Information that a particular business is not a partnership and that the assessee was the sole proprietor or that the entire income from that business was not included in his original assessment is new information within the meaning of Section 34(1)(b) of the Income-tax Act, 1922.

Mahapatra, J.

1. These four references under Sec. 66, Clause (1) of the Indian Income-tax Act, relate to the assessment years 1952-53, 1953-54, 1954-55 and 1955-56. The assessee derived income, during the period relating to these four assessment years from contract business, from property and share in the firm Narainji Manji Rathore. The above firm was assessed as a registered firm during those years in which the assessee had 0-12-0 annas share. Assessments were also made on two other partners of the firm on total income consisting of their respective shares of income from that firm and salaries received by them therefrom. On the 22nd March 1957 the registration of that firm was cancelled under Rule 6B of the Income-tax Rules relating to these four years on the ground that the present assessee Narainji Manji Rathore, was the proprietor of that business and that it was not actually a partnership firm. Since the assessee had been assessed on his share income from that firm, the Income-tax Officer reopened the assessment after serving a notice under Sec.34 of the Act in respect of those four years as the entire income from that firm was not included in the assessees total Income.

When the re-assessments were completed, the assessee went in appeal and the Appellate Assistant Commissioner, by his order, dated the 31st May 1961, held, in connection with the assessment year 1952-53 that there was no omission or failure on the part of the assesses to disclose fully and truly all material facts necessary for the assessment. All the relevant facts were before the Income-tax Officer at the time of the original assessment. Since no fresh fact was found subsequent to the completion of the assessment, the re-assessment under Sec.34 of the Act was annulled. For the three other assessment years (viz., 1953-54, 1954-55 and 1955 56) the same Appellate Authority held likewise. When the matter came before the Tribunal at the instance of the Department of Income-tax, the view of the Appellate Assistant Commissioner was upheld. The Revenue, therefore, asked for a reference to this Court under Sec. 66 (1) of the Act.

2. Sec.34 of the Act enables the assessing officer to initiate fresh assessment if any income of the assessee had escaped assessment either on account of suppression of material facts by the assessee in his return or at the time of assessment or if on information received by the Income-tax Officer, after the original assessment, he finds that some income had not been included in the total income assessed. In the present case the information that came to the Income-tax Officer, after the cancellation of the registration of the firm, Narainji Manji Rathore, was that the assessee was not a partner, but the proprietor of that firm and that the entire income of that business run under the name of that firm had not been included in the assessees total income, but only a part of it. Since a part of that income had escaped assessment in hands of the assessee he initiated the proceeding under Sec.34 of the Act. It is true that all facts connected with the firm had been disclosed to the Income-tax Officer by the assessee at the time of the original assessment, and therefore, the view taken by the Appellate Tribunal that the assessee was not guilty of any suppression as contemplated under Sec.34 (1) (a) was correct. But, the case can well be covered by Clause (b) of Sub-section I of that section. The Appellate Tribunal was of the view that since notices were issued under Sec.34 (1) (a) by the Income-tax Officer, it was not open to the Department to take over under the provisions of Clause (b) of Sub-section (1). We have looked to the original notices and have found that neither Sub-clause (a) nor Sub-clause (b) was mentioned therein. It was only under Sec.34 and that can cover either of the two clauses. In that view of the matter, the re-assessment, as made by the Income-tax Officer, could be justified, if the conditions under Clause (b) w