Author: Vinamar Gupta

2.The issue is relevant to determine right of the state to reassess where upon information which has come into  possession, the prescribed authority is satisfied that reasonable grounds exist to believe that any turnover of a registered dealer has, for any reason, escaped assessment.

3. According to the Oxford Dictionary, ‘information’ means facts told, heard or discovered about somebody/something.

4.The Law Lexicon describes the term ‘information’ as the act or process of informing, communication or reception of knowledge.

5. The expression ‘information’ means instruction or knowledge derived from an external source concerning facts or parties or as to law relating to and/or having a bearing on the assessment

6. We agree that a mere change of opinion or having second thought about it by the competent authority on the same set of facts and materials on the record does not constitute ‘information’ for the purposes of the State Act

7.It comprehends not only variety of factors including information from external sources of any kind but also the discovery of new facts or information available in the record of assessment not previously noticed or investigated.

8. Suppose a mistake in the original order of assessment is not discovered by the Assessing Officer, on further scrutiny, if it came to the notice of another assessor or even by a subordinate or a superior officer, it would be considered as information disclosed to the incumbent officer.

9.If the mistake itself is not extraneous to the record and the informant gathered the information from the record, the immediate source of information to the Officer in such circumstances is in one sense extraneous to the record

10.In such cases of obvious mistakes apparent on the face of the record of assessment, that record itself can be a source of information, if that information leads to a discovery or belief that there has been an escape of assessment or under-assessment or wrong assessment

11.There are a catena of judgments of this Court holding that assessment proceedings can be reopened if the audit objection points out the factual information already available in the records and that it was overlooked or not taken into consideration.

12.Similarly, if audit points out some information or facts available outside the record or any arithmetical mistake, assessment can be re-opened.

13. P.V.S. Beedies (SC) We are of the view that both the Tribunal and the High Court were in error in holding that the information given by internal audit party could not be treated as information within the meaning of Section 147(b) of the Income Tax Act. The audit party has merely pointed out a fact which has been overlooked by the Income Tax Officer in the assessment. The fact that the recognition granted to this charitable trust had expired on 22-9-1992 was not noticed by the Income Tax Officer. This is not a case of information on a question of law. The dispute as to whether reopening is permissible after audit party expresses an opinion on a question of law is now being considered by a larger Bench of this Court. There can be no dispute that the audit party is entitled to point out a factual error or omission in the assessment. Reopening of the case on the basis of a factual error pointed out by the audit party is permissible under law. In view of that we hold that reopening of the case under Section 147(b) in the facts of this case was on the basis of factual information given by the internal audit party and was valid in law. The judgment under appeal is set aside to this extent.”

14. Commissioner of Income Tax, U.P., Lucknow vs. M/s Gurbux Rai Harbux Rai (1971) 3 SCC 654:

“…………….This Court has consistently held that the Income Tax Officer would have jurisdiction to initiate proceedings under Section 34(1)( b) of the Income Tax Act, 1922, which is in pari materia with Section 15 of the Act if he acted on information received from the decision of the superior authorities or the court even in the assessment proceedings. (See R.B. Bansilal Abirchand Firm v. CIT 1 and Assistant Controller of Estate Duty, Hyderabad v. Nawab Sir Osman Ali Khan Bahadur , H.E.H. The Nizam of Hyderabad and others…………….”

15. M/s Phool Chand Bajrang Lal and Another vs. Income Tax Officer & Another (1993) 4 SCC 77

“25….. He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information…..”

16. Anandjiharidas & Co. vs. S.P. Kasture AIR 1968 SC 565 wherein it was held that a fact which was already there in records doesn’t by its mere availability becomes an item of “information” till the time it has been brought to the notice of assessing authority. Hence, the audit objections were well within the parameters of being construed as ‘information’

17. If AO was not satisfied on the basis of information given by the audit party that any of the turnover of the appellant-Company had escaped assessment and the assessing officer had to issue notice on the ground of direction issued by the audit party and not on his personal satisfaction, the reassessment can not be made.

Larsen & Toubro Ltd. (SC)[21-03-2017]

Provided further that the date of deposit shall in no case be extended beyond 30th April, 2017

Comments:

Does not appear to be extension for deposit  of  bonds under  PMGKY  for public in general . Only internal instruction requiring banks to deposit PMGKY amount with RBI till 30-4-17.

Further effective date which was earlier set at date of tender of cash or the date of realization of draft or cheque or transfer through electronic transfer has been postponed till date of receipt of deposit by RBI. It might result in delaying repayment period for maturity of such bonds.

[Notification dated 19-04-2017]