1966-VIL-177-KER-DT

Equivalent Citation: [1967] 64 ITR 218

KERALA HIGH COURT

Date: 22.08.1966

UNITED MERCANTILE CO. LTD.

Vs

COMMISSIONER OF INCOME-TAX

BENCH

M. S. MENON C. J.-

JUDGMENT

and : " We see no justification to accept the contention of the learned counsel for the assessee that to constitute information within the meaning of section 34, it must be wholly extraneous to the record of the original assessment. We hold that the mistake apparent on the face of the order of assessment itself constitutes information : whether someone else gave that information to the Income-tax Officer or whether he informed himself is immaterial. We are further of opinion that, in the circumstances of this case, the availability of the powers vested in the Income-tax Officer by section 35 did not bar recourse to the jurisdiction vested in him by section 34. The initiation of proceedings under section 34 was, in our opinion, valid. "

In Maharaj Kumar Kamal Singh v. Commissioner of Income-tax (1), the Supreme Court said :

               " It is clear that two conditions must be satisfied before the Income-tax Officer can act under section 34(1)(b). He must have information in his possession, which, in the context, means that the relevant information must have come into his possession subsequent to the making of the assessment order in question and this information must lead to his belief that income chargeable to income-tax has escaped assessment for any year, or that it has been under-assessed or assessed at too low a rate or has been made the subject of excessive relief under the Act. "

             " To inform " means " to impart knowledge " and a detail available to the Income-tax Officer in the papers filed before him does not by its mere availability become an item of information. It is transmuted into an item of information in his possession only if, and only when, its existence is realised and its implication are recognised.

We consider the awareness of the Income-tax Officer, for the first time, after the assessment order of the 19th November, 1957, that the bonus shares were issued not out of premiums received in cash and the consequent result in the light of the Finance (No. 2) Act, 1957, as information within the meaning of that expression as used in section 34(1)(b) of the Indian Income tax Act, 1922. It follows that we should answer the question referred in the affirmative, that is, against the assessee and in favour of the department. We do so, but, in the circumstances of the case, without any order as to costs.

A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal as required by sub-section (3) of section 66 of the Indian Income-tax Act, 1922.

Question answered in the affirmative.

 

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