Reassessment on fresh external information and writ discretion to deny relief where taxpayer conduct created unjust enrichment.

Reassessment under section 147(b) was considered sustainable where the Income-tax Officer received subsequent external information after the original assessment, including authoritative factual and legal clarification from revenue audit and the Ministry of Law. The material was treated as fresh information rather than a mere change of opinion, supporting reassessment jurisdiction. The article 226 remedy was also described as discretionary: relief may be refused where the petitioner's incorrect representation contributed to the allowance, and where interference would permit retention of an undeserved benefit or otherwise work injustice. On that basis, writ interference was declined.

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Issues: (i) Whether the reassessment notice was validly issued on the basis of "information" within section 147(b) of the Income-tax Act, 1961. (ii) Whether, even apart from jurisdiction, relief under article 226 should be refused because of the petitioner's conduct and the justice of the case.

Issue (i): Whether the reassessment notice was validly issued on the basis of "information" within section 147(b) of the Income-tax Act, 1961.

Analysis: The reassessment could be sustained only if the Income-tax Officer had received subsequent information from an external source after the original assessment. The return and representation made at the original assessment conveyed an incorrect factual basis, namely that the interest had been paid to the Government, whereas the true position was that the payment was credited to the petitioner's own provident fund account. The subsequent clarification by the revenue audit and the Ministry of Law supplied both the factual and legal position. Such advice and instructions from authorities connected with the functioning of the income-tax department were treated as external information for the purpose of section 147(b), and not as a mere change of opinion by the assessing officer.

Conclusion: The notice under section 148 read with section 147(b) was validly issued, and the reassessment jurisdiction existed.

Issue (ii): Whether, even apart from jurisdiction, relief under article 226 should be refused because of the petitioner's conduct and the justice of the case.

Analysis: The relief under article 226 is discretionary and need not be granted merely because an error or irregularity is shown. The petitioner's own incorrect representation led to the allowance of the deduction, and the Court treated the petitioner's conduct, the absence of equitable entitlement, and the avoidance of unjust enrichment at public expense as relevant considerations. In exercising writ discretion, the Court may refuse relief where interference would produce injustice or permit retention of an undeserved advantage.

Conclusion: Relief was properly declined in the exercise of writ discretion.

Final Conclusion: The reassessment notice was upheld and the writ petition was rejected, with the Court declining to interfere on both jurisdictional and discretionary grounds.

Ratio Decidendi: For the purpose of section 147(b), subsequent information may include authoritative legal or factual guidance received from competent governmental channels external to the assessing officer, and writ relief under article 226 may be refused where the petitioner's conduct and the interests of justice so require.

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