R.M. Yeole vs Income-Tax Officer on 13 March, 1984
...therefore, when Section 147(6) of the income-tax Act is read as referring to 'information' as to law, what is contemplated is information as to the law created by a formal source. It is law, we must remember, which, because it issues from a competent Legislature or a competent judicial or quasi-judicial authority, influences the course of the assessment and decides any one or more of those matters which determine the assessee's tax liability. (p. 1002)
Following the ratio of these rulings, the Madhya Pradesh High Court in the case of Arvind Kumar v. ITO [1983] 13 Taxman 291 has held that decisions of superior authority under the Act constitute information relating to law for reopening assessment under Section 147(6). Now in the instant case, the AAC on consideration of the facts and evidence regarding the transaction of the sale of the truck found that the correct legal position was that the sale was concluded on the transfer of the truck to the purchaser, the registration of transfer being recorded in the RTO's office, and it was only then that profit could be said to have arisen so as to be assessable under Section 41(2) and that since these events occurred in the accounting year relevant to the assessment year 1978-79, the profit was assessable for that year and not for 1977-78. Bearing the principles laid down by the Supreme Court in mind, we have no doubt that this finding of the AAC constituted information for the purpose of Section 147(6) providing reason to believe for the ITO to take assessment proceedings under that section. We, therefore, hold that the AAC rightly held the impugned assessment to be valid but for the reasons recorded in this order.