application of mind. It is also alleged by the petitioner that he understands reliably and believes it to be true that under the specific direction of Sri P. R. Rao, the Commissioner of Income-tax, the assessment has been reopened. The impugned notice was the result of the "pressure reportedly brought upon the respondent by the Commissioner of Income-tax". The Income-tax Officer who originally completed the assessment did not think, on consideration of the facts, that any part of the gift was taxable income and the proposed action of the respondent is nothing but a mere change of opinion. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions and the circumstances that gave rise to the execution of the trust by Chenai's family. The respondent came to know through the information subsequently obtained by him "by way of audit report and his own enquiries" that the whole transaction was the result of professional services rendered by the petitioner to Chenai's family. Denying the allegations that the impugned notice was the result of non-application of mind and pressure applied by the Commissioner of Income-tax, the respondent pleaded in the counter-affidavit that "there is no record containing the correspondence that passed between Sri P. R. Rao, the Commissioner of Income-tax, on the one hand, and myself and my predecessor, on the other". A reply affidavit was filed by the petitioner on April 213, 1988 emphatically denying the allegations that the previous Income-tax Officer who completed the assessment for the year 1983-84 was not aware of the fact that the petitioner was the advocate for the Chenai family. The previous Income-tax Officer, Sri Waheed, completed three assessments of the petitioner under section 143(3) and the Income-tax Officer scrutinised the returns and the statements filed along with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial house, named Shapoor House, was transferred by Mrs. Chenai in favour of her grandson "without attracting capital gains tax, possible estate duty (as she was aged about 78 years) and also gift-tax". Certain new grounds also are mentioned in this affidavit alleging that the worthy tax planning resorted to by the Chenai family was because of the advice rendered by the petitioner in his capacity as a tax consultant. A further averment made in this second counter is that the respondent came into possession of "a fund of further and fresh information"-"from external sources subsequent to the completion of the original assessment-". Taking strong objection to the filing of the second counter-affidavit, contending that it was bereft of bona fides and that rule 12 of the Writ Proceedings Rules, 1977, framed by this court forbids such filing without the leave of the court, a supplemental reply-affidavit was filed by the petitioner characterising the allegations made in the second counter-affidavit as misrepresentations, especially the allegation pertaining to the transfer of half share in "Shapoor House" by Mrs. Chenai in favour of her grandson. In this supplemental reply-affidavit, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to for the benefit of the said Anjaneyulu, his wife and children, who, for brevity's sake, are hereinafter referred to as "THE SAID BENEFICIARIES" and more fully described in Schedule I given hereinunder." Order Sheet: 1983-84: "Justice Shri Y. V. Anjaneyulu. The assessment for the assessment year 1983-84 of Shri Y. V. Anjaneyulu, then advocate and now High Court Judge was completed on November 5, 1983, on a total income of Rs. 2,48,258. As per the copy of the declaration of trust dated August 27, 1982, the assessee's client Mr. Freny Rashid Chenai w/o. late Shri Rashid Shapoor Chenai had created a trust in favour of the assessee and his family members to the extent of Rs. 5 lakhs. I have come to know now from enquiries and the audit report that Shri Y. V. Anjaneyulu was representing income-tax, wealth-tax and estate duty assessments of late Rasheed Shapoor Chenai and his family members for quite a long time. The assessee was solely responsible for reduction of huge estate duty liability of the late R. S. Chenai and his son's estate. He was also representing the legal heirs of both father and son, Mrs. Freny Rashid Chenai and Mrs. Kursheed Shapoor Chenai. In view of the substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irs of both father and son, viz., Mrs. Freny Rashid Chenai and Mrs. Kursheed Shapoor Chenai. The assessee's son purchased a site in Shapoorwadi and constructed a building when he was representing the estate duty cases before the lower courts. In view of the substantial reduction gained by the effective representation of Shri Y. V. Anjaneyulu, the wife of late Rasheed Shapoor Chenai, instead of the payment of professional fees, preferred to create a trust in favour of Shri Y. V Anjaneyulu and his family members to the extent of Rs. 5,00,000 at his instance. This is also a device adopted by the assessee to escape proper taxation in his hands. The advocate and client relationship is there beyond any shadow of doubt since the cases won by the advocate have already been reported in all the legal journals including the Income Tax Reports (Please see fees account for details). The receipt of Rs. 5,00,000 can easily be held as a professional receipt of Shri Y. V. Anjaneyulu for the meritorious services rendered by him, camouflaged in the form of family trust created. The Income-tax Officer who made the assessment on November 5, 1983, lost sight of the fact that the factum of receipt of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions adumbrated in section 147(b), the exercise of power is vitiated. The respondent's failure to produce the record concerning the so-called enquiries claimed to have been made before issuing the impugned notice vitiates the notice impugned. The second counter filed by Sri Dayanand, Income-tax Officer, seeking to support the action for issuing the impugned notice must be ignored totally since it refers to matters which are neither part of the audit report nor of the reasons recorded in the "order sheet". The trust not being a reward for the professional services rendered by the petitioner to the Chenai family, the proposed action to treat the same as professional income which has escaped assessment has no legal basis. The ruling of the Supreme Court in Indian and Eastern Newspaper society V. CIT [1979] 119 ITR 996 applies on all fours to the case on hand and, therefore, the impugned notice must be struck down. On the other hand, Sri M. S. N. Murthy, learned counsel for the Revenue, has submitted that the "information" in the possession of the respondent need not be external to the original record which constituted the basis for the previous officer who passed the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) obligates the Income-tax Officer to issue notice in all cases pertaining to escapement of assessment falling within the ambit of section 147. Before issuing such notice, the Income-tax Officer is required by section 148(2) to record his reasons. valid exercise of power under section 147(b) postulates that: (1 ) the information obtained must be subsequent to the previous assessment; and (2) such information must validly constitute the basis for the reason to believe that income chargeable to tax has escaped assessment. The phrase "reason to believe" occurs in both clauses (a) and (b) of section 147. Section 147(a) was considered by the Supreme Court in ITO v. Lakhmani Mewal Das [1976] 103 ITR 437. While holding that "once there exist reasonable grounds for the Income-tax Officer to form the above belief (under section 147(a))", observed His Lordship Khanna J., speaking for the court (at page 445): "... that would be sufficient to clothe him with jurisdiction to issue notice. Whether the grounds are adequate or not is not a matter for the court to investigate. The sufficiency of the grounds which induce the Income-tax Officer to act is, therefore, not a justiciable issue. It is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. The underlying reason for that is that instances of concealed income or other income escaping assessment in large number of cases come to the notice of the income-tax authorities after the assessment has been completed. The provisions of the Act in this respect depart from the normal rule that there should be, subject to right of appeal and revision, finality about orders made in judicial and quasi-judicial proceedings. It is, therefore, essential that before such action is taken, the requirements of the law should be satisfied." Cautioning that the finality of an assessment proceeding cannot be disturbed except strictly in accordance with the relevant statutory provisions, the Supreme Court, speaking through his Lordship Pathak J. (as he then was), in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996, laid down the rule (at page 1000): "An assessment proceeding is a quasi-judicial proceeding. It acquires finality on the assessment order being made. And the finality of such an order can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the record, not only the formal order, but all those documents which appear therefrom to be the basis of the decision-that on which it is grounded." The record produced before us at the time of hearing consists of, among other papers, "the order sheet" containing the reasons recorded and the audit report. The satisfaction reached by the respondent for coming to the conclusion that the trust amount of Rs. 5,00,000 was a professional receipt of the petitioner was claimed to be the result of the enquiries made by the respondent and the audit report as can be seen from paragraph 2 of the recorded reasons "I have come to know now from the enquiries and the audit report- I am, therefore, satisfied that the receipt of Rs. 5,00,000 is only a professional receipt of the assessee for the meritorious services which is camouflaged in the form of trust." No record whatsoever as to what were the enquiries made and the nature of such enquiries has been placed before us. The necessary link as to how the audit report reached the respondent is missing in the file. The correspondence in this regard must have consisted of forwarding letters from the audit party to the respondent but the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on November 5, 1983, was under section 143(3) of the Act after considering the evidence produced by the petitioner. Along with the original return filed by the petitioner, he enclosed a covering letter in which he clearly mentioned about the trust and one of the items in respect of which he claimed deduction in the return filed by him related to an amount of Rs. 13,005 representing interest on 7% Capital Investment Bonds of the face value of Rs. 5,00,000 received from the trustees of the trust in question. The then Income-tax Officer sought clarifications from the petitioner in respect of certain items mentioned in the return including the interest claimed relatable to the trust. The settlor, Mrs. F. R. Chenai, on September 19, 1983 submitted letter to the then Income-tax Officer confirming the formation of the trust and stating "that the gift of the above capital investment bond is exempted under the gift-tax under section 5(1)(iiic) of the Gift-tax Act, 1958." After considering these aspects and scrutinising the copy of the trust deed filed by the petitioner along with the return, the assessment was finalised on November 5, 1983. Mr. Waheed was the previous Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any basis. It is incumbent upon the respondent to "set out any material on the basis of which he had arrived at such belief so that the court could decide for itself whether there was any material on the basis of which the Income-tax Officer could reasonably entertain such belief." [See ITO v. Madnani Engineering Works Ltd. [1979] 118 ITR 1, 6.] The estate duty case regarding the Chenai family was argued, according to the petitioner in the High Court unsuccessfully by Shri P. Ramachandra Reddy, the former Advocate-General, and successfully in the Supreme Court by Shri N. A. Palkhivala. The Income Tax Reports in Khorshed Shapoor Chenai v. Asst. CED [1980] 122 ITR 21 shows the name of Shri Palkhivala as the senior advocate who appeared for Mrs. Chenai. Names of six advocates who appeared along with him also are printed in the law report-one of them is the petitioner. This was so because the petitioner also filed his vakalat for the party and the fees he claimed for that appearance were Rs. 5,000 which he disclosed in the return filed by him. The senior advocate, Shri Palkhivala, charged Rs. 20,000 according to the petitioner and this was not denied by the respondent. When th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed to take advantage of an oversight or mistake committed by the taxing authority; (3) where the information is derived from an external source of any kind. Such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of the original assessment; (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. If these conditions are satisfied then the Income-tax Officer would have complete jurisdiction to reopen the original assessment. It is obvious that where the Income-tax Officer gets no subsequent information, but merely proceeds to reopen the original assessment without any fresh facts or materials or without any enquiry into the materials which form part of the original assessment, section 34(1)(b) would have no application." Referring to the second proposition above, a three-judge Bench of the Supreme Court, speaking through his Lordship Pathak J. (as he then was) in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996 he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the High Court of Punjab. In George Thomas (K.) (Dr.) v. CIT [1985] 156 ITR 412 (SC), certain sums were received by the assessee as donations through the Indian Christian Crusade from his friends in the U. S. A., who believed in the cause which he sponsored and for helping the movement a movement for the spread of religion and for fighting the forces of atheism. The question was whether these amounts were assessable to tax. Confirming the decision of the High Court that the amounts were liable to tax, the Supreme Court held (at page 420) : "It has been established that the assessee was carrying on a vocation, the vocation of preaching of Christian Gospel and helping anti-atheism was the vocation of his life. He was running a newspaper in aid of that. The donations received from America were to help him for the said purpose. They arose out of his carrying on and continued so long as he carried on this avocation or vocation. These receipts, therefore, arose out of his vocation. These were, therefore, his income." Although the audit report refers to Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC), the recorded reasons do not advert to that case. In the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of what George Thomas' case [1985] 156 ITR 412 (SC) was about and he did not apply his mind as to how the cases mentioned in the audit report could form the basis for reopening the assessment. The previous assessment, as already noticed supra, was made after conscious application of mind and after considering the evidence including the trust deed and the confirmation letter submitted by the settlor. Neither the audit report nor the record of reasons discloses what was the information that came into the possession of the respondent subsequent to the previous assessment. His belief that there was such information is not determinative as ruled by the Supreme Court in ITO v. Madnani Engineering Works Ltd. [1979] 118 ITR 1 It is true as rightly contended by Shri Murthy for the Revenue that the word "information" includes information as to the true and correct state of law and so would cover information as to relevant judicial decisions. In Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 (SC), the Incometax Officer, following the earlier decision of the Patna High Court in Kamakshya Narayan Singh's case [1946] 14 ITR 673, omitted to bring to assessment a sum of Rs. 93,604, representi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he possession of the Income-tax Officer after the previous assessment but even if the information be such that it could have been obtained during the previous assessment from an investigation of the material on the record, or the facts disclosed thereby, or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected." After stating the rule, the court in that case examined the notice issued by the Income-tax Officer for reassessment and found that it suffers from a serious infirmity-it did not contain the reasons to establish the existence of the plea that income chargeable to tax has escaped assessment. These two rulings on which strong reliance was placed by Shri Murthy, learned counsel for the Revenue, do not lend any support to sustain the impugned order which is silent as to what was the information that came into the possession of the second Officer and how it constituted the basis for the formation of the opinion that income chargeable to tax has escaped assessment. As already noticed above, no fresh information had come to the notice of the respondent subsequent to the previous assessment and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxing authority (which is no longer good law in view of the rule stated in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC)), the Supreme Court quoted with approval the aforesaid statement of law laid down by the Bombay High Court. In CIT v. Dinesh Chandra H. Shah [1971] 82 ITR 367, the Supreme Court faulted the reopening of assessment under section 34(1)(b) on the ground that (headnote): "mere change of opinion could not be a valid ground for reopening an assessment under section 34(1)(b) of the Act." A vague feeling that certain transactions were not genuine and, therefore, the assessment could be reopened under section 148 would not be valid reason for according permission under section 151(2) for such reopening was the rule laid down in Chhugamal Rajpal v. S. P. Chaliha [1971] 79 ITR 603 (SC). From the circumstance that the assessing authority, while making the original assessment, put a tick mark upon the disputed amount of assessment, the Bombay High Court in CIT v. Bhagwandas K. Bros. [1973] 91 ITR 256 drew the inference that there was conscious application of mind and by coming to a different conclusion the successor officer could not justifiably reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, the successor-Income-tax Officer could not reopen the assessment on the pretext that he informed himself of the correct legal position from the assessment of the firm, which cannot be regarded as a formal source. It would only amount to a fresh look on the facts already on record and hence the proceedings were invalid." The respondent has not discovered any error in the view taken by the predecessor-officer but he only formed an opinion different from the one arrived at by the previous officer. The formation of the opinion has no nexus with the material disclosed in the record of reasons. It is, therefore, a clear case of change of opinion without anything more falling within the ambit of the dicta laid down in the rulings adverted to supra. Even "an error discovered on a reconsideration of the same material (and no more) does not give him that power" is the principle unequivocally laid down by the Supreme Court in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996. That part of the note of the audit party which mentions the law which escaped the notice of the Income-tax Officer constitutes information within the meaning of section 147(b) and the part which embodies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of Maharaj Kumar Kamal Singh's case [1959] 35 ITR 1 (SC), A. Raman and Co.'s case [1968] 67 ITR 11 (SO) and Bankipur Club Ltd. v. CIT [1971] 82 ITR 831 (SC), although these three rulings were referred to by his Lordship Pathak J. (as he then was), speaking for the court, in support of the above proposition. I cannot agree. When a decision is rendered without noticing a binding precedent or an inconsistent statutory provision, it is per incuriam and, therefore, loses its efficacy as a precedent: except the parties to the lis it binds none. The application of the doctrine of per incuriam was considered by the Court of Appeal in a recent decision in Duke v. Reliance Systems Ltd. [1987] 2 AU ER 858 (CA), wherein Sir John Donaldson M. R. held (at p. 860): "I have always understood that the doctrine of per incuriam only applies where another division of this court has reached a decision in the absence of knowledge of a decision binding on it or a statute, and that in either case it has to be shown that had the court had this material, it must have reached a contrary decision. That is per incuriam. I do not understand the doctrine to extend to a case where, if different arguments had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of the Supreme Court that arose under the Income-tax Act, including Maharaj Kumar Kamal Singh's case [1959] 35 ITR 1 (SC) held (at page 337 of 21 STC): "In our judgment, the knowledge of the fact that the appellants had not submitted their quarterly returns as well as the treasury challans, constituted an information to the assessing authority from which it could be satisfied and in fact it was satisfied that the turnovers with which we are concerned in this case had escaped assessment." Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC) is an authority for the proposition that knowledge on the part of the assessing authorities about the fact that the assessees had neither submitted their returns nor treasury challans in proof of payment of tax due from them is a circumstance from which it is reasonable "to hold that in consequence of the information that the appellants had not submitted their returns as well as the treasury challans, the assessing authority should have been satisfied about the escapement of assessment." The principle on which the decision was rendered by the majority in Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC) cannot be construed in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed his Lordship, Shah J., in the above said case (at page 15) : "in the context in which it occurs must, in our judgment, mean instruction or knowledge derived from an external source concerning facts or particulars, or as to law relating to a matter bearing on the assessment." It does not lay down that, on reconsideration of the same material, the assessing authority can reopen the assessment. It must also be mentioned in this context that the assessment order impugned in the above case was set aside on the ground that based on the information in the possession of the Income-tax Officer, he could not have formed the belief that income chargeable to tax escaped assessment. In Bankipur Club Ltd. v. CIT [1971] 82 ITR 831 (SC), the assessee club had received certain amounts as guest charges from its members and the same were shown to the Income-tax Officer. The officer, while making the assessment order, held that these amounts were not liable to tax. Subsequently, a notice under section 34(1)(b) was issued to reopen the assessment. His Lordship Hegde J., speaking for the Division Bench, consisting of himself and his Lordship, Grover J., held (at page 834) : "In these cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om), that would not be a case of mere change of opinion but it would be a change of opinion supported by or in consequence of the knowledge received by the Income-tax Officer and such a change of opinion will not be outside the scope of clause (b) of section 147 of the Incometax Act, 1961. As, in this case, there was such an information or knowledge that the original assessment might have been wrong and the Income-tax Officer because of that information had to re-examine the facts of this case and formed the belief that the income had escaped assessment, in our opinion, it cannot be said that the proceedings were not validly initiated." Sri Murthy, learned counsel for the Revenue, placing strong reliance upon these two decisions, contended that the view entertained by the respondent that the earlier assessment might be wrong, cannot be faulted. I see no merit in this contention. CIT v. Yash Pal Mehra and Co. [1977] 109 ITR 742 (P & H) is no longer good law since it is based entirely on the reasoning in Kalyanji Mavji's case 1976] 102 ITR 287 (SC). S. B. (House and Land) Pvt. Ltd. v. CIT [1979] 119 ITR 785 (Cal) was rendered before the Supreme Court's decision in Indian and Eastern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out by the audit party was not "information". The Madras High Court held (at page 49) : "it is not disputed before us that the entire borrowals were not utilised for the purpose of business and part of the borrowals was utilised for making investment. If so, if the dividends were assessed without deducting the interest referable thereto, it would inevitably follow that the ultimate tax payable on the total income was lower than the actual tax payable because the rate of tax payable on inter-corporate dividend was certainly lower than the rate applicable to the other income. Consequently, it is clear that the requirements of section 147(b) as to the income having escaped assessment is satisfied in the present case." This is not a case of reconsideration of the same material. The Income-tax. Officer had no knowledge even on the first occasion about what was pointed out by the audit party. In Zoraster and Co. v. CIT [1987] 163 ITR 858 (Raj), at the time of the original assessment the Income-tax Officer considered the debit balances in the accounts of only three parties while the audit party pointed out the names of eight parties to whom interest-free advances were given by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Newspaper Society's case [1979] 119 ITR 996 (SC). On a reference whether the reopening of the assessment was valid, the Division Bench held (at page 74) : "It is not the object of the circular to express an opinion, for no such opinion was called for. Once the Supreme Court has pronounced upon the matter, the question is, in the absence of subsequent overriding legislation, concluded and the opinion of any other person is of no relevance. Whatever opinion may have been expressed in the circular, whether it is the opinion of the Board or any other agency, such opinion is of no consequence or relevance, apart from a mere reference to the authoritative pronouncement on the matter by the Supreme Court. The object of the circular is, therefore, merely conveyance of the information regarding that pronouncement by the highest court of the land. We do not, therefore, see any inconsistency between the decision of the Income-tax Officer to reopen the assessment and the principle stated by the Supreme Court in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996. The principle is that while the Income-tax Officer should not be influenced by the opinion of the Board or the audit par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion/tax savings have resulted to the Chenai family," and that Mrs. F. R. Chenai transferred her half share in "Shapoor House" to Shri D. S. Chenai during the previous year relevant to the assessment year 1983-84 "without attracting capital gains tax, possible estate duty (as she was aged about 78 years) and also gift-tax," are totally incorrect. From the supplemental reply affidavit filed by the petitioner and copies of gift-tax assessment orders produced before us, it is clear that the Department levied gift-tax of Rs. 2,72,000 for the assessment year 1983-84 in the hands of Mrs. F. R. Chenai and Rs. 17,470 in the hands of Mrs. K. S. Chenai. This supplemental affidavit of Shri Dayanand, therefore, deserves to be ignored in toto. Openness, fairness and impartiality must be discernible in the exercise of power, both statutory and administrative : legality and legitimacy rest on them. The very second sentence in the audit report shows that the earlier assessment of the petitioner was subjected to audit twice ; first, by the Internal Audit Party (I. A. P.) and second, by the Revenue Audit Party (R. A. P.). On both the occasions, obviously there had been no discovery that any part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one equal part of the trust fund to each of the five children of the petitioner. Mrs. K. S. Chenai, the widowed daughter-in-law of the settlor and Mr. Ratnakar, the son of the petitioner are the trustees. The petitioner filed the income-tax returns for the assessment year 1983-84 showing a gross income of Rs. 2,57,571 and after claiming statutory deductions, the net income returned was Rs. 2,40,245. One of the items on which the petitioner claimed deduction was a sum of Rs. 13,000 representing the interest on 7% capital investment bonds of the face value of Rs. 5 lakhs received from the trustees of the trust. Along with the returns, the petitioner also forwarded a letter dated July 27, 1983 explaining the salient features of the trust. Before finalising the assessment, the Income-tax Officer verified from the settlor about the trust and a letter was submitted by her on September 19, 1983, through the petitioner confirming the factum of creation of the trust. The then Incometax Officer, one Mr. Waheed, finalised the assessment and passed an order under section 143(3) of the Act on November 5, 1983. Nearly four years and four months thereafter, the impugned notice was issued under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer, Mr. Waheed, completed three assessments of the petitioner under section 143 of the Act and scrutinised the returns and the statements and that he was fully aware of the relationship of advocate and client between the petitioner and the Chenai family and that for every case in which he appeared, he charged a decent fee. It is further stated that the benefit of huge reduction of estate duty was not due to his efforts but due to the efforts of Sri P. Ramachandra Reddy in the High Court and Sri N. A. Palkhivala in the Supreme Court, and that Sri Palkhivala received a fee of Rs. 20,000 and the petitioner received only Rs. 5,000 which is also accounted for. The petitioner also stated that the fee charged by him is on the high side and, therefore, the question of creating a trust in lieu of fees does not arise. From the record, it appears that there was an audit report in which it was suggested that the Income-tax Officer may be directed to take action under section 147(b) of the Act. Pursuant to that, the Income-tax Officer recorded the reasons, which is otherwise called the "order sheet". The order sheet contains the reasons that led the Income-tax Officer to believe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id down in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC) is per incuriam since it is contrary to the law laid down by the earlier larger Benches, particularly in Anandji Haridas and Co. P. Ltd. v. S. P. Kushare, STO [1968] 2l STC 326, a decision rendered by a Bench of five judges of the Supreme Court. My learned brother, Seetharam Reddy J., after considering the facts, the relevant documents as well as the various decisions cited, held that the information in the instant case includes the contents of the audit report and the Income-tax Officer had reasonably believed that income chargeable to tax had escaped assessment for the assessment year. In arriving at such a conclusion, the learned judge mainly relied on the ratio laid down in Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC) and also in Kalyanji Mavji and Co. v. CIT [1976] 102 ITR 287 (SC). After having reached the conclusion that the judgment in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC) is rendered per incuriam, held that it has no sway on binding precedents. My learned brother, M. N. Rao J., on the other hand, after considering the necessary material and the arguments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction for reassessment, two conditions have to be satisfied, viz., (1) there should be information in his possession, and (2) as a consequence of such information, he has reason to believe that income chargeable has escaped assessment. What constitutes "information" is the subject-matter of decision of various courts. In CIT v. A. Raman and Co. [1968] 67 ITR 11, the Supreme Court took the view that (at page 16) : "Jurisdiction of the Income-tax Officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information, must, it is true, have come into the possession of the Income-tax Officer after the previous assessment.. ." In Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC), their Lordships were dealing with the scope of section 11A of the C. P. and Berar Sales Tax Act which was in pari materia with section 34 of the Income-tax Act. In CIT v. Holck Larsen (H.) [1972] 85 ITR 467 (Bom referring to these two decisions, viz., A. Raman and Co.'s case [1968] 67 ITR 11 (SC) and Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC), and also having noticed some conflict of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Officer is controlled by the words 'reason to believe'. Information may come from external sources or even from the materials already on record or may be derived from the discovery of new and important matter or fresh facts. Section 34(1)(b) would apply to the following categories of cases: (1) where the information is as to the true and correct state of the law derived from relevant judicial decision; (2) where in the original assessment the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income-tax Officer ; (3) where the information is derived from an external source of any kind such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of original assessment ; and (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. Where, however, the Income-tax Officer gets no subsequent information, but merely proceeds to reopen the original assessment without any fresh fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has not applied his mind and has not considered the legal principles and by mistake or inadvertence, he omitted to treat the trust amount as fees or consideration for his services rendered. He submitted that the decision in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC), is rendered Per incuriam and, therefore, an income which had escaped assessment due to oversight, inadvertence or mistake can be a ground for reopening and that, in the instant case, there is information to that effect, as contained in the audit report on the basis of which the Income-tax Officer recorded his reasons, i.e., the order sheet, and issued the impugned notice. The order sheet and the audit report which have some significance, have to be reproduced. Order sheet: 1983-84: "Justice Shri Y. V. Anjaneyulu. The assessment for the assessment year 1983-84 of Shri Y. V. Anjaneyulu, then advocate and now High Court judge, was completed on November 5, 1983, on a total income of Rs. 2,48,258. As per the copy of the declaration of trust dated August 27, 1982, assessee's client, Mrs. Freny Rashid Chenai, w/o. late Shri Rashid Shapoor Chenai, had created a trust in favour of the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 2,48,258. This assessment was audited by the Internal Audit Party and Revenue Audit Party also. However, there is a possibility of review audit by Revenue Audit Party since a major audit objection is being raised for the assessment year 1985-86. Similar issue as in 1985-86 is involved in this assessment as well. Shri Y. V. Anjaneyulu was representing since long time income-tax, wealth-tax and estate duty assessments of late Rasheed Shapoor Chenai and his family members. He was solely responsible for reduction of huge estate duty liability of both late R. S. Chenai and his son's estate and similarly he has been representing the legal heirs of both father and son, viz., Mrs. Freny Rashid Chenai and Mrs. Kursheed Shapoor Chenai. The assessee's son purchased a site from Shapoorwadi and constructed a building when he was representing the estate duty cases before the lower courts. In view of the substantial reduction gained by the effective representation of Shri Y. V. Anjaneyulu, the wife of late Rasheed Shapoor Chenai, instead of payment of professional fees, preferred to create a trust in favour of Shri Y. V. Anjaneyulu and his family members to the extent of Rs. 5,00,000 at his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elationship between the petitioner and Mrs. Chenai, the settlor, and that the petitioner was solely responsible for reduction of huge estate duty liability of both the late R. S. Chenai and his son and the assessee's son purchased the site at Shapoorwadi and constructed a building and that in view of the substantial reduction gained by the effective representation of Sri Y. V. Anjaneyulu, the wife of the late R. S. Chenai, instead of payment of professional fees, preferred to create a trust in favour of Sri Y. V. Anjaneyulu and his family members and this is also a device adopted by the assessee to escape proper taxation and that the advocate-client relationship is there beyond any shadow of doubt and this amount can easily be held as a professional receipt of the assessee but the same is camouflaged in the form of a family trust and that the Income-tax Officer who made the assessment for the assessment year 1983-84 had lost sight of this fact. Then, there is a reference to the Supreme Court cases. In the order sheet, we find the same particulars reproduced verbatim. The Income-tax Officer has also noticed that the existence of advocate-client relationship is there beyond any shado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ern Newspaper Society's case [1979] 119 ITR 996 (SC), is rendered per incuriam. I have already referred to A. Raman and Co.'s case [1968] 67 ITR 11, wherein the Supreme Court has clearly laid down that the jurisdiction of the Incometax Officer to reassess income arises if he has, in consequence of information in his possession, reason to believe that income chargeable to tax has escaped assessment. That information must have come into the possession of the officer after the previous assessment. Their Lordships, however, added that (headnote) "even if the information be such that it could have been obtained during the previous assessment from an investigation of the material on record, or the facts disclosed thereby, or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected". Now, I shall refer to the ratio laid down in the cases referred to by the Income-tax Officer. In Kalyanji Mavji's case [1976] 102 ITR 287 (SC), one of the principles which is laid down and which is relevant for the purpose of this case, is that when the original income liable to tax has escaped assessment due to oversight, inad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . These receipts, therefore, arose out of his vocation. These were, therefore, his income. In the affidavit filed by the petitioner in the instant case, it is stated, and it is also not in dispute, that the estate duty case relating to Mrs. Chenai was argued in the High Court by Sri P. Ramachandra Reddy, former Advocate-General, but unsuccessfully, and that the matter was carried to the Supreme Court where Sri N. A Palkhivala appeared and the petitioner assisted him. The same is reported in Khorshed Shapoor Chenai v. Asst. CED [1980] 122 ITR 21. The petitioner claimed a fee of Rs. 5,000 and the same was disclosed in the return and Sri Palkhivala, as a senior advocate, charged a sum of Rs. 20,000. The petitioner also stated that he has been charging the Chenai family in all the matters in which he appeared, rather heavily, and those receipts are included in the returns filed previously and also during the year 1983-84. It is not in dispute that all this material was there before the Incometax Officer when he passed the assessment order earlier. Therefore, in these circumstances, what is the information that the Income-tax Officer has received afresh, even assuming from the same re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies or other courts of law and also would cover information as to relevant judicial decisions. It can be regarding a fact as well as law. The Income-tax Officer will have jurisdiction to reassess the income if he has, in consequence of information in his possession, reason to believe that income chargeable to tax has escaped assessment. That information must have come to his possession after the previous assessment. But, even if the information is such that it could have been obtained during the previous assessment from an investigation of the materials on record, or from other enquiry or research into the facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected. The court can ascertain whether the Income-tax Officer had in his possession any such subsequent information and also determine whether, from the information, the Income-tax Officer may have reason to believe that income chargeable to tax has escaped assessment. Then came the decision in Kalyanji Mavji's case [1976] 102 ITR 287 (SC). That was a case where, during the course of the assessment proceedings for the assessment year 1958-59, the Income-tax Officer discovered that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 (SC), after referring to the earlier decisions, it is pointed out that where the Income-tax Officer gets no such information, but merely proceeds to reopen the original assessment without any fresh facts or materials or without any enquiry into the materials which form part of the original assessment, the Income-tax Officer has no jurisdiction to reopen. It appears to me that the Supreme Court in Kalyanji Mavji's case [1976] 102 ITR 287 (SC), in fact, indicated that the information that is obtained from the record of the original assessment should be subsequent, on an enquiry and such information must lead to a belief in good faith that taxable income has escaped assessment due to oversight, inadvertence or mistake. But, where the Income-tax Officer, while making the assessment has already applied his mind and appraised the said material, then subsequently if the jurisdiction under section 147(b) is exercised without any subsequent information and the Officer merely proceeded to reopen the assessment without any fresh facts or material or enquiry, then the court can interfere. In Bankipur Club's case [1971] 82 ITR 831, the Supreme Court held thus (at p. 834) : "The fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the formation of the belief and are not extraneous or irrelevant for the purpose of the section." The learned judge, while amplifying the above observations, further held (at p. 448) : "Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there, has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and farfetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. The fact that the words 'definite information' which were there in section 34 of the Act of 1922, at one time before its amendment in 1948, are not there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not apply his mind, appraise or consider the material. If, on the other hand, the record shows that the previous officer has focussed his attention on this very question, viz., whether any income has escaped assessment, and has passed orders, after the necessary consideration and appraisal, subsequently the officer cannot again reopen, merely because he thinks he can come to a different conclusion on the same material, without any fresh facts. In this context, it is also useful to refer to a judgment of the Calcutta High Court in S. B. (House and Land) Pvt. Ltd. v. CIT [1979] 119 ITR 785, wherein Sabyasachi Mukharji J., speaking for the court, referred to all these cases including the judgment of Chandrachud J. (as he then was) in H. Holck Larsen's case [1972] 85 ITR 467 (Bom), Kalyanji Mavji's case [1976] 102 ITR 287 (SC) and Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC) and held thus (at p. 802) : ". . . if there is new knowledge or new information and such knowledge leads to a change of opinion, then, in our opinion, as was observed by the court, in the case of CIT v. H. Holck Larsen [1972] 85 ITR 467 (Bom), that would not be a case of mere change of opinion but it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the question whether the Income-tax Officer, in a given case, has applied his mind, or considered or appraised the material on record or not, depends upon the facts and circumstances of each case as observed in Kalyanji Mavji's case [1976] 102 ITR 287 (SC). In CIT v. Bhagwandas K. Bros. [1973] 91 ITR 256 (Bom), the assessing authority, while making the original assessment, just put tick mark upon the disputed amount of assessment. Then, the Bombay High Court drew the inference that there was conscious application of mind and by coming to a different conclusion, the successor officer could not justifiably reopen the assessment under section 34(1)(b). As observed in Chhugamal Rajpal v. S. P. Chaliha [1971] 79 ITR 603 (SC), a vague feeling that certain transactions were not genuine, and, therefore, the assessment could be reopened under section 148, would not be a valid reason for according permission for reopening. Bearing the above principles in mind, I shall once again minutely examine the relevant facts from this angle. It is not in dispute that Mrs. Chenai created "Anju Family Trust" for the benefit of the petitioner and his family members, because of her affinity to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability of the late R. S. Chenai, and that the petitioner was also representing the legal heirs of both the father and son, and in view of the substantial reduction gained by the effective representation of Sri Y. V. Anjaneyulu, Mrs. Chenai, instead of payment of professional fee, created the trust which should have been at the instance of the petitioner, and this is device adopted by the petitioner to escape proper taxation in his hands. It is also further stated that the existence of advocate-client relationship is there beyond any shadow of doubt, since the cases won by the assessee have already been reported in all the legal journals including the Income Tax Reports and, therefore, the said receipt has to be assessed in the hands of the assessee as income by taking recourse to section 147(b) in view of the Supreme Court decisions in Kalyanji Mavji's case [1976] 102 ITR 287, P. Krishna Menon's case [1959] 35 ITR 48 and George Thomas' case [1985] 156 ITR 412. It is this order sheet that should reflect whether the Income-tax Officer had any subsequent information, whether there were enquiries and whether there were any fresh facts which created a reasonable belief in him that tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms to have got is only from the records that were already there. Even the advocate-client relationship between the two was not by way of subsequent information.. Admittedly, the petitioner has filed returns for the previous three years before the same officer, in which the details of the fees that he had received from the Chenai family have been mentioned and the same Income-tax Officer, Sri Waheed, assessed them. Therefore, the previous Income-tax Officer was very much aware of this relationship. In any event, the knowledge of the previous officer about this relationship is not seriously doubted. In the audit report as well as in the order sheet, it is made plain that an advocate-client relationship is there beyond any doubt as the same is clear from the legal reports Therefore, it is but obvious that Sri Waheed also was aware of this, particularly when he assessed them. Therefore, the previous returns. So, there was no tangible information, as required under section 147(b), which led to a reasonable belief in this regard. It is, however, argued that, in the audit report, it is mentioned that it is reasonable to believe that there was escapement of income from assessment because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceeding cannot be disturbed except strictly in accordance with the relevant statutory proceedings because that would be endless. For all these reasons, I am of the view that there is no subsequent "information" within the meaning of section 147(b) of the Act which led the Income-tax Officer to reasonably believe that taxable income has escaped assessment. No doubt, at one stage, learned counsel for the Revenue contended that the audit report itself can constitute fresh information and that that is enough for the Income-tax Officer to reasonably believe that reopening was necessary. I have, already to a large extent, adverted to this aspect also and pointed out that even the audit report does not show that there is any such fresh material by way of subsequent information. Nor can it be said that there was oversight, inadvertence or mistake on the part of the previous Income-tax Officer. The previous officer has not lost sight of Rs. 5 lakhs, the subject-matter of the trust ; nor has he lost sight of the legal effect of the advocate-client relationship. When he has not come forward with any affidavit suggesting any such mistake, inadvertence or oversight on his part, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered per incuriam. Further, the position also is not very clear whether by virtue of the principles laid down in Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC), the decision in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC) becomes per incuriam. In Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC), the decision in Anandji Haridas and Co.'s case [1968] 21 STC 326 (SC) was not cited before their Lordships. Their Lordships, while adverting to the ratio laid down in Kalyanji Mavji's case [1976] 102 ITR 287 (SC), observed that the proposition laid down therein, viz., that, were on reappraising the material considered by him during the original assessment, the Income-tax Officer discovers that he has committed an error in consequence of which income has escaped assessment, it is open to him to reopen the assessment, is stated "too widely". The learned judges further held thus (at p. 1004) : "In our opinion, an error discovered on a reconsideration of the same material (and no more) does not give him that power. That was the view taken by this court in Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 (SC), CIT v. A. Raman and Co. [1968] 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and followed by the Punjab and Haryana High Court in CIT v. Yash Pal Mehra and Co. [1977] 109 ITR 742. But equally so, several High Courts have followed the decision in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC) (to cite a few, Allahabad High Court in CIT v. Nem Kumar Jain Ratan Kumar [1980] 125 ITR 674, Calcutta High Court in Punjab Produce and Trading Co. Ltd. v. CIT [1986] 158 ITR 524, Rajasthan High Court in Purushottam Das Bangur v. ITO [1980] 126 ITR 580, and the Kerala High Court (Bench consisting of Balakrishna Eradi J. (as he then was) and Balagangadharan Nair J.) in CIT v. Cochin Co. (P.), Ltd. [1980] 126 ITR 522). However, the decision in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC), is referred to a larger Bench, and the limited question regarding the correctness of the said decision would be considered by the larger Bench. That being the position, I do not propose to go into the question whether the judgment in Indian and Eastern Newspaper Society's case [1979] 119 ITR 996 (SC), is rendered per incuriam. For all the aforesaid reasons, the impugned order is liable to be quashed and the writ petition is, accordingly, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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