Law: Income Tax Act, 1961

Section: 256(2),147,2(17)(ii),148

Law: Estate Duty Act, 1953

Section: 59(b)

Law: Income Tax Act, 1922

Section: 34(1)(b)

Income-tax--- ----Reassessment---Central Board of Direct Taxes---Information that income has escaped assessment---Meaning of `information'---Opinion of CBDT Interpreting Law---Does not constitute information---Reassessment on the basis of such opinion is not valid---Indian Income-tax Act, 1961, S. 147(b)--­CBDT Circular No. 21 of 1969. The expression "information" in the context in which it is used in section 147(b) of the Income-tax Act, 1961, means instruction or knowledge. When section 147(b) is read as referring to "information" as to law, what is contemplated is information as to the law created by a formal source. Any statement by a person or body not competent to create or define the law cannot be regarded as law. There are three categories in which opinions on law may be expressed by the Central Board of Direct Taxes. Where the opinion is expressed by the Central Board of Direct Taxes as the appellate authority, the said opinion will constitute information. The other circumstance may be that the Central Board of Direct Taxes, on its own, does not express any opinion on law but merely communicates judicial pronouncements through a circular in order to invite the attention of the taxing authorities. In such a situation also its opinion constitutes information. The third category is where the opinion is not expressed on any appeal but merely represents the Board's own opinion of the position of law. Such opinion cannot be information to form the basis of a notice for reassessment. The assessee, a non-resident company, rendered technical services to an Indian company. The technical service fees were not included in the total income but these fees were regularly and consistently shown by the assessee year after year in a part of the return showing exempted receipts. This was accepted and the Income-tax Officer in Bombay made the assessment up to the assessment year 1965-66 consistent with the view taken for the assessment year 1962-63. The jurisdiction over the assessee was transferred to the Income-tax Officer in Calcutta. In 1970, a notice of reassessment was issued in relation to the assessment year 1965-66. The Income-tax Officer completed the assessment…

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