Reopening on appellate information upheld where later Tribunal findings showed income was under-assessed.

A subsequent appellate finding disclosing that the assessee's profits were higher than originally assessed can amount to "information" under section 34(1)(b) of the Indian Income-tax Act, 1922. The provision required the Income-tax Officer to have information giving reason to believe that income had escaped assessment or been under-assessed, and information originating from an appellate authority did not lose that character. On that basis, the Tribunal's earlier statements were capable of supporting reopening and reassessment, and the Income-tax Officer had jurisdiction to proceed under section 34(1)(b).

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Issues: Whether the statements recorded by the Income-tax Appellate Tribunal constituted "information" within the meaning of section 34(1)(b) so as to justify the Income-tax Officer's jurisdiction to reopen and reassess the assessee's income for the relevant assessment years.

Analysis: Section 34(1)(b) required the Income-tax Officer to possess information leading to a reason to believe that income had escaped assessment or had been under-assessed. The Tribunal's statements in the earlier appeals disclosed higher assessable profits than those originally taken by the Income-tax Officer, and those statements came into existence after the original assessments. Such material was capable of amounting to information from an external source for the purpose of reopening, and the fact that the information came from the Tribunal did not detract from its character as information under the provision.

Conclusion: The Tribunal's statements did constitute information, and the Income-tax Officer had jurisdiction to proceed under section 34(1)(b). The answer is in the affirmative and against the assessee.

Ratio Decidendi: A subsequent appellate finding disclosing that income was under-assessed can constitute information for reopening under section 34(1)(b) of the Indian Income-tax Act, 1922, even when the information originates from an appellate authority.

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