Reopening of assessment based on external judicial information can be valid even if underlying facts were earlier on record.

Reopening of assessment was valid where the Income-tax Officer acted on external information from judicial decisions in related proceedings showing that the assessee's interest income was received as a financier and not as a partner. That material was not a mere change of opinion on facts already considered; it constituted information within the reopening provision even though the underlying facts could earlier have been found on the record. The challenge to jurisdiction therefore failed, and the assessment could be reopened on that basis.

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Issues: Whether the Income-tax Officer had jurisdiction to reopen the assessment under section 34(1)(b) of the Income-tax Act on the basis of information that came from the Tribunal and High Court decisions in another assessee's proceedings.

Analysis: The material that prompted reopening was not a mere change of opinion on facts already considered in the original assessment. The later judicial decisions in the related proceedings supplied the Income-tax Officer with external information showing that the interest received by the assessee was not received as a partner but as a financier. Such information, even if it could have been discovered earlier from the record, was nevertheless information within the meaning of the reopening provision and could validly form the basis for the belief that income had escaped assessment or been under-assessed.

Conclusion: The reopening was valid and the assessee's challenge to jurisdiction failed.

Final Conclusion: The assessment could be reopened on the basis of external information emerging from the related proceedings, and the appeal was liable to be dismissed.

Ratio Decidendi: Information for reopening assessment may consist of knowledge derived from an external source, including a judicial decision in another proceeding, even if the underlying facts were earlier available on the record but were not in fact appreciated at the original assessment.

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