RAJAN SILK Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner-firm by this petition moves this Court for an appropriate writ, order and direction to quash and set aside the reassessment order dated March 31, 1980, passed by the ITO, Surat, in respect of the asst. yr. 1975-76. A few facts need be noticed in order to appreciate the challenge to the impugned assessment.

(2.) THE petitioner-firm made a return of Rs. 61,460 for the asst. yr. 1975-76 to which a statement of total income was annexed. At the end of the said statement, three notes were appended, one of which was to the effect that the assessees had purchased automatic printing machinery in the year of account corresponding to the assessment year in question, and that it worked the said machinery for some time in the said period and the petitioner- firm had claimed development rebate, depreciation, extra shift allowance on the cost of the said machinery. It appears that the petitioner had also furnished along with the profit and loss account which it had filed for the accounting year corresponding to the assessment year, the particulars of the interest paid by the petitioner-firm to different creditors which, inter alia, included an amount of Rs. 8,057 which the petitioner claims to have paid to the Life Insurance Corporation on loans raised and secured on the policies on the lives of the partners of the firm. THE ITO concerned by his order of September 18, 1976, assessed the petitioner-firm granting depreciation, development rebate, extra shift allowance and interest as claimed by the petitioner-firm. It appears that by a notice dated January 20, 1979, issued under s. 148 of the IT Act, 1961, which was received by the petitioner-firm on January 24, 1979, the peti tioner was intimated that the ITO had reason to believe that the income chargeable to tax for the asst. yr. 1975-76 had escaped assessment and, therefore, he proposed to reassess the income for the said assessment year, and the assessee should, therefore, file within thirty days of the receipt of the notice, a return in the prescribed form for the said year. THE assessee-firm by its letter of January 28, 1979, objected to the proposed action for reassessment, inter alia, on the ground that the ITO had no jurisdiction to reopen the assessment. THE assessee by another letter of February 12, 1979, addressed to the ITO stated that there was no reason or ground in fact or in law for issuing a notice under s. 148 of the said Act. THE assessee also requested the ITO to treat the original return as the return of the assessee in response to the aforesaid notice. THE assessee by the said letter also requested the ITO to furnish reasons for issuance of the aforesaid notice.

(3.) THE only short point which has a bearing so far as this petition is concerned is as to whether the audit note can be said to constitute an information within the terms of s. 147(b) of the IT Act, 1961. So far as this question is concerned, the point is not res integra and we do not think that it would be open to the Revenue to contend that the audit note constitutes an information so as to invest the ITO with the jurisdiction or authority to initiate reassessment proceedings under s. 147 (b).