1. JUDGMENT The judgment of the court was delivered by Ranganthan J.].-These two references under Section 66 of the Indian I.T. Act, 1922, can be disposed of by a common judgment. They are cross-references at the instance of the Commissioner of Income-tax and the assessee, Smt.
2. Pratap Kumari of Alwar, and arise out of the assessment order of the ITO for the assessment year 1959-60, for which the previous year ended on March 31, 1959. A few facts may be stated which are necessary for the disposal of these references.
3. The assessee is the daughter of Shari Sewai Maharaj Dev Sir Tej Singhji of Alwar. She was married to Shri Digvijay Singhji of Wankaner on April 21, 1955. The marriage, however, did not turn out to be a happy one and on October 15, 1958, an agreement was arrived at between the assessee and her father on the one hand and her husband and father-in- law on the other. Under this agreement, the assessee received a cheque for Rs. 4 lakhs, Rs. 3 lakhs from her father-in-law and Rs. 1 lakh from her husband. This under the agreement was described as 'Tum sum maintenance allowance for her lifetime". The assessee was being paid a maintenance allowance of Rs. 600 per month from her father-in-law earlier. But this was discontinued with effect from October 15, 1958.
4. When the assessm ent proceedings of the assessee for the assessment year 1959-60 were taken on hand the ITO wrote a letter to the assessee on December 27, 3961. Ln this letter, he stated that he understood that the assessee had received a sum of Rs. 9 lakhs from Wankaner and wanted to know if this amount had been received by way of tilak money, and also, whether the assessee had received any amount for maintenance as a result of an agreement for separation. It may be mentioned at this stage that the assessee had also received other monies from the Wankaner family, which are not relevant for the purpose of the present case, and this is how the ITO refers to a sum of Rs. 9 lakhs.
5. Ln reply to the letter of the ITO the assessee wrote back on February 12, 1962, furnishing full details of the amount of Rs. 9 lakhs received by her from Wankaner. The assessee also stated that from April, 1956, to October 15, 1958, she had received a maintenance allowance at Rs. 600 per month. She also stated that the agreement dated October 15, 1958, and another agreement subsequently entered into in February, 1960, which had already been submitted to the ITO and perused by him, were self-explanatory. It was pointed out that the assessee had received Rs. 4 lakhs as maintenance in lump sum, Rs. 1 lakh for chundri and padla jewellery and Rs. 4 lakhs by way of tilak money. The ITO also appears to have written to the assessee father on February 13, 1962, concerning the reasons why he had transferred an amount of Rs. 4 lakhs to the assessee. This query had reference to the cheque by way of Rs. 4 lakhs received by the assessee father from the Wankaner family towards the return of tilak money, etc., which he passed on to his daughter. The assessee father replied on February 15, 1962, giving the details and also referring to the agreements which had already been placed on the file.
6. After the above correspondence had taken place, on 28th February, 1962, the ITO completed the assessm ent on a total income of Rs. 10,947.
7. Ln other words, he did not bring to tax any portion of the money which the assessee had received from the Wankaner family.
8. Subsequently, however, the ITO appears to have had second thoughts in the matter. On March, 4, 1964, he issued a notice under Section 148 read with Section 147(b) of the I.T. Act, 1961, and completed the reassessm ent on October, 19 1964, including in such reassessment the sum of Rs. 5 lakhs.
9. The assessee appealed against the reassessment raising an objection that the proceedings under Section 147(b) had not been validly initiated. It was also contended that the amount of Rs. 5 lakhs was not assessable to tax. The AAC, however, upheld the reopening of the assessment and he sustained the addition to the extent of Rs. 4 lakhs.
10. The assessee preferred a further appeal to the Tribunal. At the first hearing, the learned Accountant Member was of the opinion that the order of the AAC should be upheld. He was of the opinion that the reopening of the assessm ent was valid and further that the sum of Rs. 4 lakhs was a revenue receipt. The learned Judicial Member, however, disagreed oh both the points. Thereafter, the matter was referred to a third member who agreed with the learned Judicial Member in so far as the reopening of the assessm ent was concerned. But so far as the merits were concerned, he agreed with the learned Accountant Member. The final result was that the Tribunal held that the proceedings for reassessm ent under Section 147(b) were not validly initiated. Though the Tribunal by a majority was of the view that a sum of Rs. 4 lakhs constituted a revenune receipt and was taxable in the hands of the assessee that decision was purely of academic importance inasmuch as the initiation of the reassessm ent proceedings was not valid.
11. Out of tae aforesaid order of the Tribunal al, the assessee and the Commissioner have sought references of the two questions which have been now referred for our decision: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the proceedings for the reassessm ent under Section 147(b) of the Income-tax Act, 1961, were invalid in law?
2. If the answer to question No. 1 is in the negative, then, whether, on the facts and in the circumstances, the amount of Rs. 4 lakhs could be brought to tax in the total income of the assessee in the assessm ent year 1959-60?"
12. We have heard the learned counsel for the parties and we are of the opinion that on the facts and in the circumstances of the case the view taken by the Tribunal on the first question has to be upheld. In view of this the second question becomes academic and it is unnecessary to answer the same. ' We shall, therefore, proceed to give, in brief, our reasons for the conclusion on the first question.
13. In Kalyanji Mavji & Co. v. CIT [1976] 102 ITR 287 the Supreme Court pointed out that an assessment once completed can be reopened under Section 147(b) (corresponding to Section 34(l)(b) of the 1922 Act) in the following categories of cases (headnote): "(1) where the information is as to the true and correct state of the law derived from relevant judicial decisions;
(2) where in the original assessm ent the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income-tax Officer;
(3) where the information is derived from an external source of any kind, such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of original assessment; and (4) where the information my be obtained even from the record of the original assessment from an investigation of the materials open the record or the facts disclosed thereby or from other enquiry or researched into facts or law.
14. Where, however, the Income-tax Officer gets no subsequent information, but merely proceeds to reopen the original assessm ent without any fresh facts or materials or with out any enquiry into the materials which form of the original assessment, Section 34(1)(b) would have no application."
15. The principles laid down in the above case were slightly modified by the Supreme Court in the recent decision in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996. At p. 1004, referring the earlier decision regarding the circumstances which have been set out above, the court observed (p. 1004); "Reliance is placed on Kalyanji Mavji & Co. v. CIT [1976] 102 ITR 287 (SC), where a Bench of two learned judges of this court observed that a case where income had escaped assessment due to the 'oversight, where income or mistake' of the ITO must fall within Section 34 (1) (b) of the Indian I.T.
16. Act, 1922. It appears to us, with respect, that the proposition is stated too widely and travels further than the statue warrants in os far as it can be said to lay down that if, on repraising the material considered by him during the original assessment, the ITO discovers that he has committed an error in consequence of which income has escaped assessment, it is open to him to reopen the assessm ent. In our opinion, an error discovered on a reconsideration of the same material (and no more) does not give him that power. That was the view taken by this court in Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 (SC), CIT v. Raman and Co. [1968] 67 ITR 11 (SC) and Bankipur Club Ltd. v.
17. CIT [1971] 82 ITR 831 (SC) and we do not believe that the law has since taken a different course. Any observations in Kalyanji Mavji & Co. v. CIT [1976] 132 ITR 287 (SC) suggesting to the contrary do not, we say with respect, lay down the correct law.
18. The court also observed that a mere realisation by the ITO would not constitute information.
19. We think that in the light of the above recent pronouncement of the Supreme Court, the view taken by the Tribunal in the present case that the provisions of Section 147(b) were not properly invoked, has to be upheld. At the time of the original assessment the ITO's attention had been specifically drawn to the payments received by the assessee in connection with the agreement for apparation.
20. He had come to know that the assessee had received large sums of money. He also thought that some portion of these monies might be taxable in the hands of the assessee. He, therefore, wrote to the assessee, raising specific queries in regard to the matter. The assessee gave detailed replies.
21. The agreements were given. The fact of the receipt of the monies was admitted. It was mentioned that a part of the receipt in lieu of maintenance. It was brought to the notice of the ITO that with effect from the date of the agreement, the maintenance wich was previously being paid had been suspended. With all the information before him and with all these facts brought out in reply to his specific queries the ITO company the original assessment in which he did not include any part of the amounts received by the assessee. Ln other words, alter considering the entire matter he had taken a decision that no part of the amount was taxable in the hands of the assessee.
22. Subsequently, no fresh information has come into his possession. There is nothing whatsoever to show that he had received any information either in the case of the present assessee or otherwise as a result of which he had reason to believe that the view taken by him was wrong. This is a simple case where, on a reappraisal of the very same material, which he had earlier obtained, the ITO thought of taking a different view and initiated the proceedings. The action of the ITO was clearly without legal warrant in the light of the well- settled position regarding action under Section 147(b).
23. For the above reasons we answer the first question referred to us in the affirmative and in favour of the assessee. As already stated, in view of the answer to the first question in the affirmative, an answer to the second question is not necessary and we decline to answer the same. There will be no order as to costs..
24. A