COMMISSIONER OF INCOME TAX, SHILLONG versus TARAJAN TEA CO. (P) LTD.

Citation: [1999] 1 S.C.R. 396 · Decided: 04-02-1999 · Supreme Court of India · Bench: M. SRINIVASAN, U.C. BANERJEE · Disposal: Dismissed

Judgment (excerpt)

' 
A 
COMMISSIONER OF INCOME TAX, SHILLONG 
v. 
TARAJAN '!'EA CO. (P) LTD. 
FEBRUARY 4, 1999 
B 
[M. SRINIVASAN AND U.C. BANERJEE, JJ.] 
.. 
Income Tax Act, 1961: Sectio11s 147(a) a11d (b) (As they stood before 
-.. 
1.4.1989) and 139. 
C 
Income Tax-Reassessment-Respondent-assessee-Assessment of--
No omission or failure on the part of the assessee to make a return under 
Section 139 as contemplated in Sectio11 147(a}-No information obtained by 
the assessing officer subsequent to Assessme11t Order-Assessment re-opened 
by ITO a11d notice issued under Section 147(aj-Ground that in the case of 
another Tea Company, the Appellate Assistant Commissioner had take11 the 
D view that sale' of standing trees constituted revenue receipts a111i, therefore, 
liable to tax-Held, neither clause (a) nor clause (b) of the Section 147would 
apply in this case-The order passed by the AA.C. in another case is not 
,,, 
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'i11formation' within the mea11ing of the sectio11 147-The order of the Assess-
ing Officer re- opening the earlier order and passing a fresh assessment order 
E held unsustainable. 
Income T~roceedings under Section 147(a)--Conversio11 into 
proceedings under Section 147(b) without issuing a fresh notice and initiation 
of a fresh proceeding-Questio11 left open. 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1941 of 
1993. 
I 
From the Judgment and Order dated 32.92 of the Gauhati High 
Court in l.T.R. No. 7 of 1986. 
G 
Dr. V. Gauri Shankar, Rajiv Nanda, P. Parmeshwaran and B.K. 
Prasad for the Appellant. 
Vijay Hansaria, Sunil Kumar Jain and Ajay Kumar Gupta for the 
Respondent. 
H 
The following Order the Court was delivered : 
396 
+-. 
C.l.T.v. TARATANTEACO.(P)LTD. 
397 
The three questions referred to the High Court for answer in this A 
-r • y 
matter are as follows : 
-
"l. Whether on the facts and in the circumstances of the ca~e, 
the tribunal having held that there was no case for re-opening the 
assessment under Section 147(a) of the Income Tax Act, 1961 on B 
the reason recorded, nor any cause for re-opening of the assess-
~ 
ment under section 147(b) of the Act on the reasons recorded on 
~ 
31.3.77 was justified in law in sustaining the re- opening of assess-
ment under section 147(b) of the Act on the reasons and grounds 
given in the order passed an appeal? 
c 
2. Whether on the facts and in the circumstances of the case, 
the Tribunal was jusified in law in holding that the re-assessment 
poceeding initiated under Section 147(a) of the Act by issue of 
notice dated 31.12.76 under Section 148 of the.Act on the reasons 
recorded, could be validly converted into a proceeding under D 
Section 147(b) of the Act subsequently? 
- .. 
3. Whether on the facts and in the circumstances of the case 
the Tribunal was justified in law in setting aside the order of the 
Appellate Assistant Commissioner of Income Tax cancelling the E 
re-assessment orders p~sed by the Income Tax Officer in ig-
norance of Section 144-B of the Act and in directing the Income 
Tax Officer to resort to the provisions of Section 144-B afresh 
inste~d of annuling and/or cancelling the re-assessment orders and 
without also taking into consideration the legal bar of limitation F 
for the passing of re-assessment orders under Section 153 of the 
Act?" 
_..4. 
I 
2. The short facts which gave rise to that reference were that the 
respondent-assessee was duly assessed by the Income Tax Officer (I.T.O.) 
for the relevant period on the basis of the information supplied by the G 
assessee. No particulars were left out by the assessee for enabling the 
completion of his assessment. However, the I.T.O. re-opened the assess-
~ 
ment and issued a notice under Section 147(a) of the Income Tax Act on 
the basis that in the case of another Tea Company, the Appellate Assistant 
Commissioner had taken the view that sale of standing trees constituted H 
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398 
SUPREME COURT REPORTS 
[1999] 1 S.C.R. · 
A revenue receipts and, therefore, liable to tax. The I.T.O. was of the opinion 
that the decision of the Appellate Assistant Commissioner in the other case 
would amount to 'information' within the meaning of Section 147(a) of the 
Act in so far as the assessee-company is concerned. 
B 
3. In the course of the proceedings under Section 147(a), the l.T.O. 
found that it could not be sustained under that sub- section and converted 
the same into a proceeding under Section 147(b) and concluded the matter. 
The order of the I.T.O. was challenged before 

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