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TMI Blog1976 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses claimed by the assessee were allowed by the Income-tax Officer without any question. Subsequently, the internal audit party of the income-tax department pointed out by its note dated September 25, 1971, that entertainment expenses had wrongly been allowed in excess of Rs. 5,000 contrary to the provisions of section 37(2) of the Income-tax Act, 1961. On the basis of the audit party's note, the Income-tax Officer reopened the assessments under section 147(b) of the Income-tax Act and reassessed the assessee by including an additional sum of Rs. 7,868 for the assessment year 1968-69 and an additional sum of Rs. 5,497 for the assessment year 1969-70. The Appellate Assistant Commissioner, however, cancelled both the reassessments on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at " to inform " meant " to impart knowledge " and that mere availability of a detail to the Income-tax Officer did not make it " information ". It became transmuted into " information " only if and when its existence was realised and its implications recognised. They quoted with approval the following observations of a Division Bench of the Madras High Court in Salem Provident Fund Society Ltd. v. Commissioner of Income-tax [1961] 42 ITR 547, 564 (Mad) : " We are unable to accept the extreme proposition, that nothing that can be found in the record of the assessment, which itself would show escape of assessment or under-assessment, can be viewed as information which led to the belief that there has been escape from assessment or under-ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvations were relied upon by the learned counsel for the assessee to argue that " information " must be from an external source and that the view of the internal audit party could riot be said to be " information " from an external source. We do not agree with the submission. In that very decision, the learned judges observed : "...... 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 matter has been settled beyond doubt by a recent decision of the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well be acquired by the Income-tax Officer himself on further research and discovery of facts or law which had previously passed unnoticed. Thus, it may be " self-generated ". This knowledge he may also acquire from his attention being drawn to it by some other agency. Whatever be the source of knowledge, what is essential is that it must be something of which the Income-tax Officer was not truly conscious previously. Thus, where he is not conscious of the true position in law or the true facts in existence, he may reopen the assessment on acquiring knowledge of the same. The very question whether the report of the audit party could be considered to be " information " within the meaning of section 147(b) was considered in Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oller of Estate Duty [1973] 88 ITR 65 (Punj) following Commissioner of Income-tax v. A. Raman & Co. [1968] 67 ITR 11 (SC). We do not see why it would not be " information " if someone drew the attention of the Income-tax Officer to it. Relying upon the decisions of the Supreme Court in Commissioner of Income-tax v. Dinesh Chandra H. Shah [1971] 82 ITR 367 (SC) and Bankepur Club Ltd. v. Commissioner of Income-tax [1971] 82 ITR 831 (SC), Shri Bhagirath Dass argued that there was but a mere change of opinion on the part of the Income-tax Officer and, therefore, there was no valid ground for reopening the assessment under section 147(b). He urged that " langer " expenses had been allowed at the time of the original assessment as business expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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