Law:

Section:

Section 147 of the Income-tax Act, 1961 (Corresponding to section 34 of the Indian Income-tax Act, 1922) - Income escaping assessment - Information - Position prior to 1-4-1989 - Assessment year 1939-40 - Whether words "definite information" in section 34 of 1922 Act cannot relate to information regarding a new decision as to interpretation of a section of Act - Held, yes -Whether words 'has escaped assessment' in section 34 of 1922 Act cannot be read as equivalent to 'has not been assessed' and word 'assessment' is not confined to definite act of making an order of assessment - Held, yes - Whether where assessment in respect of relevant assessment year was completed under section 23(3) of 1922 Act treating forest income of assessee as agricultural income, merely because there was a subsequent decision of High Court under Bihar Agricultural Income-tax Act declaring that income from forests of spontaneous growth did not constitute agricultural income, ITO was not justified in holding that income from such forests during relevant assessment year had escaped assessment within meaning of section 34 of 1922 Act - Held, yes Words and Phrases: Words 'definite' information and 'has escaped assessment' as occurred in section 34 of the Indian Income-tax Act, 1922. FACTS The assessee was a zamindar, and derived his income, among other sources, from forests. For the assessment year 1939-40, the ITO made an assessment under section 23(3) of the 1922 Act. In the original assessment under section 23(3) of the 1922 Act, the ITO did not take the income from forests into account as till then the revenue authorities were under the impression that such income was agricultural income and as such was not assessable to income-tax. On 17-4-1941, the Patna High Court held in the case of Province of Bihar v. Maharaja Pratap Udai Nath Sahi Deo [1941] 9 ITR 313 that incomes from forests such as lakhar, bankar and phalkar from forests of spontaneous growth as distinct from forests grown by the process of cultivation were non-agricultural incomes, and as such were assessable to income-tax. On 14-12-1942, a notice was issued to the assessee under section 34 of the 1922 Act, for the…

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