COMMISSIONER OF INCOME TAX Vs. KELUKUTTY

JUDGEMENT

(1.) THIS is a reference under Section 256(2) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax, Kerala. The questions of law referred are :

(2.) WHETHER, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that the Income-tax Officer was not justified in reopening the proceedings under Section 147(b) ?"

(3.) TWO conditions have to be satisfied before proceedings can be initiated under Section 147(b) : (1) the Income-tax Officer must have reason to believe that the income has escaped assessment ; and (2) it should be in consequence of information received after the original assessment that he should have reason to believe that the income has escaped assessment. If either condition is not satisfied the action would be without jurisdiction. Commenting on the second condition Shah J., speaking for the Supreme Court in Commissioner of Income-tax v. A. Raman & Co., [1968] 67 I.T.R. 11. 16 ; [1968] 1 S.C.R, 10 (S.C.)., said :