The subsequent report of the valuation officer constituted information as to a fact, justifying the reopening of the assessment under s. 147(b) of the I.T. Act, 1961.

Puttaswamy, J.—M/s. Amrut Talkies, Hubli, common petitioner in these petitions, is a registered partnership firm and is engaged in the business of running a cinema theatre in the city of Hubli. The petitioner is an assessee under the I.T. Act, 1961 (hereinafter referred to as "the Act"), on the file of the Second Income Tax Officer, Hubli Circle, Hubli (hereinafter referred to as "the ITO").

2. For the assessment years 1974-75 and 1975-76 (relevant to the periods ending on October 26, 1973, and November 13, 1974, respectively, the petitioner filed its returns before the ITO, inter alia, disclosing that it had constructed a permanent theatre at a cost of Rs. 4,79,050 or so supported by a valuation report of a registered valuer (Exhibit A) in support of the cost of construction of the theatre. On an examination of the returns filed by the petitioner, the ITO by his assessment orders dated March 31, 1975, and June 1, 1976 (Exhibits B and C) completed the assessments for the aforesaid years accepting the cost of construction as estimated by the registered valuer.

3. On a reference made by the ITO on December 18, 1965, the official Valuation Officer of the Department by his report dated September 26, 1976 (Exhibit E) reported that the cost of the construction of the theatre was Rs. 6,12,000 as against Rs. 4,79,050 as stated by the petitioner and supported by the registered valuer. On the basis of that report of the official valuer, the ITO treating the same as an information as to a fact, has issued notices on November 22, 1976, under s. 147(b) of the Act to the petitioner for reopening the concluded assessments and has called upon it to file its returns within the stipulated time, the validity of which are challenged by the petitioner in these petitions under art. 226 of the Constitution.

4. Both sides are agreed that the impugned notices are issued on the basis of the report dated September 26, 1976, and no other materials, though they disagree on the question whether the same would constitute an information as to a fact.

5. Sri G. Sarangan, the learned counsel for the petitioner, has contended that the later report of the official valuer on the cost of construction of a building, having regard to the fact that the same varies from person to person from time to time, place and from valuer to valuer, does not constitute an information as to a fact to justify the reopening of the concluded assessments. In support of his contention, Sri Sarangan has strongly relied on the ruling of the Bombay High Court in Tulsidas Kilachand Vs. D.R. Chawla and Others, (1980) 122 ITR 458 Bom and "From our Reporter at the Supreme Court" reported in (1983) 141 ITR 47 (D. R. Chawla WTO v. Ram Das Kilachand) to the effect that the Supreme Court has dismissed S.L.P. (Civil) No. 5663 of 1980 under the heading "Reassessment : Departmental valuer's report : Whether constitutes 'information'."

6. Sri. K. Srinivasan, the learned senior standing counsel appearing for the Revenue, in justifying the impugned show-cause notices, urged that the report of the official valuer was an information as to a fact within the meaning of that expression occurring in s. 147(b) of the Act. In support of his contention Sri Srinivasan strongly relied on an unreported decision rendered by me in K. G. Kempur v. Second WTO (Writ Petition Nos., 6098 of 1977 and connected cases decided on May 30, 193)-since reported in K.G. Kemptur Vs. Second Wealth-tax Officer, ILR (1983) KAR 711.

7. The term 'in consequence of information' found in s. 147(b) of the Act was also found in s. 34(1)(b) of the Indian Act, 1922 (hereinafter referred to as the "1922 Act"), which stands repealed and replaced by the 1961 Act. The true scope and ambit of these sections have been explained by the Supreme Court in a large number of cases and it is enough to notice three leading cases on the aspect.

8. In Maharaj Kumar Kamal Singh Vs. The Commissioner of Income Tax, Bihar and Orissa, AIR 1959 SC 257, th