Section 147(b)

Section 147(b) — the law in short

What the courts have decided on section 147(b), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• ITO v Purushottam Das Bangur Supreme CourtHelps department
  The officer reopened my assessment the day after he got a letter from an investigation wing. Is a letter like that 'information' enough to reopen?
  Yes, on these facts. The Supreme Court held that a letter from the Deputy Director of Inspection, enclosing financial data on the company extracted from the Bombay Stock Exchange Directory, was definite information on which the Income-tax Officer could form the belief that income had escaped assessment. The data showed book value, earnings and dividends rising while the Calcutta quotations fell, which supported the inference that the quotations were manipulated and the real value of the shares was far higher than the sale price. Issuing the notice the next day, without further inquiry, did not show a failure to apply his mind. The High Court's orders quashing the notices were set aside.
• Indian and Eastern Newspaper Society v CIT Supreme CourtHelps taxpayer
  My assessment is being reopened because an internal audit party told the officer he applied the wrong head of income. Is an audit party's opinion on the law information for reopening?
  No. The Supreme Court held that the opinion of an internal audit party of the Income Tax Department on a point of law is not information within section 147(b). Law, for this purpose, must be created by a formal source - a competent legislature or a competent judicial or quasi-judicial authority - and an audit party performs administrative or executive functions with no power of judicial supervision over the officer's quasi-judicial acts. The part of an audit note that merely points to the law the officer overlooked is information; the part expressing the audit party's own opinion on how that law applies is not, and cannot be taken into account.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.