Law:

Section:

section 148 of the income-tax act, 1961-reassessment-issue of notice-ito omitted to disallow interest paid by petitioner-firm to its partners representing their hufs-later, based on iac's letter pointing out omission, he issued notices for reopening assessments-whether notices were valid and not liable to be quashed for lack of jurisdiction-held, on facts and law, yes Facts While completing the assessments of the petitioner-firm for the assessment years 1976-77 and 1977-78, the ITO omitted to disallow interest paid to partners representing their HUFs. Later, when the assessment for the assessment year 1978-79 was referred to the IAC under section 144B, he pointed out the omission to the ITO by means of a letter. On this basis, the ITO issued notices to the petitioner under section 148 for reopening the assessments. The petitioner challenged by way of writ the jurisdiction of the ITO to issue the impugned notices since it had made full disclosure of the material facts. The petitioner also prayed for quashing the notices. Held In writ proceedings under article 226 of the Constitution, the High Court is only concerned with deciding whether the conditions, which invested the ITO with the power to reopen the assessment, did exist. In this case, it was immaterial whether the assessee had made a full and true disclosure or not. The ITO received information from the IAC and had averred in writing that, on the basis of this information, he had reasons to believe that income chargeable to tax had escaped assessment. The reopening was sought out only under section 147(b) and not under section 147(a). When the ITO had not considered the question whether interest was paid to the kartas, there could not be any change of opinion also. In CIT v. Anand Transport Co. (P.) Ltd. [1982] 137 ITR 300 (MP), it had been held that decisions of superior authorities under the Act constituted 'information' under section 147(b). Consequently, the contention that the ITO had no jurisdiction to issue the impugned notice, could not be upheld. Cases referred to Kantamani Venkata Narayana & Sons v. First Addl. ITO [1967] 63 ITR 638 (SC) and CIT v. Anand Transport Co. (P.) Ltd. [1981] 137 ITR…

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