Law:

Section:

Section 147 of the Income-tax Act, 1961 – Income escaping assessment – Information – Position prior to 1-4-1989 – Assessment year 1969-70 – Whether information from external source of any kind which includes discovery of new and important matters or knowledge of fresh facts not present at time of assessment, would satisfy conditions of applicability of section 147(b) – Held, yes – Whether an information anonymous is information from unknown authorship but none less it constitutes "information" – Held, yes - Whether proceedings before commencement of re-assessment proceeding-are only administrative in character and there is no requirement by law that there should be disclosure of materials to assessee at that stage – Held, yes FACTS For the assessment year 1969-70, the assessee-company was assessed under section 143(3) by the ITO disallowing certain claims. On appeal, the AAC reduced the disallowance and the assessee thereupon become entitled to certain refund and the same was given effect to by the ITO. The assessee thereafter preferred an appeal to the Tribunal against disallowance of the remuneration paid to the director and by its order the Tribunal allowed the remuneration, reducing the total income and increasing the refund. All on a sudden, the ITO issued a notice under section 148 stating that he had reason to believe that the income of the company for the aforesaid assessment had escaped assessment within the meaning of section 147. On writ, the assessee contended that there was no omission or failure on its part to disclose truly and fully all primary facts necessary and material for assessment. The revenue filed affidavit in opposition contending that an anonymous petition was received in the income-tax department pointing out various irregularities in the accounts of the assessee which prima facie also led to the belief that the assessee's income has escaped assessment. The Single Judge held that there was no material to believe that there was failure or omission on assessee's part to disclose fully and truly all material facts. He, however, held that in the anonymous petition there might be some information of such nature which prompted the ITO to…

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