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Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Position prior to 1-4-1989 - Assessment year 1968-69 - In original assessment, Income-tax Officer allowed deduction in respect of grant given by assessee to Labour and Industrial Bureau - Subsequently, he came to know that AAC, while dealing with appeal arising out of assessment made on assessee for assessment year 1970-71, had held that such grant made to Labour and Industrial Bureau was not an allowable deduction - In view of this, Income-tax Officer reopened assessment for relevant assessment year - Tribunal, however, held that order passed by AAC for assessment year 1970-71 could not constitute 'information' on basis of which proceedings under section 147(b) could be initiated by Income-tax Officer - It, accordingly, set aside order passed by Income-tax Officer under section 147(b) for reopening of assessment - Whether in view of decision in CIT v. Kerala State Industrial Development Corpn. Ltd. [1979] 116 ITR 158 (Ker.), reopening of assessment for relevant assessment year under section 147(b) was valid - Held, yes FACTS In the original assessment, the Income-tax Officer had allowed deduction in respect of grant given by the assessee to the Labour and Industrial Bureau. Subsequently, he came to know that the AAC, while dealing with an appeal arising out of the assessment made on the assessee-company for the assessment year 1970-71, had held that such grant made to the Labour and Industrial Bureau could not be considered as allowable deduction. In view of this, the Income-tax Officer reopened the assessment and completed the revised assessment, by adding back the amount of grant made by the assessee to the Labour and Industrial Bureau. The AAC confirmed the revised assessment. On second appeal, the Tribunal took the view that the decision of the AAC for the assessment year 1970-71 holding that no deduction could be allowed in respect of the grant made by the assessee to the Labour and Industrial Bureau could not constitute "information" on the basis of which proceedings under section 147(b) could be validly initiated by the Income-tax Officer especially because the said decision of the…

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