Case: Bankipur Club Limited Vs. Commissioner of Income Tax, Bihar and Orissa

The assessee is a members club incorporated under the Indian Companies Act. We are concerned with its assessment for the assessment years9, andthe corresponding accounting years being the calendar years 1955, 1956, 1957 andresponse to a notice issued by theOfficer under section 22(2) of the Indianto be hereinafter referred to as "the Act" the assessee filed "Nil" returns for all the four years. It claimed that it was not liable to payas it was a members club. Before theets and profit and loss accounts of the assessee for the relevant accounting years were produced. After perusing those records, theOfficer came to the conclusion that the assessee was not liable to pay any tax in respect of the amounts realised by it from its members. Some time thereafter theOfficer issued notices to the assessee under section 34(1)(b). In response to those notices the assessee again filed "Nil" returns but theOfficer did not accept those returns. He assessed the assessee for the assessment years59 andon Rs. 7, 526, Rs. 3, 521, Rs. 5, 313 and Rs. 6, 881 respectively. He came to the conclusion that the amounts received from the members of the club as guests charges must be considered as the income of the assessee and that the same is liable to be taxedAggrieved by the orders of theOfficer, the assessee took up the matters in appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner affirmed the orders of theOfficer. A further appeal was taken by the assessee to the

Reasoning:
The High Court answered all those questions in favour of the department. The learned counsel for the assessee did not challenge the correctness of the answer given by the High Court in respect of question No. 1, relating to the assessment years0. He submitted that that question is concluded by the decision of this court in Commissioner ofv. Bidhu Bhusan Sarkar. In view of that submission, we do not propose to go into that questionNow, coming tothe question referredin respect of the assessment yearand the second question referred in respect of the subsequent years, theOfficer has not placed any material before the Tribunal to show that he received any fresh information either on questions of facts or on questions of law subsequent to the date he passed the original assessment orders. This court has repeatedly ruled that the information referred to in section 34(1)(b) must be what theOfficer receives after he makes the original order of assessment. It must come to his knowledge subsequent to the assessment sought to be reopened. In these cases it is submitted that all the facts were placed before theOfficer when he passed the original orders of assessment. The fact that the club had received certain amounts as guests charges from its members had been placed before theOfficer. It is not the case of theOfficer that he did not come to know all the relevant facts when he made the original orders of assessment. It is also not his case that at the time he made those orders he was not aware of the true legal position. It was for theOfficer to show that he had received some information subsequent to his passing the original orders of assessment. No such material was placed before the Tribunal. That being so, the Tribunal, in our opinion, was right in holding that theOfficer was incompetent to initiate proceedings under section 34(1)(b). The High Court has given no reason to come to the conclusion that there was any subsequent information on the basis of which theOfficer could have reassessed the assessee under sectionthe reasons mentioned above, we allow Civil Appeals Nos. 1304 to 1307 of 1971 to the extent mentioned above, discharge the answer given in respect of the question relating to the assessment yearas well as the answer given to the second question relating to the subsequent years and answer those questions in favour of the assessee. The answer given by the High Court in respect of the first question relating to the assessment years60 stands. The assessee is entitled to its costs in these appeals in this court. Hearing fee one setNow, coming to Civil Appeals Nos. 2157 to 2160 of 1968, they are dismissed as not being maintainable