Reassessment based on later legal ruling upheld where no proof showed changed cultivation facts for agricultural income exemption.

Subsequent authoritative interpretation of the law can constitute information supporting reassessment when an earlier exemption rested on a legal footing later displaced. The prior assessment of tendu leaf income had treated pruning of wild growth as agricultural income, but the later Supreme Court ruling that spontaneous growth without basic agricultural operations is not agriculture undermined that basis. Where the assessee asserted that later leases involved changed facts, the burden lay on it to prove planting or other basic cultivation. No satisfactory evidence of such change was produced, so the factual finding in favour of escaped assessment stood and the reassessment was upheld.

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Issues: Whether reassessment under section 34(1)(b) was valid on the basis of a subsequent judicial decision changing the law on agricultural income, and whether the assessee had shown that the facts had changed so as to prevent the Income-tax Officer from having reason to believe that income had escaped assessment.

Analysis: A subsequent authoritative decision may constitute information as to the true state of the law and can support action under section 34(1)(b) where an assessment was earlier made on a different legal footing. The earlier assessment of the assessee's tendu leaf income had proceeded on the basis that pruning of wild-growth plants could yield exempt agricultural income. After the Supreme Court ruled that pruning of spontaneous growth without basic agricultural operations does not amount to agriculture, the legal foundation of the earlier exemption disappeared. Since the assessee claimed that the factual basis had changed under the later leases, the burden lay on it to prove the change. No satisfactory evidence of planting or basic cultivation was produced, and the Income-tax Officer's finding on that factual question could not be displaced in these proceedings.

Conclusion: The reassessment under section 34(1)(b) was valid, and the challenge to jurisdiction failed.

Ratio Decidendi: A subsequent authoritative decision on the law may constitute information justifying reassessment under section 34(1)(b), and where the assessee asserts a change in the underlying facts, the burden lies on the assessee to prove that change.

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