1. The assessee, Srimati Ananthalakshmi Animal, is the wife of S. S. Ramudu Aiyar. He was a partner of Sri Kodandarama Spinning Mills, Madurai with a substantial income of his own. In the assessment year 1943-44, the assessee submitted a return which showed an income of Rs. 40,387 in the accounting year ending with 13-4-1943, which, she declared, constituted her profit that year from the trade she had carried on in cotton. She claimed that she had carried on that business with the help of her brother Nageswara Aiyar as her clerk and power-of-attorney agent. He was also an employee of Sri Kodandarama Spinning Mills. The Income-tax Officer held on the facts placed before him that the business and the income belonged to Ramudu Aiyar and included it in his taxable income.
The Appellate Tribunal, to which Ramudu Aiyar ultimately appealed, held, on 3-11-1945 that the business and the income belonged only to Ramudu Aiyar's wife. The Income-tax Officer thereupon initiated proceedings under Section 34 of the Income-tax Act, and on 15-1-1948, he assessed her to income-tax on her income for 1942-43, the main item of which was the profits of the business in cotton. The contention of the assessee, that the finding of the Tribunal in the appeal preferred by Ramudu Aiyar did not constitute definite information and that it did not lead to any discovery within the meaning of Section 34 of the 'Act was overruled by the departmental authorities, and the Tribunal agreed with them. On the application of the assessee, the Appellate Tribunal stated a case and referred to this Court under Section 66(1) of the Act, the following question :
'Whether the assessment proceedings under Section 34 were validly initiated.'
The relevant portion of Section 34 of the Act as it stood in the assessment year ran :
'If in consequence of definite information which has come into his possession the Income-tax Officer discovers that income, profits or gains chargeable to income-tax have escaped assessment in any year .... the Income-tax Officer may .... serve on the person liable to pay tax on such income, profits or gains. , . . notice . . . .'
Despite the frame of the question referred to this Court, the real question that arises for determination is, whether in the circumstances of this case the order of the Appellate Tribunal dated 3-11-1945 constituted definite information as a consequence of which the Income-tax Officer'' discovered that the income of the assessee in 1942-43 had escaped assessment.
2. The Income-tax Officer recorded in his assessment order dated 15-1-1948':
'The assessee's income from trade in cotton amounting to Rs. 40,387 was originally included in the total income of her husband S. S. Ramudu Aiyar and assessed in his hands. On appeal, the Appellate Tribunal deleted the sum included from the total income of her husband.
This definite information which has come into my possession subsequently has led to the discovery that the income of the assessee has escaped assessment in her hands. Hence notices under Section 34 were issued to the assessee.'
Did this finding satisfy the requirements of Section 34 as it stood in the relevant assessment year is the question.
3. Though what constitutes 'definite information' within the meaning of Section 34 must necessarily depend upon the circumstances of each case, and there can be no rule of universal application in our opinion, the rule laid down by a Bench of this Court in the Commissioner of Income-tax v. S. Khaderwalli Sahib, : AIR1951Mad994 (A) governs this case, and the question referred to us must be answered in favour of the assessee.
4. It was a well-settled proposition of law to which Viswanatha Sastri J. referred in : AIR1951Mad994 (A).
'It is clear that mere change of opinion based on the same facts and figures which were present to the mind of the Income-tax Officer at the time of the original assessment does not amount to discovery.'
The learned Judge observed further :
'The discovery must be the result of definite information, that is to say, new information that has come to the knowledge of the Income-tax Officer. The Income-tax Officer cannot act under this section even though the tax payer has escaped assessment if he is acting on information which was already in his possession and within his knowledge. Unless it can be said that there is fresh information which was not in his possession at the time when the original assessment was made, action under Section 34 of the Income-tax Act is not justified. The mere fact that a different opinion on the same facts was taken by somebody else is not definite information leading to discovery on the part of the Income-tax Officer who was in possession of the same facts and entire facts at the time of the original assessment.'
We respectfully agree with these observations.
5. The learned counsel for the respondent contended that the 'definite information' required by Section 34 would also include a decision on matters of law or on matters of mixed fact and law rendered by a competent appellate authority. It is not necessary for us to consider in this case under what circumstancess a provision of law which had been overlooked in the original assessment or an authoritative pronouncement of law by a Court either with reference to the same assessee or another assessee subsequent to this original assessment would amount to definite information within the meaning of Section 34. In the case before us, the question for decision all through was one of fact : whose was the income, the assessee's or her husband's The Income-tax Officer applied his mind and adjudicated upon the question at issue, and that decision on a question of fact was reversed as erroneous by a competent Appellate authority. That appellate decision with nothing more will not amount to definite information within the meaning of Section 34 of the Act to enable the Income-tax Officer to exercise the powers conferred on him by Section 34 with reference to the same set of facts.
In this case the order of the Income-tax Officer dated 15-1-1948 made it clear that the only basis on which he invoked Section 34 was the decision of the Appellate Tribunal. He realised he had committed a mistake. The facts for consideration remained the same. Only his erroneous decision was eliminated. It was nothing more than a change of opinion on the same set of facts, though the change in this case was apparently forced by the decision of the Tribunal There was no definite information or any discovery in consequence of such information within the meaning o Section 34.
6. The question is answered in the negative and in favour of the assessee, The assessee will be entitled to the costs of this reference. Counsel's fee Rs. 250.