Law:

Section:

Section 15, read with section 10A of the Excess Profits Tax Act, 1940 - Income escaping assessment - Information - Assessment years 1944-45 & 1945-46 - EPTO, initiated proceedings under section 15 and in course of said proceedings, passed an order under section 10A - High Court, however, opined that proceedings under section 15 was not valid because there was no definite information with EPTO and on that account, he had no power to make an order under section 10A - Expression of that opinion of High Court was challenged - Whether in interests of justice, it was necessary that a supplementary statement of case should be called for on question whether there was any proceeding pending under section 15 - Held, yes - [-Tribunal was accordingly directed to submit supplementary statement of case] FACTS The assessee-firm claimed that the joint family of 'G' having been dissolved, there was a reconstitution of the business of the partnership, with the result that while in the Kanpur firm there was no change in partners, in the Farukhabad firm there were three partners instead of two partners. The ITO, however, directed that the income be assessed as the assessee's income and not as the income for a separate firm. Consequently, the EPTO assessed the entire income of the two businesses in the assessee - firm's hands. Meanwhile, the AAC having passed appellate orders, the ITO modified the income-tax assessment for the assessment years 1944-45 & 1945-46. The EPTO in a proceedings under section 10A, held that the main purpose of the partial partition of the family business of 'G' was avoidance of excess profits tax liability. In the revised assessment under section 15, in pursuance of order under section 10A, he included the income of the Farukhabad firm in the assessee's total income for purposes of excess profits tax assessment. The Tribunal held that the Excess Profits Tax Officer had received definite information regarding the state of the law in pursuance of the appellate order of the Appellate Assistant Commissioner who had held that the family of 'G' was partially partitioned. The Tribunal also held that the Excess Profits Tax Officer was competent to pass an…

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