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TMI Blog1979 (9) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... t-tax Act, 1958 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in quashing the reassessment completed under section 16(1)(b) of the Gift-tax Act, 1958 ? " The facts which have given rise to these questions briefly stated are that the assessee, late Sri Guran Ditta Mal, an individual, had constructed a house property bearing No. F-40, Green Park, New Delhi. He made a gift of a portion of that property on March 2, 1970, in favour of his son, Chiranjiv Lal Sarpal. The value of the gifted property was shown at Rs. 47,000 and the assessee filed a return of gift on November 27, 1970, declaring the taxable gift at the aforesaid amount. The GTO made an assessment under s. 15(1) on August 31, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the wealth-tax assessment where the value of the same property had been determined only on estimate. The reassessment was accordingly set aside. Hence, his reference. It was submitted before us on behalf of the revenue that the information in this case had come to the knowledge of the GTO from an external source and subsequent to the original assessment and the requirements of s.16(1)(b) were fully complied with. The order of the AAC passed in the appeal against the wealth-tax assessment for the assessment year 1969-70 constituted a valid information and on the basis of the same the GTO could take action under s. 16(1)(b), when he was satisfied that the gift-tax had been under assessed. On the other hand, according to the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are two conditions precedent which must be satisfied before this provision can be invoked and they are that the GTO should have reason to believe that any taxable gift has escaped assessment and it should be in consequence of information received after the original assessment that he should have such reason to believe. Both these conditions must be satisfied before an action taken under this provision can be justified. The import and meaning of the word " information " came up for consideration before the Supreme Court in Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 and it was laid down : " We would accordingly hold that the word ' information ' in section 34(1)(b) includes information as to the true and correct state of the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 34(1)(b) of the Indian I.T. Act, 1922, which is in pari materia with s. 15 of the E. P.T. Act, 1940, if he acted on information received from the decision of the superior authorities or the court even in the assessment proceedings. The other case is CST v. Bhagwan Industries (P.) Ltd. (1973) 31 STC 293 (SC), where an ex parte assessment made under r. 41(5) of the U.P Sales Tax Rules was reopened under s. 21 of the U.P. Sales Tax Act. The expresssion " reason to believe " occurring in s. 21 came up for interpretation and it was observed : " In our opinion, these words convey that there must be some rational basis for the assessing authority to form the belief that the whole or any part of the turnover of a dealer has, for any rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny further authority to make it significant. But when information is regarded as meaning instruction or knowledge as to law, the position is more complex. It has been observed : " 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ratio which has been laid down by the Supreme Court in the abovementioned case, it would be clear that the information received by the GTO in the present case could constitute information for the purposes of s. 16(1)(b). This information was received by him from the appellate order made in the wealth-tax assessment of this very assessee in regard to the valuation of this very property for the immediately preceding year. That information, therefore, was from a quasi-judicial authority and being on a question of law could constitute an information within the meaning of s. l6(1)(b) and the reopening of the assessment on the basis of the same was perfectly justified. In view of the foregoing discussion, it is not necessary to refer to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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