Sabyasachi Mukharji, J.
1. The subject-matter of challenge in this application under Article 226 of the Constitution is a notice dated 4th January, 1974, issued under Section 148 of the I.T. Act, 1961, for the assessment year 1969-70. It appears that the original assessment was completed some time in February, 1972. Prior to the completion of the original assessment, the assessee had written on 15th November, 1971, a letter in which the assessee had stated that in respect of premises at Sarat Bose Road, a suit against the tenant for vacating the premises in question had been filed and, as such, no rent had been accepted by the assessee since November, 1967. The assessee wrote this letter for the reason that no income was shown under the head ' Income from property ' in the return of the income for the assessment year 1969-70, though for the assessment year 1968-69 a part of it had been shown. According to the assessee, in the particulars of income with the statement annexed for the relevant year, the assessee had indicated the premises in question and along with that letter it stated the assessee had informed the ITO that there was a dispute with the tenant in respect of the premises in question and, as such, no rent was being realised. The position, therefore, seems to be that the assessee was informing the ITO prior; to the assessment that the assessee was the owner of the premises in question and that the said premises had been let out to certain tenants who were due to pay rent at'Rs. 100 per month but the same had not been accepted by the assessee because there was dispute with the tenants and the landlord had filed a suit and the tenants had been depositing rent with the Rent Controller. These facts, in my opinion, were brought to the notice of the IIP if the version of the assessee in thisapplication has to be accepted, both by the letter written on behalf of the assessee as well as by the personal interview which the assessee's accountant had with the ITO at the time of assessment. The accountant, who alleges to be the accountant, present at the time of the assessment and whose name appears in the assessment order has affirmed an affidavit to this effect. This position has not been controverted by any affidavit by the ITO who had made the original assessment nor by any affidavit of any one who was competent to advert to these facts. The ITO who has issued the impugned notice has also not made any affidavit. But the recorded reasons of the ITO for reopening the assessment in question were produced before me. The said reasons are as follows :
'Rent received @ Rs. 100 per month from 40, Sarat Bose Road, Calcutta, was not shown in the return. The rent was deposited by the tenant to the Controller of Rent. The assessee has filed a suit of ejectment against the tenant and as such it did not include the rent paid by the tenant. As per Section 23(1) the property income is to be considered on deemed basis and as the company follows the mercantile system of accounting, it has escaped assessment. Hence issue notice under Section 148 to the assessee.'
2. On behalf of the revenue it was contended that under Section 23 of the I.T. Act, 1961, the fact whether rent was being realised from the tenant or not was irrelevant because the rent income was to be assessed on deemed basis and that is the position of law. Counsel for the revenue drew my attention to the observations of this court in the case of Sri Sri Iswar Radha Govinda Jew v. CIT : 84ITR150(Cal) . As, at this stage, I am not concerned with the validity of this position, I will assume that income of the property which is to be assessed on the deemed basis has escaped assessment.
3. Next question, however, is whether such income, assuming that the same has escaped assessment, was due to the omission or failure of the assessee to disclose either truly or fully the material facts relevant for the assessment. It is for the ITO to draw the necessary inference from the facts indicated in the return or facts disclosed to him or gathered by him. This position is well settled. From the statement of facts, referred to hereinbefore, and jn the absence of any affidavit on behalf of the ITO, who made the original assessment or from any person who had knowledge about the making of the relevant assessment and in view of the recorded reasons, in my opinion, it must be accepted that there was no failure or omission on the part of the assessee to disclose fully and truly all relevant or material facts entitling the ITO to reopen the assessment under Clause (a) of Section 147 of the I.T. Act, 1961. Reliance in this connection may be placed on the unreported decision of mine in C.R. No. 1097(W) of 1973(Smt. Minoli Holder v. ITO) judgment of which was delivered on 8th September, 1975 [Since reported in : 115ITR471(Cal) ]. But, inasmuch as the notice in question has been issued within the period of four years from the completion of the assessment, it is necessary to consider whether the impugned noticed can be sustained under Clause (b) of Section 147 of the I.T. Act, 1961. The circumstances under which Clause (b) of Section 147 of the I.T. Act, 1961, can be attracted have been the subject-matter of review by several decisions of the Supreme Court and of the High Courts. It is not necessary to refer to most of the decisions. But learned counsel for the assessee drew my attention to certain observations of mine in the case of Diamond Sugar Mills Ltd. v. ITO : 89ITR171(Cal) , where I have held that in order to be information in terms of clause (b) of Section 147 of the I.T. Act, 1961, it was necessary that it must be knowledge or instructions concerning facts or particulars or as to the law relating to a matter bearing on the assessment; -such knowledge or instructions must come into the possession of the ITO after the previous assessment; the knowledge or information must be such which would lead to the formation of the belief that the income of the assessee had escaped assessment or had been under-assessed ; the proximate or immediate source of such information or knowledge must be external; but the fact that such knowledge or information could have been derived from the previous assessment from an investigation of the materials on record or facts disclosed thereby or from other enquiry or in fact not derived would not prevent such knowledge or instructions from being information in terms of the section; in case where the ITO on his own initiative and on materials which were before him at the time of original assessment changed his opinion and came to a different conclusion he would not be acting on information in terms of this section. This view was again reiterated by me in the case of ITO v. Panama Pvt. Ltd. : 97ITR210(Cal) . Counsel for the revenue also drew my attention to certain observations in the case of Kalyanji Mavji & Co. v. CIT : 102ITR287(SC) , where the Supreme Court was considering a case where in the original assessment for the assessment year 1956-57 a sum of Rs. 43,116 being interest paid by the assessee-firm on amounts borrowed by it, was allowed as deduction. During the course of the assessment proceedings for the assessment year 1958-59, the ITO discovered that the appellant had not utilised the entire borrowed money for the purpose of its business but had given interest-free loans to its partners for clearing up their income-tax dues. The ITO reopened the assessment for 1956-57 under Section 34(1)(b) of the Indian I.T. Act, 1922, and disallowed the interest paid. The Appellate Tribunal held that the ITO had merely changed his opinion on the basis of the Very materials that were before him when the original assessment was made and that was not sufficient to attract Section 34(1)(b). On a reference, the High Courtheld that the reassessment was valid in law as the information on the basis of which the officer sought to reopen the assessment was based on subsequent facts as also on the materials of original assessment revealed by more careful and closer investigation. There the Supreme Court observed that Section 34(1)(b) of the 1922 Act would apply in the following cases :
(i) that the information is as to the true and correct state of law derived from relevant judicial decisions;
(ii) where in the original assessment the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the ITO;
(iii) where the information is derived from an external source of any kind--such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of the original assessment; and
(iv) where the information might be obtained even from the record of the original assessment from the investigation of the materials on the record or the facts disclosed thereby or from other enquiry or research into facts or law.
4. The Supreme Court, however, reiterated that where the ITO got no subsequent information but merely proceeded to reopen the original assessment without any fresh facts or materials or without any enquiry into the materials which formed part of the original assessment, Section 34(1)(b) of the Indian I.T. Act, 1922, would have no application. If this is the ratio of the decision of the Supreme Court then in the facts and in the circumstances of the case when there is no subsequent information as such but a new view of the old facts, the reopening would not be justified under Clause (b) of Section 147 of the I.T. Act, 1961. As Mr. Justice Chandrachud, as the learned Chief Justice then was, in the decision of the Bombay High Court in the case of CIT v. Hoick Larsen : 85ITR467(Bom) has observed that the distinction consists in a change of opinion unsupported by subsequent information on the one hand and a change of opinion based on information subsequently obtained, on the other. If there is only a mere change of opinion it cannot be a basis of reopening under Clause (a) of Section 147 of the I.T. Act, 1961. My attention was also drawn to the decision in the case of R.K. Malhotra, ITO v. Kasturbhai Lalbhai : 1975CriLJ1545 . There the Supreme Court was concerned with the question whether the views of the audit department would constitute information. The views of the audit department would constitute information. The views of the audit department undoubtedly came from an external source. Therefore, it could be considered to be information which would justify action umder Clause (b) of Section 147 of the I.T. Act, 1961.
5. In this case as there is no evidence of any information subsequently coming into the possession of the ITO, in my opinion, Clause (b) of Section 147 of the I.T. Act was not attracted by the fact that a subsequent ITO having jurisdiction over the file had a different and perhaps a more correct view of the law looking at the old facts from a different angle of information in terms of Section 147 of the I.T. Act, 1961. If that is the position then the impugned notice cannot be sustained and must be quashed.
6. There will, therefore, be an order quashing the notice dated the4th January, 1974, in respect of the assessment year 1969-70 and the respondents are restrained from giving effect to the said notice. The rule nisiis made absolute to the extent indicated above. If any assessment hasbeen made pursuant to the said notice, the same is also quashed and setaside. In the facts and circumstances of this case, however, there will beno order as to costs. Operation of this order will be stayed for a period ofsix weeks.