Law:

Section:

Section 147, read with section 148, of the Income-tax Act, 1961 - Income escaping assessment - Information - Position prior to 1-4-1989 - Assessment year 1958-59 - Whether since revenue audit and Ministry of Law have power and duty to guide functioning of ITO, advice and instructions given by them have to be regarded as 'information' within meaning of section 147(b) - Held, yes - Petitioner, who belonged to Indian Civil Services, took loan from his provident fund as a non-refundable advance and spent it in buying and reconstructing a house - Subsequently he sold said house without obtaining prior permission of Government - As he parted with possession of house contrary to rule 7E(1) of Indian Civil Service Provident Fund Rules, sum withdrawn by him became payable together with interest thereon as subscriber to fund under rule 7E(2) of said Rules - ITO completed assessment on basis of assessee's representation that interest paid on withdrawal from provident fund account was compulsorily payable to accountant-General, Central Revenue and as such wholly and exclusively connected with purchase and sale of house property for purpose of computation of capital gains under section 48 but subsequently from information coming from audit department that money paid by petitioner by way of interest went into his own account in provident fund and remained his own money and there was thus no expenditure at all incurred by him in making said payment, issued notice to petitioner under section 148 - Whether, on facts, ITO received information within meaning of section 147(b) and, therefore, he had jurisdiction to issue impugned notice - Held, yes FACTS The petitioner, who belonged to the Indian Civil Service, took a loan of Rs. 65,000 from his provident fund as a non-refundable advance in 1958-59 and spent it along with his own Rs. 13,000 in buying and reconstructing a house He sold the said house for Rs. 1,25,000 without obtaining the prior permission of the Government. As the petitioner parted with the possession of the house contrary to rule 7E(1) of the Indian Civil Service Provident Fund Rules, the sum withdrawn by him became payable together with interest thereon amounting…

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