2005 (3) TMI 30

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....levant accounting year ended on March 31,1972. The assessment for the year 1972-73 was completed on an income of Rs. 95,871. In his return, the assessee had appended the following note: "Interest on money held in trust Rs. 87,869.85 to be assessed in the hands of Bhai Sunder Dass and his heirs as in the past." While completing the assessment on October 27, 1972, the Income-tax Officer (the ITO) did not discuss the assessability of the aforesaid amount either in the assessment order or in the proceedings before him. Thereafter, on July 9,1977, the Income-tax Officer reopened the assessment under section 147(b) of the Income-tax Act, 1961 (for short "the Act") giving the following reasons: "In the assessment year 1973-74, the Insp....

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....for reopening the assessment. On appeal, the Commissioner of Income-tax (Appeals) confirmed the Income-tax Officer's views and observed that information as contemplated by section 147(b) of the Act meant instructions derived from any external source and, therefore, the instructions of the Inspecting Assistant Commissioner for 1973-74 constituted information. In his second appeal, the assessee succeeded in having the assessment cancelled on the ground that the Income-tax Officer had not validly assumed jurisdiction under section 147(b) of the Act as there was no information but only a change of opinion on the part of the Income-tax Officer. While doing so, the Income-tax Appellate Tribunal referred to certain documents and held that th....

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.... there was a mere change of opinion?" The Full Bench of this court considered the expression "reason to believe" which appears in both clause (a) and clause (b) of section 147 of the Act. In Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996, the Supreme Court held that disclosure of a new fact may be information but that would not amount to realisation by the Income-tax Officer that he has committed an error while making the original assessment. The Full Bench rejected the view that merely because during the assessment proceedings relevant material was on record or could have been discerned after due diligence by the Income-tax Officer, it cannot be inferred that he must necessarily have deliberated over the material and for....