- (1.) The three questions referred to the High Court for answer in this matter are as follows : "1. Whether on the facts and in the circumstances of the case, the Tribunal having held that there was no case for re-opening the assessment under Section 147(a) of the Income-tax Act, 1961 on the reason recorded, nor any cause for re-opening of the assessment under Section 147(b) of the Act on the reasons recorded on 31-3-77 was justified in law in sustaining the re-opening of assessment under Section 147(b) of the Act on the reasons and grounds given in the order passed an appeal 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the re-assessment proceeding initiated under Section 147(a) of the Act by issue of notice dated 31-12-76 under Section 148 of the Act on the reasons recorded, could be validly converted into a proceeding under Section 147(b) of the Act subsequently 3. Whether on the facts and in the circumstances of the case the Tribunal was justified in law in setting aside the order of the Appellate Assistant Commissioner of Income-tax cancelling the re-assessment orders passed by the Income-tax Officer in ignorance of Section 144-B of the Act and in directing the Income-tax Officer to resort to the provisions of Section 144-B afresh instead of annulling and/or cancelling the re-assessment orders and without also taking into consideration the legal bar of limitation for the passing of re-assessment orders under Section 153 of the Act -
(2.) The short facts which gave rise to that reference were that the respondent-assessee was duly assessed by the Income-tax Officer (I.T.O.) for the relevant period on the basis of the information supplied by the assessee. No particulars were left out by the assessee for enabling the completion of his assessment. However, the I.T.O. re-opened the assessment and issued a notice under Section 147(a) of the Income-tax Act on the basis that in the case of another Tea Company, the Appellate Assistant Commissioner had taken the view that sale of standing trees constituted revenue receipts and, therefore, liable to tax. The I.T.O. was of the opinion that the decision of the Appellate Assistant Commissioner in the other case would amount to 'information' within the meaning of Section 147(a) of the Act in so far as the assessee-company is concerned.
(3.) In the course of the proceedings under Section 147(a), the I.T.O. found that it could not be sustained under that sub-section and converted the same into a proceeding under Section 147(b) and concluded the matter. The order of the I.T.O. was challenged before the Appellate Assistant Commissioner (A.A.C.) who set aside the same. But on further appeal by the Revenue, the Tribunal modified the order of the A.A.C. and permitted the I.T.O. to proceed afresh under Section 144-B of the Act. When the matter came before the High Court, the reference was answered in favour of the assessee and the order passed by the I.T.O. on re-assessment was set aside. In fact, the High Court observed that the Tribunal ought to have quashed the order converting the proceedings under Section 147(b) from that under Section 147(a).;