Judicial decision as information under reassessment law, and income can still escape assessment after earlier consideration.

A subsequent authoritative judicial decision can constitute "information" under section 34(1)(b) of the Income-tax Act, 1922, because the term covers both factual material and the correct state of the law. Income may also be treated as having "escaped assessment" even where it was returned and considered in earlier proceedings, if it was not ultimately brought to tax. On that basis, the reassessment framework under section 34(1)(b) was held legally available where a later legal ruling altered the basis of the earlier assessment.

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Issues: (i) Whether a subsequent judicial decision constitutes "information" within section 34(1)(b) of the Income-tax Act, 1922. (ii) Whether income that had been returned and considered in earlier assessment proceedings can still be said to have "escaped assessment" within section 34(1)(b).

Issue (i): Whether a subsequent judicial decision constitutes "information" within section 34(1)(b) of the Income-tax Act, 1922.

Analysis: The expression "information" in section 34(1)(b) was held to be wide enough to include not only factual material but also information as to the true state of the law. The context of the provision did not require a narrower construction, and the statutory language permitted reliance on authoritative judicial pronouncements that clarified the legal position.

Conclusion: Yes. A subsequent judicial decision can constitute "information" within section 34(1)(b), and the Privy Council decision relied upon by the Income-tax Officer was valid information.

Issue (ii): Whether income that had been returned and considered in earlier assessment proceedings can still be said to have "escaped assessment" within section 34(1)(b).

Analysis: The words "escaped assessment" were held not to be confined to cases of non-return or inadvertent omission. Even where a return had been filed and an assessment order had been made, part of the income could still be treated as having escaped assessment if it had not ultimately been brought to tax. The earlier proceedings and the subsequent reversal of the legal basis did not prevent section 34(1)(b) from applying.

Conclusion: Yes. The amount in question had escaped assessment within section 34(1)(b), so the reassessment was legally sustainable.

Final Conclusion: The reassessment proceedings were upheld because the later judicial ruling furnished information within section 34(1)(b) and the omitted income was treated as income that had escaped assessment.

Ratio Decidendi: Under section 34(1)(b) of the Income-tax Act, 1922, "information" includes authoritative judicial decisions on law, and income may be said to have escaped assessment even where it had earlier been returned or considered, if it was not ultimately brought to tax.

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