TaxTMI 
TaxTMI 
1994 (1) TMI 116
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....) of the Act in the light of the judgment of the Supreme Court in the case of Indian & Eastern Newspaper Society v. CIT [1979] 119 ITR 996. 2. Original assessment in this case is stated to have been completed on 20-1-1976. Later on, reassessment was made on 9-11-1978 after issue of notice under section 148 read with section 147(b) on 18-3-1977. Neither the assessment records nor the original assessment order, nor even a copy of the reasons recorded by the ITO for reopening the impugned assessment could be filed before us by either of the sides on the ground of non-availability of relevant records due to misplacement of the same. It, however, appears from a perusal of the impugned order of the CIT(A) that the reopening was based on a mistak....
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....e on the decision of the Supreme Court in the case of R. K. Malhotra, ITO v. Kasturbhai Lalbhai [1977] 109 ITR 537. In this particular judgment, the Supreme Court had held the Audit Department to be the proper machinery to scrutinise the assessments of the ITOs and point out the errors, if any, in law. The Supreme Court thus finally concluded that the intimation received by the ITO from the Audit Department constituted 'information' within the meaning of section 147(b) in consequence of which the ITO could reopen the assessment. Be that as it may, it has however been found that the larger bench of the Supreme Court in its subsequent judgment in the case of Indian & Eastern Newspaper Society disapproved of the earlier judgment in the case o....
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....ically limited the question to considering the correctness of the decision of the Supreme Court in Indian & Eastern Newspaper Society's case and directed the matter to be posted before a larger Bench. However, to the best of our knowledge, no decision by the said larger Bench of the Supreme Court against its abovementioned judgment in Indian & Eastern Newspaper Society's case seems to have come as yet. Hence, for the present, the judgment of the Supreme Court in Indian & Eastern Newspaper Society's case has got to be considered to be holding the field. 6. The learned DR has also relied on the following two decisions: (i) Zoraster & Co. v. CIT [19871 163 ITR 858 (Raj.) and (ii) M.A. Murugappan v. CWT [1985] 153 ITR 626 (Mad.) On the oth....
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.... Madras High Court, in its judgment in M.A. Murugappan's case, on the other hand, upheld the validity of reopening proceedings on the basis of an audit report pointing out certain obvious mistakes on the part of the WTO in applying the clear provisions of law, based on incorrectness on the part of the WTO as to certain basic facts. For example, the WTO had granted 50% deduction of tax by treating the assessee as non-resident whereas the Audit pointed out that the assessee was actually a resident but not ordinarily resident and hence, was not entitled to the abovementioned deduction applicable to the case of a non-resident only. Certain other factual errors were also pointed out by the audit. 8. In the case of Duncan Services Ltd. however, ....