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TMI Blog1987 (1) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that rental income of the exempted palace did not fall within the ambit of provision of sub-section (19A) of section 10 of the Income-tax Act, 1961 ? " The material facts giving rise to this reference, briefly, are as follows: The assessee is an erstwhile ruler of Ratlam. While framing the assessment of the assessee for the assessment years 1973-74 and 1974-75, the Income-tax Officer held that the rental income from " Ranjit Vilas Palace " owned by the assessee was exempt from tax under the Act. Thereafter, in view of the objections taken by the audit party that as a part of the palace had been let out b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m was not exempt from tax and that the opinion of the audit party did not constitute " information " within the meaning of section 147(b) of the Act, conferring jurisdiction on the Income-tax Officer to reopen the assessment. In reply, Shri Mukati, learned counsel for the Revenue, contended that the audit party had merely brought to the notice of the Income-tax Officer the relevant provision of law under which the income in question could not be held to be exempt from tax and that the Tribunal was justified in holding that the Income-tax Officer had jurisdiction to reopen the assessments. Now, it is significant to note that at the relevant time, when the income of the palace was not held to be chargeable to tax by the Income-tax Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 9. While sections 9 and 10 can be described as law, the opinion of the audit party in regard to their application is not law. It is not a declaration by a body authorised to declare the law. That part alone of the note of an audit party which mentions the law which escaped the notice of the Income-tax Officer constitutes 'information' within the meaning of section 147(b); the part which embodies the opinion of the audit party in regard to the application or interpretation of the law cannot be taken into account by the Income-tax Officer. In every case, the Income-tax Officer must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether in consequence of the law which has now com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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