R.S.PATHAK,J. - (1.) THE assessee is a registered firm carrying on business in piece - goods and commission agents. If had its head office at Kanpur and a branch at Farrukhabad. It consisted of two partners, Gurbux Rai and Harbux Rai, with equal shares, and each of the partners represented his own HUF. The HUF of which Gurbux Rai was a member was subsequently partitioned. The assessee's branch business at Farrukhabad was transferred to a partnership, M/s Pussalal Jagganlal, consisting of Harbux Rai and the divided members of Gurbux Rai's erstwhile HUF, the shares of the partners being Harbux Rai 8 annas, Chameli Devi 4 annas and Gopaldas 4 annas. This business was taken over by the partnership on July 4, 1943.
(2.) THE original assessment under S. 14 of the EPT Act was made upon the assessee on January 29, 1947, for the chargeable accounting periods ending June 21, 1944, and July 10, 1945. The assessee represented that the Farrukhabad business no longer belonged to it. This was also pointed out in the income -tax assessment for the previous year 1943 -44, relevant to the asst. yr. 1944 -45. The ITO, however, made an assessment order on November 22, 1946, holding that there had been no partition in the family of Gurbux Rai and that the Farrukhabad business had not been transferred by the assessee, and, therefore, included the income from the Farrukhabad business in the total income of the assessee. The excess profits tax assessment for the chargeable accounting period ending June 21, 1944, was also made accordingly. Against the assessment order made by the ITO the assessee filed an appeal, and the AAC while disposing of the appeal held that the family of Gurbux Rai had indeed partitioned its movable property somewhere near Asadh Samvat 2000, and that from that date the Farrukhabad business was continued by a separate from consisting of Harbux Rai, Smt. Chameli and Gopaldas. The income -tax assessments were consequently modified, in view of the observations of the AAC, for the asst. yrs. 1944 - 45 and 1945 -46. Effect was also given to these observations in the excess profits tax assessments. The result was that the profits from the Farrukhabad business were excluded from the total income of the assessee. On February 3, 1951, the EPO initiated proceedings under S. 15 of the EPT Act in respect of the chargeable accounting periods ending June 21, 1944, and July 10, 1945. He also issued two notices under S. 10A of that Act, one relating to each of the chargeable accounting periods, and on February 21, 1951, he made an order under S. 10A in respect of each period, holding that the main purpose of the partition of the family business of Gurbux Rai was the avoidance of excess profits tax liability. Upon that order, the EPTO made an order under S. 15 modifying the original excess profits tax assessment and including the profits of the Farrukhabad business in the total profits of the assessee for the purpose of excess profits tax assessment. In appeal before the AAC, the assessee contended that the provisions of S. 15 could not be invoked as the EPTO had no definite information coming into his possession enabling him to discover that any profits of the chargeable accounting period had escaped assessment. It was urged that all the material was before the EPTO when he made the original assessment and there was no new information before him. The further contention raised by the assessee was that merely in order to reassess the assessee under S. 15, the EPTO had no jurisdiction to make an order under S. 10A. These contentions did not find favour with the AAC who accordingly dismissed the appeal. The assessee then appealed to the Tribunal, but again without success. The Tribunal held that the order of the AAC holding that the family of Gurbux Rai had been partially partitioned constituted definite information regarding the state of the law which justified the EPTO reopening the assessment under S. 15, and also held that the EPTO was competent to pass an order under S. 10A. At the instance of the assessee, the Tribunal has referred the following two questions by this reference : "(1) Whether, on the facts and in the circumstances of this case, there was any definite information within the meaning of S. 15 by virtue of which the EPTO was competent to reopen the excess profits tax assessments ? (2) Whether, in the circumstances of this case, the EPTO was competent to apply the provisions of s. 10A and make necessary adjustments in pursuance thereto in the revised assessment under s. 15 ?" Sec. 15 of the EPT Act, 1940, provides : "If, in consequence of definite information which has come into his possession, the EPTO discovers that profits of any chargeable accounting period chargeable to excess profits tax have escaped assessment, or have been under -assessed, or have been the subject of excessive relief, he may at any time....serve on the person liable to such tax a notice containing all or any of the requirements which may be included in a notice under S. 13, and may proceed to assess or reassess the amount of such profits liable to excess profits tax and the provisions of this Act shall, so far as may be, apply as if the notice were a notice issued under that section."
(3.) THESE provisions are almost identical in language with those of S. 34(1) of the IT Act, before its amendment in 1948. The provisions of S. 34(1) then read : "34. (1) If, in consequence of definite information which has come into his possession, the ITO discovers that income, profits or gains chargeable to income -tax have escaped assessment in any year..." ;