Madras High Court
Madras Race Club Charitable Trust vs Commissioner Of Income-Tax on 11 June, 1998
Equivalent citations: [2000]245ITR240(MAD)
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
JUDGMENT R. Jayasimha Babu, J.
1. The question referred to us at the instance of the assessee is as to whether, on the facts and circumstances of the case, the Tribunal was right in holding that the reopening of assessment under Section 147(b) is correct.
2. The assessment for the assessment year 1975-76 concerning the assessee's income was reopened by the Income-tax Officer on the ground that at the time he completed the assessment he was not aware of, and had not taken note of the decision of the apex court in the case of Indian Chamber of Commerce v. CIT [1975] 101 ITR 796, a decision which was rendered by the apex court on September 17, 1975. The assessment order was made on April 21, 1976. The reassessment effected by the Income-tax Officer after so reopening the assessment was set aside by the Commissioner on the ground that the decision relied on by the Income-tax Officer for reopening the assessment was available even before the assessment was completed and therefore could not constitute "information" justifying the reopening of the assessment.
3. The Tribunal on an appeal by the Department has rightly set aside the decision of the Commissioner and held that it is not the date of publication of the judgment that is material but what is material is as to whether the Income-tax Officer when completing the assessment was aware of and had taken note of the same. It has held that the Income-tax Officer was not aware of the judgment when the assessment was completed.
4. Learned counsel for the Revenue invited our attention to the decision of the Supreme Court in the case of A. L. A. Firm v. CIT [1991] 189 ITR 285, wherein it was held that though the Income-tax Officer at the time of the original assessment had looked at the facts and accepted the assessee's contention but had obviously missed to take the law laid down by the High Court earlier, and there was nothing to show that the case was brought to his notice, it was open to the Income-tax Officer when he subse quently became aware of the decision to initiate proceedings under Section 147(b), as the binding decision of the court which had not been applied while making the original assessment would be the material which constituted information on the basis of which the assessment could be reopened.
5. It is not the case of the assessee here that the decision of the Supreme Court in the case of Indian Chamber of Commerce [1975] 101 ITR 796, had been brought to the notice of the Income-tax Officer when he made the original assessment order. It is also not the case of the assessee that the Income-tax Officer had knowledge of the decision when he made the order. The Tribunal has recorded a finding that the Income-tax Officer was not aware of the decision when the original order of assessment was made.
6. The Tribunal, therefore, in our opinion, was right in holding that the judgment of the apex court in the case of Indian Chamber of Commerce [1975] 101 ITR 796, did constitute information justifying the reopening of the assessment.
7. The question referred to us is therefore answered in favour of the Revenue and against the assessee. In the circumstances, there will be no order as to costs.