9911796707
TMI Blog1979 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The income was subsequently revised under s. 154 of the Act. Sri Makhan Lal Jain died on November 15, 1962. According to the ITO during the course of the assessment proceedings of the firm for 1963-64 itself he came to know that the assessee's wife, Smt. Durga Devi, was also a partner in the firm and her share income was to be clubbed with the assessee's income. Accordingly, he issued a notice under s. 148 for taking action under s. 147 on September 23, 1968. This notice was issued to the heirs and legal representatives of the assessee. Pursuant to that notice they filed a return on March 19, 1969, showing the same income which had been shown in the return as originally filed. They, however, disputed the validity of the reopening of the assessment on the ground that the assessee and his wife had been separately assessed in the preceding years in respect of their share income from the firm and that the assessee was not legally obliged to include in his income the share income of his wife. The ITO did not accept those contentions and he included the share income of the assessee's wife under s. 64(iii) of the Act and the total income thus computed came to Rs. 1,85,666. In appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that no finding has been recorded to the effect that the case of the department that such an information was received by the ITO from the file of the firm during the assessment for this very year, was wrong. On the other hand, according to Dr. K. B. Bhatnagar, counsel for the assessee, two conditions are required to be satisfied for the application of s. 147(b) and they are that there should be some information received by the ITO subsequent to the original assessment and, secondly, that should not be as a result of a fresh enquiry or research in respect of questions of fact or law. That was not the position here because all the primary facts were disclosed by the assessee in his original return and if there was any mistake or omission committed by the ITO that would not help the department unless it is shown that any further information was received by the I.T. Dept. subsequently. The non-application of mind on the part of the ITO would not justify the reopening of the assessment. In order to appreciate the contentions urged before us by counsel for the parties it would be necessary to refer to the relevant provisions of the Act. Section 147, in so far as it is relevant fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hered by the ITO in charge of the assessment in the previous years from the disclosures made by the two HUFs. In the opinion of the Supreme Court that view was wholly irrelevant, and it was held (p. 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, but even if the information be such that it could have been obtained during the previous 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, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected." The same view was taken by the Supreme Court in R. B. Bansilal Abirchand Firm v. CIT [1968] 70 ITR 74 (SC). However, in Kalyanji Mavji Co. v. CIT [1976] 102 ITR 287, a Division Bench of the Supreme Court gave a somewhat extended scope to this provision that even if in the original assessment the income liable to tax had escaped assessment d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its relevance. It requires no further authority to make it significant. Its quintessential value lies in its definitive vitality." However, in regard to the meaning of the word "information" as instruction or knowledge as to law, it has been observed that the position is more complex. The controversy between the parties centres round the point whether the instruction or knowledge as to law is circumscribed by any limitation. It has been observed (p. 1001): "When we speak of 'law', we ordinarily speak of norms or guiding principles having legal effect and legal consequences. To possess legal significance for that purpose, it must be enacted or declared by competent authority. The legal sanction vivifying it imparts to it its force and validity and binding nature. Law may be statutory law, or what is popularly described as, judge-made law. In the former case, it proceeds from enactment having its source in competent legislative authority. Judge-made law emanates from a declaration or exposition of the content of a legal principle or the interpretation of a statute, and may in particular cases extend to a definition of the status of a party or the legal relationship between ..... X X X X Extracts X X X X X X X X Extracts X X X X
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