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Raja Jagdambika Pratap NaraIn Singh Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 295 of 1975
Judge
Reported in[1980]124ITR316(All)
ActsIncome Tax Act, 1961 - Sections 147
AppellantRaja Jagdambika Pratap NaraIn Singh
RespondentCommissioner of Income-tax
Appellant AdvocateR.K. Gualti, Adv.
Respondent AdvocateAshok Gupta, Adv.
Excerpt:
- .....he also filed the details of rents received from the tenants. in the details submitted, the rent received from raja sadan was shown to have been received from the deputy director of agriculture. these details appear to have been filed pursuant to enquiries made by the ito and the assessments were completed under section 143(3) of the act. thus, when the assessment was made the ito had before him not only the municipal value of the houses but also a list of the tenants, including the deputy director of agriculture. the particulars filed by the assessee also showed the rent received by him. the ito, however, chose to complete the assessment on the basis of the municipal value. from the order of the tribunal, it appears that the letter containing the details of the tenants and the.....
Judgment:

C.S.P. Singh, J.

1. The Tribunal has referred the following question of law for our opinion :

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessments in this case for the assessment years 1965-66 to 1967-68 were rightly reopened under Section 147(b)?'

2. The question relates to the assessment years 1965-66, 1966-67 and 1967-68. The assessment for the assessment year 1965-66 was completed on March 21, 1967, and the assessments for the assessment years 1966-67 and 1967-68 were completed on November 18, 1967, under Section 143(3) of the I.T. Act. Subsequently, on the basis of an audit report, notices under Section 148 for all the three years were issued to the assessee. The only ground for reopening the assessment was that a portion of the 'Raja Sadan' was let out by the assessee to the Deputy Director of Agricultural Department, U.P., on a monthly rent of Rs. 1,016, while the annual value of the house property was calculated on the basis of the municipal assessment. The assessee's contention was that the matter could not be reopened under Section 147(b). This has been rejected by the ITO, the AAC and the Tribunal. Side by side penal proceedings were also started on the footing that the assessee had concealed the particulars of his income. The Tribunal, however, found in favour of the assessee and directed the ITO to refund the penalty.

3. In order to appreciate the controversy, it will be necessary to state certain facts culminating in the original assessment orders. The assessee filed the details of the rents received from property and municipal value thereof in Part VI of the return. Since the space in Part VI of the return was not sufficient, he enclosed the particulars on a typed sheet along withthe return. In the course of the assessment, he also filed the details of rents received from the tenants. In the details submitted, the rent received from Raja Sadan was shown to have been received from the Deputy Director of Agriculture. These details appear to have been filed pursuant to enquiries made by the ITO and the assessments were completed under Section 143(3) of the Act. Thus, when the assessment was made the ITO had before him not only the municipal value of the houses but also a list of the tenants, including the Deputy Director of Agriculture. The particulars filed by the assessee also showed the rent received by him. The ITO, however, chose to complete the assessment on the basis of the municipal value. From the order of the Tribunal, it appears that the letter containing the details of the tenants and the rent received was sent to the ITO in a letter dated July 4, 1966. The question that arises for consideration is as to whether in these circumstances the assessment could be reopened under Section 147. There cannot be any doubt that it could not be reopened under Section 147(a) as the assessee was not guilty of any omission or non-disclosure of any material fact. In fact, the department did not seek to justify its action under Section 147(a). Section 147(b) permits the reopening of assessment in case the ITO receives information as a result of which he has reason to believe that the income has escaped assessment. It is settled, in view of the decision of the Supreme Court in CIT v. A. Raman & Co. : [1968]67ITR11(SC) , that 'information' in the context in which it occurs in Section 147(b) means instruction or knowledge derived from an external source, either as to facts or as to law. The information must have come into the possession of the ITO after the original assessment, but the mere fact that the information is such that it could have been obtained during the original assessment from an investigation of the materials on record or the facts disclosed thereby or from other inquiry or research into facts or law but was not, in fact, obtained, does not affect the jurisdiction of the ITO. One thing, however, is necessary and that is that the ITO should not have been aware of the fact which constitutes information for purposes of Section 147(b) at the time when the original assessment was completed, for, if he was conscious of the fact or law at the time of making the original assessment it would not be information as contemplated by Section 147(b). In the present case, there is no rinding by the Tribunal that the ITO was not aware of the rental value of Raja Sadan. In fact, on the material on record no such stand could have possibly been taken by the ITO, for the assessee had in his return specifically mentioned the rent received from his various properties and subsequently, on inquiry, by letter dated July 4, 1966, gave full particulars of the tenants occupying his various houses and the rent received from them. This information included the rent received from the Deputy Agricultural Officer for a portionof Raja Sadan. In these circumstances, it cannot be said that the ITO was not cognisant of the rent being received by the assessee from his property from various tenants. In spite of this he chose to fix the annual letting value by reference to the municipal assessment. In these circumstances, we are of the view that the ITO had no jurisdiction to reopen the assessment under Section 147(b).

4. We, accordingly, answer the question in the negative, in favour of the assessee and against the department. The assessee is entitled to costs which is assessed at Rs. 200.


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