Reassessment based on later awareness of material fact and law is valid when it is not a mere change of opinion.

The expression "information" in section 34(1)(b) of the Indian Income-tax Act, 1922 includes both facts and law. A material fact already recorded in the assessment papers does not cease to be information because the Income-tax Officer earlier failed to appreciate its significance. Where the officer later becomes aware for the first time of the factual position and its statutory effect, and that awareness leads him to believe excessive relief was granted, the reassessment is not a mere change of opinion. On those facts, the reassessment was valid and the reference was answered in favour of the Revenue.

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Issues: Whether the reassessment under section 34(1)(b) of the Indian Income-tax Act, 1922 was valid when the Income-tax Officer, after the original assessment, first realised that bonus shares had been issued not out of premiums received in cash and that the Finance (No. 2) Act, 1957 reduced the rebate available.

Analysis: The expression "information" in section 34(1)(b) includes information as to facts as well as law. A detail already present in the assessment papers does not cease to be information merely because the Income-tax Officer did not earlier appreciate its significance. What matters is that the relevant fact and its legal effect came to his knowledge for the first time after the original assessment, leading him to believe that excessive relief had been granted. The case was therefore not a mere change of opinion but a case of subsequent awareness of a material fact and its statutory consequence.

Conclusion: The reassessment was valid. The answer to the reference was in the affirmative, against the assessee and in favour of the Revenue.

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