GLEN LEVEN ESTATES LIMITED Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) The petitioner in this writ petition is a company engaged in the business of tea plantation. For the assessment year 1964-65 the petitioner company was assessed to income tax. Ext. P1 dated 30-11-1964 is the assessment order passed against it for the year 1964-65. The Income Tax Officer had accepted the return filed by the Company with some modifications and found that there was a net loss of Rs. 1585/. Subsequently, it came to the notice of the Income Tax Officer that in computing its business income from the manufacture of tea for the assessment year 1964-65 the company had claimed deduction in respect of a sum of Rs. 20,336/- as representing provident fund contributions paid by it in respect of its employees whereas the legal liability to pay the said contributions had not in fact arisen during the relevant year of account but in earlier years. Based on this information the Income Tax Officer initiated proceedings under S.147(b) of the Income Tax Act, 1961 for reopening the assessment. After considering the objections put forward by the petitioner the Income Tax Officer passed a fresh assessment order against the company for the aforesaid year as per Ext. P2 dated 10-7-1967 disallowing the deduction in respect of the payment of the arrears of provident fund amounting to Rs. 20,336/-. The petitioner company took up the matter in revision before the Commissioner of Income Tax, Kerala. Ext. P4 is the order passed by the Commissioner rejecting the revision petition and confirming the reassessment made under Ext. P2. This writ petition has been brought seeking to quash Exts. P2 and P4.

(2.) It is contended on behalf of the petitioner that the Income Tax Officer acted without jurisdiction in reopening the assessment made against the petitioner company in purported exercise of his powers under S.147(b) of the Income Tax Act. It is argued that no new materials which will constitute "information'' within the meaning of the said expression as used in S.147(b) of the Act, has come to the possession of the Income Tax Officer so as to warrant initiation by him of proceedings against the petitioner under the said section. Elaborating this contention, the petitioner's counsel pointed out that even at the time of making the original assessment under Ext. P, the books of accounts of the company as well as the company's balance sheet and profit and loss account for the relevant accounting period had been produced before the Income Tax Officer and it was with these materials in his possession that the Income Tax officer had made the assessment allowing the deduction of the amount of Rs. 20,336/- paid by the company by way of arrears of provident fund contributions. The mere fact that there has been a subsequent charge of mind on the part of the Officer, counsel contends, would not justify his taking recourse to proceedings for reassessment on the ground that he had reason to believe inconsequence of information in his possession that the income chargeable to tax has escaped assessment. The petitioner's counsel sought to derive support for the above contention from certain observations contained in the decision of the Supreme Court in The Commissioner of Income Tax v. M/s. A. Raman and. Co., AIR 1968 SC 49 . The dictum laid down by the Supreme Court in the decision cited above far from supporting the contention advanced by the petitioner is an authority for the contrary position as is evident from the following passage extracted from the judgment:

(3.) Reference may be also made to Anandji Haridas and Co. (P) Ltd. v. S. P. Kasture ( AIR 1968 SC 565 ), where the Supreme Court had occasion to consider the scope of the expressions "information" and "escaped assessment" occurring in S.11A of the C. P. and Bearer Sales Tax Act (21 of 1947). It was held by their Lordships that the word "information" means knowledge and it need not necessarily be derived from outside sources but may be gathered by the assessing authority from his own records and cited with approval the decision of the Madras High Court reported in Salem Provident Fund Society Ltd v. v. Commissioner of Income Tax, Madras, (42 ITR 347), and the ruling of a Division Bench of this court reported in United Mercantile Co. Ltd. v. Commissioner of Income Tax, Kerala, (64 ITR 218),