M.C. DESAI, C.J. - (1.) I concur in the answers proposed by my learned brother. According to the wakf deed one-fifth of the income was to be spent on religious and charitable objects described in the wakf deed. Though in the wakf deed the income from the wakf propert : at the time of the execution of the deed was stated to be Rs. 10,000 and consequently the income set apart for religious and charitable objects was said to be Rs. 2,000, there is no doubt that what the wakif intended was that one-fifth of whatever was the actual income of the year was to be spent on religious and charitable objects in that year. That was what he intended but the amount that he intended to be spent on religious and charitable objects is not the amount allowed to be exempted from the assessable income; section 4(3)(i) provides that any income derived from property held under trust or other legal obligation wholly or in part for religious or charitable purposes, in so far as it is applied or finally set apart for application èthereto, shall not be included in the total income of the person receiving it. It is, therefore, not enough that according to the trust or other legal obligation a certain income must be spent on religious or charitable purposes in order to be exempt from taxation; it must have been applied, or at least finally set apart for application, for such purposes. Now what happened in the present case is that though according to the wakf deed a certain amount (one-fifth of the actual income) was to be spent for religious and charitable purposes, the assessee applied or finally set apart for application, for such purposes, one-fifth of not the income as found to have been actually received by him, but of the income which he claimed to have received. He claimed to have received less income than he actually received.
(2.) SINCE he claimed to have received a smaller amount as income, naturally he applied, or set apart for application, for religious and charitable purposes, one-fifth of only the smaller amount. As he did not apply or set apart for application one-fifth of the actual income, one-fifth of the actual income ought not to have been deducted from the total income for assessment purposes. This Income-tax Officer ignored the provision of section 4(3)(i) and deducted from the total income one-fifth of the actual income. The result was that a larger sum than was legal was deducted from the total income, i.e., some income escaped assessment. This happened in both the assessment years in question. The successor of the Income-tax Officer learnt of this mistake committed by his predecessor. How he learnt is not known, but there can be not the slightest doubt that he did learn because he issued notice under section 34 for the assessment of the escaped income. It goes without saying that he received some information either orally from some one or through a perusal of the assessment order and the relevant law. He did read the assessment order passed by his predecessor, whether suo motu or on an information given to him by somebody that there was a mistake. In either case on reading the assessment order he acquired the information that his predecessor had allowed a larger deduction on account of which he had a reasonable belief that certain income had escaped assessment and he became invested with jurisdiction to proceed under section 34(1)(b). The information that he acquired by word of mouth of somebody or from perusal was that his predecessor had in contravention of the provisions of section 4(3)(i) allowed deduction of one-fifth of the actual income and not of the amount actually applied or finally set apart for application for religious and charitable purposes. His predecessor had not considered the distinction between the two at all; he had proceeded on the assumption that the assessee was entitled to deduct one-fifth of the actual income regardless of whether the whole of it had been applied (or finally set apart for application) for religious and charitable purposes or not. Information of the mistake committed by him was undoubtedly received by his successor and since the information led to the belief èthat certain income had escaped assessment, the successor became entitled to proceed under section 34(1)(b). The word &information& used in the provision covers all kinds of information received from any person whatsoever or in any manner whatsoever. All that is required is that the Income-tax Officer should learn something, i.e., he should know something which he did not know previously. Any knowledge acquired is information, regardless of the source and the manner of acquisition. It was contended before us that a change of opinion is not information, but the present is not a case of a change of opinion. In the first place the original assessment order was passed by one Income-tax Officer and the other was passed by another. Secondly, if there is information leading to the belief that income has escaped assessment, it does not matter if there is also a change of opinion. One can change ones opinion on account of information. One can receive information that the opinion on a question of law formed by one is erroneous. One can change ones opinion without any aid from outside, simply by adopting a different reasoning; but one can also change ones opinion with outside aid and the outside aid will be nothing but information. If one is informed that the view held previously is erroneous and if the result of this information is the belief that income has escaped assessment, section 34(1)(b) applies. It may not apply only when there is a change of opinion without information. Whether the Income-tax Officer, whose order is impugned, had received information or not and whether the information resulted in a certain belief or not are pure questions of fact which cannot be referred by the Appellate Tribunal to this court and cannot be answered by this court on reference. Whether what one receives is information or not, within the meaning of section 34(1)(b), may be a question of law, but in the absence of such a question, whether there was information or not is a question of fact. It is not open to this court to go into the question whether the Income-tax Officer, who passed the impugned assessment order, had received anything which might amount to information, and the order cannot be set aside on the sole ground that the he had not received any such thing.
(3.) IT is open to serious question whether an assessment order can be set aside on the mere ground that there was no information within the meaning of section 34(1)(b), to justify the issue of a notice under that provision. If there was no escape of income initially, the second order of assessment will fail on merits. If there was escape of income and the income is assessed under the second order after a notice served upon the assessee as required under section 34(1), I do not see any reason why the Tribunal should at all to into the question whether there had been an information to justify the issue of the notice. IT is obligatory to issue a notice and if no notice has been issued, the subsequent assessment order may be declared to be null and void. After the issue of the notice and after a finding that the income had escaped assessment, the èquestion whether there had been information in the possession of the Income-tax Officer before issuing the notice or not becomes a matter of mere academic interest. I do not know how without some kind of information an Income-tax Officer would decide to reopen the matter; ordinarily he will have some information. In a rare case he may act without information on a change of opinion or on second thought. When the reopening is done not by the Income-tax Officer who had passed the initial assessment order, but by his successor, there is no question of his acting on a change of opinion or second thought and he must have acted on information. IT is so obvious that any inquiry into the question whether he had information or not must be ruled out as a futile inquiry. IT seems to me that the object behind the requirement, that there must be information leading to the belief, is that the matter should not be reopened on mere suspicion or with the simple object of re-examining the matter. The object is fully served when after the reopening it is found as a matter of fact, that the income had escaped assessment. IT would not make much sense to set aside the correct order of assessment passed under section 34(1) on the supposed ground that the reopening was done without information. I agree with the proposed order in respect of the costs.;