ANDHRA BANK LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE appeals are preferred against the judgment of the Andhra Pradesh High Court answering the following question in the affirmative that is in favour of the Revenue and against the assessee

(2.) THE appellant is the<APL> Andhra Bank Limited </APL>and the assessment years concerned are 1960-61 to 1962-63. The bank was following the calendar year as its accounting year. In the course of its banking business, it was purchasing Government securities and also selling them from time to time. On Government promissory notes and securities, interest is payable on specified dates, but, all the same, the transferor or the transferee can calculate the interest which has accrued on such promissory notes and pay or receive such amount of interest on the date of and up to the date of purchase or sale. The assessee was also adopting this method and it was being accepted by the income-tax authorities until the assessment year 1958-59. However, with effect from the assessment year 1959-60, the assessee changed its method of returning income with respect to the transactions in securities. It attached a note to its return of income stating that by following the aforesaid method, the bank was experiencing several difficulties in t

(3.) THE facts stated above clearly disclose that the Income-tax Officer allowed the change in the method of accounting for the assessment years concerned herein knowingly. It was not a case of an inadvertent mistake which was discovered later on after completion of the assessment or oversight. Once it is found that the change in the method of accounting was knowingly allowed by the Income-tax Officer after taking into account all the relevant facts it is not permissible for the Income-tax Officer, or his successor, to reopen the assessment at a later point of time under section 147(b) of the Income-tax Act unless any information comes from an extraneous source. Further, we fail to see what is the "information" available to the Income-tax Officer in this case on the basis of which he is seeking to reopen the assessments under clause (b) of section 147. We find none. Indeed, this appears to be a case of mere change at opinion. The principles enunciated in Kalyanji Mavji's case cannot save the imThese appeals are accordingly allowed and the judgment of the High Court is set aside. The question referred is answered in the negative, i.e., in favour of the assessee and against the Revenue. No costs.