Law: Income Tax Act, 1961

Section: 147(b)

---Reassessment---Information that income has escaped assessment--­Decision of High Court would constitute information---Initiation of reassessment proceedings on basis of such decision is valid---Indian Income Tax Act, 1961. S.147(b)---[Saradbhai M. Lakhani v. ITO (1998) 231 ITR 779 reversed]. Held, reversing the decision of the High Court, that the information which was received by the Income-tax Officer was the decision of the Gujarat High Court in Banyan & Berry v. CIT (1996) 222 ITR 831 (Guj.). When the Income-tax Officer became aware of this decision, he could initiate the proceedings under section 147(b) of the Income Tax Act,'] 961. A.L.A. Firm v. CIT (1991).189 ITR 285 (SC) fol. Saradbhai M. Lakhani v. ITO (1998) 231 ITR 779 reversed. Banyan & Berry v. CIT (1996) 222 ITR 831 (Guj.) ref. JUDGMENT Special leave granted. Heard the learned Attorney-General for the appellant. This is an appeal against the judgment of the Gujarat High Court which had allowed a writ petition filed by the respondent who had challenged the notice issued under section 148 of the Income Tax Act, 1961, whereby the respondent's assessment in respect of year 1988-89 was sought to be recorded. The reason for re-opening of the assessment was that the Gujarat High Court in Banyan & Berry v. .CIT (1996) 222 ITR 831, had held that after dissolution of -the partnership firm, the assessment could be only in the hands of the erstwhile partners. The income was computed on the basis of the award of the arbitrator in favour of the firm. The amount received was…

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