Reassessment on later legal information is valid where the original assessment ignored rule-based treatment of a non-resident shipping company.

Reassessment under section 147(b) was held valid where the original assessment had not applied rule 10 or the binding Board instructions governing assessment of a non-resident shipping company. Later communication of the correct legal framework constituted information enabling reopening, because the earlier assessment had ignored the governing rule rather than taken a conscious view on the same material. The reopening was therefore not a mere change of opinion. The authorities relied on the distinction from Simon Carves Ltd. and the principle in Indian & Eastern Newspaper Society to support valid reassessment on subsequently received legal information.

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Issues: Whether the reassessment under section 147(b) of the Income-tax Act, 1961 was valid on the basis of information subsequently brought to the Income-tax Officer regarding the correct method of assessment of a non-resident shipping company under rule 10 of the Income-tax Rules, 1962.

Analysis: The original assessment did not show any real application of mind to rule 10 or to the binding Board instructions explaining the method of assessment of non-resident shipping companies. The reassessment was not founded merely on a different view of the same material, but on later information that the earlier assessment had ignored the proper legal framework governing such cases. The principles in Simon Carves Ltd. did not apply because the original assessment had not adopted a conscious method under the rule, and the decision in Indian & Eastern Newspaper Society did not bar reopening where the Income-tax Officer was later informed of the correct legal position.

Conclusion: The reassessment was valid and was rightly reopened under section 147(b); the assessee's challenge to the reopening failed.

Final Conclusion: The departmental appeal succeeded on the jurisdictional issue, and the matter was sent back for fresh disposal on the merits before the first appellate authority.

Ratio Decidendi: Where the original assessment was made without considering the governing rule and binding instructions, later communication of that legal position constitutes information enabling valid reopening under section 147(b); such reopening is not a mere change of opinion.

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