COMMISSIONER OF INCOME TAX Vs. HARDWARE TRADING CO

JUDGEMENT

(1.) THE Revenue has through this reference posed the following question for opinion of the High Court :

(2.) THE brief facts that may be relevant for the consideration of this question are that the assessee who is the respondent to this reference is trading in paints and other related products. We are concerned with the assessment for the assessment year 1985-86 which was originally completed under Section 143(3) on August 6, 1986. What is of some consequence is the fact that the Income-tax Officer concerned had left a note in the file which is contemporaneous with the assessment and which, it is necessary for us to reproduce because it is of some consequence :

(3.) MR. Indra Kumar, learned counsel who represents the Department, very vehemently submitted that the finding of the Tribunal which is to the effect that this is a case of change of opinion is vulnerable. It is his contention that the Tribunal itself had occasion to observe as indicated by us earlier, that the receipt of the van by the assessee which was a vehicle of substantial value i.e., Rs. 1,05,000 was not out of natural love and affection but that it was because of the business performance of the assessee and it is his submission that irrespective of whether the receipts by the assessee that emanate out of the business performance are in cash or kind, they come clearly within the definition of "concept of income" within the framework of the Income-tax Act. His submission was that the transfer to the capital account of the partners was clearly erroneous and that this would effectively be a reopening of the case on the basis of a reconsideration of the law which is totally and entirely different from a simple review which may be undertaken merely because the earlier findings appear to be incorrect or require a reconsideration. Undoubtedly it is a very fine distinction which learned counsel has propounded and it did require a detailed examination of the law particularly the decisions that have been rendered by the various courts from time to time. We do concede that the Supreme Court in the decision reported in A. I. A. Firm v. CIT , which was heavily relied upon by learned counsel has done almost a total review of the principles involved and MR. Indra Kumar submitted that the Supreme Court has in this decision very clearly opened up the possibilities for the Department to include an item that has either escaped attention or has been wrongly omitted. His submission was that while the courts have consistently upheld the view that an opinion which is once crystallised into a decision in an assessment order cannot be lightly or frivolously reopened merely because it appears to that or another officer that another view is possible ; the Supreme Court has elaborately in this decision, pointed out that at a subsequent point of time, if it is demonstrated that either because of a change of law or additional information or whatever, a reopening is justified, it would be permissible. His submission was that on the facts of the present case, the opinion expressed by the Tribunal which we have had occasion to refer to more than once above, fully supports his argument that this is a set of facts that would bring the case outside the purview of the bar relating to change of opinion.