AGARWAL, J. - (1.) THE following question has been referred to us by the Tribunal for our opinion under S. 256(1) of the IT Act, 1961 ('the Act') : "Whether, on the facts and in the circumstances of the case, the ITO was justified in reopening the assessment under S. 147(b) on the basis of the audit report or whether it was a case of mere change of opinion taking the case outside the ambit of S. 147 of the IT Act, 1961?"
(2.) THE ITO as well as the CIT(A) repelled the contention of the assessee that the initiation of proceedings under S. 147(b) of the Act was illegal. The assessee's claim was that the initiation having been done on the basis of audit report could not be taken as a ground for reopening the assessment. In the appeal taken up by the assessee to the Tribunal, its contention was upheld. The Tribunal took the view that on the facts and in the circumstances of the present case, it was a case of change of opinion and the audit report did not furnish any ground to proceed under S. 147(b).
(3.) AGGRIEVED by this order, the Department made an application for reference to this Court which was allowed by the Tribunal and consequently, this case has come before us. The question referred has already been quoted above.;