MAHARAJ KUMAR KAMAL SINGH versus THE COMMISSIONER OF INCOME-TAX, BIHAR & ORISSA

Citation: [1959] SUPP. 1 S.C.R. 10 · Decided: 01-10-1958 · Supreme Court of India · Bench: T.L. VENKATARAMA AIYYAR · Disposal: Dismissed
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Judgment (excerpt)

10 
SUPREME COURT REPORTS [1959] Supp. 
1 95.8 
In the result, the appeals are allowed, the decrees 
c . d 
J( . 
1 passed by the High Court are set aside, and those of 
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0
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aima the Courts below are rest-0red, with costs throughout. 
Lakshnii A mn1a 
V etikatarama 
Aiyar j. 
October I. 
Appeals nllowed. 
MAHARAJ KUMAR KAMAL SINGH 
11. 
THE COMMISSIONER OF INCOME-'.i'AX, BIHAR 
& ORISSA 
(VENKATARAMA AIYAR, GAJENDRAGADKAR and 
A. K. SARKAR JJ.) 
Income Tax-Re-assessment -
Escaped income -Assessment 
order based on statement of law subsequently found to be erroneous--
W hcther assessment can be reopened-" Information", 
"Escaped 
income", meaning of-Indian Income-tax Act, r922 (XI nf r922), 
as amended by Act 48 of r948, s. 34(r)(b). 
In respect of the assessment of the appellant to income-tax 
the Income-tax Officer excluded the amount of interest on 
arrears of rent received by him, in view of the decision of the 
Patna High Court in Kamakshya Narain Singh v. Commissioner 
of Income-tax, [1946] 14 I. T. R. 673, that this amount was not 
liable to be taxed, though an appeal against the said decision 
to the Privy Council at the instance of the Income-tax Depart-
ment was then pending. Subsequently on July 6, 1948, the 
Privy Council allowed the appeal and held that interest on 
arrears of rent payable in respect of agricultural land was i~ot 
agricultural income as it was neither rent nor revenue derived 
from land. 
As a result of this decision the Income-tax Officer 
took proceedings under s. 34 of the Indian Income-tax Act, 1922, 
as an1ended, and revised the assessment order by adding the 
aforesaid amount, on the footing that the subsequent decision of 
the Privy Council was information within the meaning of 
s. J4(1)(b) of the Act and that the Income-tax Officer had reason 
to believe that a part of the assessee's income had escaped 
assessment. It was contended for the appellant that s. 34(1)(b) 
was not applicable to the case because (1) the information 
referred to in the section means information as to facts and can-
not include the ilecision of the Privy Council on a point of law, 
(I) S.C.R. 
SUPREME COURT REPORTS 
11 
and (2) where income has been duly returned for assessment and 
an assessment order has been passed by the Income-tax Officer, 
it cannot be said that any income has escaped assessment within 
s. 34(1)(b). 
Held, ( l) that the word " information " in s. 34( l )(b) of the 
Act includes information as to the true and correct state of the 
law and so would cover information as to relevant judicial 
decisions; and, 
. 
(2) that the expression 
"has escaped assessment " in 
s. 34(1)(b) cannot be given a restricted meaning confining it only 
to cases where no return has been submitted by the assessee. 
The section is applicable not only where income has not been 
assessed owing to inadvertence or oversight or owing to the fact 
that no return has been submitted, but also where are turn has 
been submitted, but the Income-tax Officer erroneously fails to 
tax a part of assessable income. 
Rajendra Nath Mukherjee v. Income-tax Commissioner, (1933) 
L.R. 61 I. A. IO and Messrs. Chatturam Horliram Ltd. v. Com-
missioner of Income-tax, Bihar and Orissa, [1955] 2 S.C.R. 290, 
distinguished. 
Raja Benoy Kumar Sahas Roy v. Commissioner of Income-tax• 
West Bengal, [1953] 24 I.T.R. 70, Madan Lal v. Commissioner of 
Income-tax, Punjab, [1944] 12 l.T.R. 8 and The Commissioner of 
Income-tax v. Raja of Parlakimedi, (1926) I.L.R. 49 Mad. 22, 
approved. 
Maharaja Bikram Kishore of Tripura v. Province of Assam, 
[1949] 17 1.T.R. 220, disapproved. 
C1v1L APPELLATE JuRISDICTION: 
Civil Appeal No. 
297 of 195t>. 
Appeal from the judgment and decree dated April 7, 
1954, of the Patna High Court in Misc. Judicial Case 
No. 327 of 1951. 
A. V. Viswanatha Sastri and B. K. Sinha, for the 
appellant. 
K. N. Rajagopala Sastri, R.H. Dhebar and D. Gupta, 
for the respondent. 
1958. October I. The Judgment of the Court was 
delivered by 
Kamal Singh 
v. 
Commission1r of 
l11com1-t11~ 
( 
GAJENDRAGADKAR J.-This is an appeal with the Gajendragadkar ]. 
certificate issued by the High Court of Judicature at 
Patna under s. 66A(2) of the Income-tax Act (herein-
after called the Act) and it raises a short question 
of the construction of s. 34(l)(b) of the Act. This 
12 
SUPREME COURT REPORTS [1959] Supp. 
r95s 
question arises in this way. 
Proceedings were taken 
Kamal Singh 
by the Income-tax Officer, Special Circ
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