Meaning of "information" under income-tax reopening law treated as a question of law requiring reference

The meaning of "information" under section 34(1)(b) of the Indian Income-tax Act, 1922, was treated as a question of law because judicial opinion on whether a change of opinion by the Income-tax Officer could qualify as information was conflicting. At the section 66(2) stage, the Court held that it was enough to show that a legal controversy arose from the Tribunal's order; the Court was not deciding the issue on merits. On that basis, the Tribunal's refusal to state a case was unsustainable, and a reference to the High Court was required.

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Issues: Whether a question of law arose from the Tribunal's order so as to require a reference under section 66, and whether the notice issued under section 34(1)(b) was based on "information" or merely on a change of opinion.

Analysis: The dispute turned on the meaning of "information" in section 34(1)(b) of the Indian Income-tax Act, 1922. The Court noted the conflicting judicial views on whether a change of opinion by the Income-tax Officer could amount to information, and referred to authoritative decisions recognizing that a later judicial pronouncement or other relevant material may constitute information. At the stage of section 66(2), the Court was concerned only with whether a question of law arose from the Tribunal's order and not with answering that question on merits. In that context, the existence of a legal controversy on the scope of "information" was sufficient to show that the Tribunal's refusal to make a reference could not be sustained.

Conclusion: A question of law did arise, and the Tribunal ought to have stated the case and referred the question of law to the High Court. The petition succeeded in favour of the Revenue.

Ratio Decidendi: Where the meaning of "information" under section 34(1)(b) is the subject of conflicting judicial opinion, the issue is one of law and not merely of fact, and a reference under section 66 must be made when such a question arises from the Tribunal's order.

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