Case: Assistant Controller of Estate-Duty Vs. Nawab Sir Mir Osman Ali Khan

may proceed to assess or reassess such property as if the provisions of section 58 applied thereto. "It is argued for the department that the observations in the appellate order of the Central Board of Revenue constitute the information on which the Controller could proceed to reassess. We may appropriately refer to the case set out in the counter-affidavit of the Controller" Para. 9 ...... In the instant case, the apparent undervaluation of the deceaseds interest, which was pointed out by the appellate authority is sufficient information to constitute a reason to make this respondent reasonably believe that there was an escapement of assessment by reason of undervaluation, and justify the initiation of the reassessment proceedings under section 59 of the Act.."The appellate order is one of confirmation of assessment as already made. The observations relied on are as under" In the calculation which I have made in paragraph 7 above, I have assumed the yield from the loan only at 1 1/4%. i.e., the interest has not been grossed up as in the calculation made by the Assistant Controller. According to the method adopted in paragraph 7, the value of the securities of the face value of Rs. 4.5 crores (O.S.) came to Rs. 3, 06, 83, 760 I.G., i.e., 78%. The valuation adopted by the Assistant Controller comes to 52% as against the estimate of 40% to 50% made by the stock brokers. For the reasons already given by me in paragraph 7 above, I am of the opinion that the correct value should be 78%. However, I find that there is some force in the argument advanced by the appellants representative against any enhancement being made by the Board in appeal proceedings. I refrain therefore from making the proposed enhancement in the value of the securities and confirm the value adopted by the Assistant Controller. "There can be no doubt that the appellate authority expressed an opinion, which, however, was not given effect to. We would be straining the language of the section if we take in also the opinions expressed as constituting informationOur learned brother rightly posited the question whether the expression of opinion by the Central Board of Revenue was information within the meaning of section 59(b) of the Act. After careful consideration he held that such an opinion could not be information within the meaning of section 59(b) of the Act. We are in agreement with our learned brother on this questionSri Kondaiah, the learned counsel for the department, placed reliance on Maharaj Kumar Kamal Singh v. Commissioner of Income-tax, where it was held that" The word information in section 34(1)(b) included information as to the true and correct state of the law, and so would cover information as to relevant judicial decisions. "10. In the case originally the Income-tax Officer, following the decision of the Patna High Court in Kamakshya Narain Singh v. Commissioner of Income-tax, omitted to bring to assessment for the year 1945-46, the sum of Rs. 93, 604 representing interest on arrears of rent due to the assessee in respect of agricultural land on the ground that the amount was agricultural income. Subsequently, the Privy Council, on appeal from that decision, held that interest on arrears of rent payable in respect of agricultural land was not agricultural income, and, as a result of that decision, the Income-tax Officer initiated reassessment proceedings under section 34(1)(b) of the Income-tax Act and brought the amount of Rs. 93, 604 to tax11. We do not see that the instant case presents any similarity to the one cited to us. On the contrary, it has been held consistently that information expressed on the same facts could not be information. In Commissioner of Income-tax v. Janab S. Khaderwalli Sahib, a Bench of the Madras High Court observed thus" It is clear that a mere change of opinion based on the same facts and figures which were present to the mind of the Income-tax Officer at the time of the original assessment does not amount to discovery. The discovery must be the result of definite information, that is to say new information that has come to the knowledge of the Income-tax Officer. The Income-tax Officer cannot act under this section even though the taxpayer has escaped assessment if he is acting on information which was already in his possession and within his knowledge. Unless it can be said that there is fresh information which was not in his possession at the time when the original assessment was made, action under section 34 of the Income-tax Act is not justified. The mere fact that a different opinion on the same facts was taken by somebody else is not definite information leading to discovery on the part of the Income-tax Officer who was in possession of the same facts and entire facts at the time of the original assessment. "Ananthalakshmi Ammal v. Commissioner of Income-tax reiterated the same view. It was observed in that case thus" That appellate decision with nothing more will not amount to definite information within the meaning of section 34 of the Act to enable the Income-tax Officer to exercise the powers conferred on him by section 34 with reference to the same set of facts... The facts for consideration remained the same. Only his erroneous decision was eliminated. It was nothing more than a change of opinion on the same set of facts, though the change in this case was apparently forced by the decision of the Tribunal. There was no definite information or any discovery in consequence of such information within the meaning of section 34. "12. We are of the same opinion. We, therefore, affirm the finding of our learned brother that a mere expression of opinion by the Central Board of Revenue does not amount to information within the meaning of section 59(b) of the Estate Duty Act. As we have said above, the decision in this case could be properly rested on this findingWe find, therefore, no grounds for interference.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]6. It is seen that under section 34 of theAct, before the amendment made by Act 48 of 1948, theOfficer, had power to issue a notice in respect of escaped orincome, but he could do so within a period of four years, whereas under the section as amended, he could issue a notice under certain conditions within a period of 8 years.We do not see that the instant case presents any similarity to the one cited to us. On the contrary, it has been held consistently that information expressed on the same facts could not be information. In Commissioner ofv. Janab S. Khaderwalli Sahib, a Bench of the Madras High Court observed thus" It is clear that a mere change of opinion based on the same facts and figures which were present to the mind of theOfficer at the time of the original assessment does not amount to discovery. The discovery must be the result of definite information, that is to say new information that has come to the knowledge of thetax Officer cannot act under this section even though the taxpayer has escaped assessment if he is acting on information which was already in his possession and within his knowledge. Unless it can be said that there is fresh information which was not in his possession at the time when the original assessment was made, action under section 34 of theAct is not justified. The mere fact that a different opinion on the same facts was taken by somebody else is not definite information leading to discovery on the part of theOfficer who was in possession of the same facts and entire facts at the time of the original assessment. "Ananthalakshmi Ammal v. Commissioner ofreiterated the same view. It was observed in that case thus" That appellate decision with nothing more will not amount to definite information within the meaning of section 34 of the Act to enable theOfficer to exercise the powers conferred on him by section 34 with reference to the same set of facts... The facts for consideration remained the same. Only his erroneous decision was eliminated. It was nothing more than a change of opinion on the same set of facts, though the change in this case was apparently forced by the decision of the Tribunal. There was no definite information or any discovery in consequence of such information within the meaning of section 34. "12. We are of the same opinion. We, therefore, affirm the finding of our learned brother that a mere expression of opinion by the Central Board of Revenue does not amount to information within the meaning of section 59(b) of the Estate Duty Act. As we have said above, the decision in this case could be properly rested on this findingWe find, therefore, no grounds for interference. The appeal is dismissed with costs. Advocates fee Rs. 150