High Court Of Madras
Tamil Nadu Small Industries Development Corporation Ltd. vs. CIT
Asst. Year 1975-76
R. Jayasimha Babu & K. Gnanaprakasam, JJ.
Tax Case No. 1453 of 1986
20th December, 2000
P.B. Sampathkumar, for the Assessee : Ms. Chitra Venkataraman, for the Revenue
R. JAYASIMHA BABU, J. :
The Tribunal has held that the reopening of the assessment was fully warranted by the observation which had been made in its order in relation to an earlier assessment year as it constituted information for the purpose of reopening the assessment made for the year 1975-76. It had been held by the Tribunal in its order in relation to the asst. yr. 1974-75 that the excess physical stock could not be set off against the deficit in the books.
The assessee contends that the Tribunal should not have taken that view, as according to the assessee that order of the Tribunal was not in existence on the date the original assessment was made for the year 1975-76. The reopening of an assessment need not necessarily be on the basis of information available on the date or prior to the date of the assessment order. Information, which though subsequently received shows the defects in the order, can, so long as it does constitute information form the basis for the reopening.
The Supreme Court in the case of A.L.A. Firm vs. CIT (1991) 93 CTR (SC) 133 : (1991) 189 ITR 285 (SC) : TC 2R.453 held that where the AO had failed to take note of the law laid down in a decision of the High Court which had been rendered even prior to the date of the assessment, in proceeding to reopen the assessment after he became aware of the decision, was permissible. The information in that case was obviously the information received by the officer subsequent to the order of assessment. That is so in all cases of reopening.
In the case of CIT vs. M.V.M. Chellamuthu Pillai (2000) 162 CTR (Mad) 303 : (2000) 243 ITR 305 (Mad), this Court held that the reopening of the wealth-tax assessment after the assessment was made under the IT Act which brought to light the error in the wealth-tax assessment, was permissible.
We, therefore, answer the questions referred to us with regard to the correctness of the Tribunalâs order upholding the reopening of the assessment for the asst. yr. 1975-76 on the basis of the information contained in the order of the Tribunal for the asst. yr. 1974-75, in favour of the Revenue and against the assessee.
[Citation : 250 ITR 695]