Law:

Section:

Section 147(b) of the Income-tax Act, 1961-Reassessment- Information-Assessee-society let out on rent some portions of building to its members and to outsiders-Income assessed as income from business-Internal audit party of Income-tax department opined such income assessable as income from house property-ITO reopened assessment under section 147(b)-AAC held that section 147(b) not applicable but tribunal sustained reopened proceedings-Case referred by tribunal to supreme court under section 257-Whether view expressed by internal audit party on a point of law could be regarded as "information" for purposes of initiating proceedings under section 147(b)-Held no Facts The assessee, Indian & Eastern Newspaper Society, is professional association of newspapers established with the principal object of promoting the welfare and interest of all newspapers. The assessee owns a building in which a conference hall and rooms are let out on rent to its members as well as to outsiders. Certain other services are also provided to the members. The, income from that source was assessed to tax all along as income from business including the assessment years 1960-61, 1961-62, 1962-63 and 1963-64. In the course of auditing the income-tax records pertaining to these assessment years, the internal audit party of the Income-tax Department expressed the view that the money realised by the assessee on account of the occupation of its conference hall and rooms should not have been assessed under the head "Profits and gains of business or profession" but assessed under the head "Income from house property". The ITO treated this report as "information" in his possession for the purpose of section 147( b) and reassessed the income on that basis. The AAC allowed the appeals holding, inter alia, that in law it could not be said that the ITO had any "information" in his possession enabling him to take action under section 147(b). On appeal by the Revenue, the Tribunal sustained the ITO's order relying on the of the Delhi High Court in CIT v. H.H. Smt. Chand Kanwarji [1972] 84 ITR 584 . On reference by the assessee and, having regard to the difference of opinion between various High…

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