Reassessment based on unconsidered binding precedent upheld where the original assessment overlooked a relevant Supreme Court decision.

Reopening under section 147(b) was valid where the assessing officer, at the time of the original assessment, had not taken note of a binding Supreme Court decision relevant to the assessment. The controlling question was whether that judicial decision had in fact been brought to the officer's notice or was otherwise within his knowledge when the assessment order was made, not merely whether it had been published earlier. A subsequently relied upon binding decision can constitute information for reassessment if it was not applied in the original assessment. The reopening was therefore upheld and the reference was answered in favour of the Revenue.

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Issues: Whether the reopening of the assessment under section 147(b) of the Income-tax Act, 1961 was valid on the ground that the Income-tax Officer was unaware of a binding decision of the Supreme Court when the original assessment was completed.

Analysis: Reopening under section 147(b) is justified where, at the time of the original assessment, the Income-tax Officer had not taken note of a binding judicial decision relevant to the assessment. The material consideration is not the date of publication of the judgment but whether the decision had in fact been brought to the notice of the assessing officer or was otherwise within his knowledge when the assessment order was made. A subsequently relied upon binding decision may constitute information for reopening if it had not been applied in the original assessment.

Conclusion: The reopening of the assessment was held to be valid, and the question referred was answered in favour of the Revenue and against the assessee.

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