JUDGMENT
SMT. K. K. USHA, J. :
This reference, at the instance of the Commr. of Agrl. IT, Thiruvananthapuram under s. 60(1) of the Agrl. IT Act, 1950, arises from an order of the Kerala Agrl. Tribunal, Addl. Bench, Kottayam in AITA No. 41 of 1982. The relevant assessment year is 1974-75. The questions referred to this Court are as follows :
“(i) Whether, on the facts and in the circumstances of the case was the Agrl. Tribunal justified in its findings that the revised assessment made under s. 35 for the year 1974-75 is not in order ?
(ii) Whether the quantum of supersession made by the assessee was in the hands of the assessing authority at the time of original assessment ?”
2. The facts relevant are as follows : The assessee, M/s Panampunna Estates, Kottayam, is a registered firm. For the asst. yr. 1974-75, assessee returned a total income of Rs. 69,923. In the light of an inspection conducted by the Intelligence Officer, Kottayam on 5th August, 1975 in the estate and Head Office of the assessee, revealing heavy supersession in all aspects and serious inflation of expenses, books of accounts were rejected. Assessment was completed on a total income of Rs. 2,24,939 as per assessment order dt. 28th August, 1978. Thereafter, assessing authority issued proceedings under s. 35 of the Agrl. IT Act, 1950 and the assessment was completed as per order dt. 2nd July, 1979. Assessing authority reopened the assessment on the ground that value of 2748.9 kgs. of rubber, amounting to Rs. 14,294.28 had escaped assessment. This information was obtained by the assessing authority from the records seized by intelligence squad, Kottayam at the time of inspection of the estate and Head Office of the assessee-firm on 5th August, 1975 and 6th August, 1975.
3. Aggrieved by the above, the assessee filed appeal before the Dy. Commr. of Agrl. IT and ST contending that reopening could have been done only if information in respect of the income escaped was not in the hands of the assessing authority at the time of completing the original assessment. Appellate authority rejected the contention and dismissed the appeal. On second appeal, Tribunal was inclined to accept the contention. It took the view that the assessing authority went beyond his powers. He erred in completing the original assessment by not extracting and analysing all the relevant information made available to him from the records seized by the Intelligence squad. Later, when he came to know about his lapse, he issued notice under s. 35 to reopen the assessment. There was no sufficient information gathered by the assessing authority, after completing the assessment under s. 35 of the Agrl. IT Act, 1950. The above view is under challenge at the instance of the Revenue in this reference case.
4. We heard the learned Government pleader on behalf of the Revenue. There was no appearance for the respondent-assessee. It is contended by the learned Government pleader that the view taken by the Tribunal is directly against the principles laid down by decisions of this Court as well as decision of the Supreme Court. Reliance was placed by the learned Government pleader on the following decisions in support of his contention : K. K. Ismail vs. The State of Kerala (1979) 43 STC 123, Dy. CST (Law), Board of Revenue (Taxes) vs. T. P. Elias (1993) 90 STC 25, United Mercantile Co. Ltd. vs. CIT (1967) 64 ITR 218 (Ker) , Maharajadhiraj Sir Kameshwar Singh vs. State of Bihar (1959) 37 ITR 388 (SC) : 51R.1517 and Associated Stone Industries (Kotah) Ltd. vs. CIT JT 1997 (2) SC 401.
5. Relevant portion of s. 35 of the Agrl. IT Act, 1950 reads as follows :
“35. Income escaping assessment :
(1) If for any reason agricultural income chargeable to tax under this Act has escaped assessment in any financial year or has been assessed at too low a rate, the Agrl. ITO may, at any time within 5 (five years) of the end of that year serve on the person liable to pay the tax or in the case of a company on the principal officer thereof a notice containing all or any of the requirements which may be included in a notice under sub-s. (2) of s. 17 and may proceed to assess or reassess such income and the provision of this Act shall so far as may be, apply accordingly as if the notice were a notice issued under that sub-section.”
It is contended by the learned Govt. Pleader that as per the records seized by the Intelligence Squad Kottayam at the time of inspection on 5th August, 1975 and 6th August, 1975, the total crop for 1973-74 was 61904.9 kgs. of rubber. There was also a compounding of the offence. The yield of rubber fixed in the assessment for 1974-75 was 59156 kgs. Thus, value of 2748.9 kgs. of rubber had escaped assessment. The fact that the above difference was not noted at the time of original assessment, would not disable the assessing authority to proceed under s. 35, in view of the wording of s. 35 – If for any reason, agricultural income chargeable to tax under this Act has escaped assessment.
6. In 43 STC 124 (supra), a Division Bench of this Court had occasion to consider the scope of assessment of escaped turnover under s. 19 of the GST Act with similar wording. After referring to an earlier Bench decision of this Court in George vs. STO 1963 KLJ 769, the Division Bench held as follows :
“The reasons for escape may vary from case to case, but that is of no consequence. If the turnover is mentioned in the return, the escape may be due to the stupidity of the assessing authority. If it is not mentioned or so mentioned, as not to alert the assessing authority, the escape may be due to the cupidity of the assessee himself. But whatever be the reason, if an escape has occurred, it is an escape from assessment; what escapes is the turnover and r. 33(1) comes into play.”
According to learned judges, the wide and comprehensive way in which s. 19 of the KGST Act, 1963 opens is sufficient to make it clear that the power of reassessment can be exercised if, for any reason, the whole or any part of the turnover of a dealer has escaped assessment or has been underassessed or has been assessed at a lower rate. The reason being immaterial, it is of no consequence whether what happened was a mere change of opinion on the part of the succeeding officer from that formed by his predecessor. In view of the difference in the language of the concerned sections, the principles of the decision under s. 147 of the IT Act, 1961 can have no application to the cases under s. 19(1) of KGST Act, 1963.
7. The above decision was followed by a later Bench decision in (1993) 90 STC 25 (supra) and Dy. CST (Law), Board of Revenue (Taxes), Ernakulam vs. Cee Vee Kay & Co. (1996) 103 STC 55. It was held in (1993) 90 STC 25 that the section enables the assessing authority to bring to tax the turnover which has escaped assessment for whatever reason the turnover has escaped assessment. Reference was also made in this case to the decision of the Supreme Court in (1959) 37 ITR 388 (SC) (supra). In the above case, Supreme Court had occasion to consider the provisions contained under s. 26 of the Bihar Agrl. IT Act, 1938. The terms of the above section are in pari materia with s. 35 of the Agrl. IT Act, 1950. Relevant portion of s. 26 of the Bihar Act reads as follows :
“If for any reason any agricultural income chargeable to agricultural Income-tax has escaped assessment for any financial year, or has been assessed at too low a rate, the Agrl. ITO may, …. serve on the person liable to pay agricultural Income-tax on such agricultural income … a notice containing … and may proceed to assess or reassess such income …”
In the above case, accepting the contention raised by the assessee, exemption was granted in respect of certain amounts from payment of Agrl. Income-tax. After the assessee paid two instalments out of three after the assessment order, Agrl. ITO issued notice under s. 26 on the ground that agricultural income from certain lease, which should have been taxed, has escaped assessment. Supplementary assessment order was then passed. The assessee challenged reopening of the assessment. After referring to several decisions, including those which arose under s. 34 of the Indian IT Act, Supreme Court observed that the words of s. 26 of the Bihar Act, do not involve possessing of or coming by some fresh information. The use of the words “any reason” which are of wide import dispenses with those conditions by which s. 34 of the Indian IT Act is circumscribed. It was, therefore, held that Agrl. ITO was competent under s. 26 of the Act to assess an item of income which he had omitted to tax earlier, even though in the return that income was included and the Agrl. ITO then thought that it was exempt.
8. Going by the dictum laid down in the above decisions, it has only to be held in the facts of this case that the assessing authority has correctly exercised his jurisdiction under s. 35. But, it is necessary to refer to one more decision of this Court in M. S. Ramaraj vs. Commr. of Agrl. ITO (1981) 131 ITR 429 (Ker) In this Bench decision, the question whether, after the Agrl. ITO arrived at a finding on the basis of the opinion formed by him in respect of certain lease deed and completed assessment on that basis, a successor ITO, while affecting the assessment for the next assessment order, can re-examine the matter and come to a totally different conclusion and on that basis take proceedings under s. 35 of the Agrl. IT Act to reopen the assessment order already made. Without referring to the earlier Bench decision of this Court in R. S. Narayanan Shenoi vs. State of Kerala (1961) 12 STC 665 or K. K. Ismail vs. The State of Kerala (supra) or the decision of the Supreme Court in Maharajadhiraj Sir Kameshwar Singh vs. State of Bihar (supra), the learned judges observed that it is now well established that such a mere change of opinion on the part of either the same officer or his successor in regard to any relevant matter concerning tax liability of the assessee will not justify resort being taken to the power conferred by s. 35 of the Act. With great respect to the learned Judges, we are constrained to observe that the above observation is directly against the principles laid down in the earlier Bench decisions of this Court as well as in the decision of the Supreme Court.
9. As mentioned earlier, the provision in the Bihar Agrl. IT Act, which was subject matter of the decision by the Supreme Court in (1959) 37 ITR 388 (SC) (supra) was pari materia with the provisions contained under s. 35 of the Agrl. IT Act, 1950. Therefore, we would be fully justified in applying the dictum laid down by the Supreme Court in the above case to the facts of the present case. The provisions contained in s. 19 of the KGST Act, which were subject-matter for consideration in the decisions in (1993) 90 STC 25 and (1996) 103 STC 55 (supra) are also similarly worded.
10. Recently, the apex Court had occasion to consider an issue relating to assessment of escaped income under s. 34(1)(b) of IT Act, 1922. The relevant provisions read as follows :
“34. Income escaping assessment –
(1) If (a) …
(b) notwithstanding that there has been no omission or failure as mentioned in cl. (a) on the part of the assessee, the ITO has in consequence of information in his possession reason to believe that income, profits or gains chargeable to Income-tax have escaped assessment for any year, or have been underassessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed.
he may in cases falling under cl. (a) at any time and in cases falling under cl. (b) at any time within four years of the end of that year, serve on the assessee .. a notice”.
Supreme Court observed :
“It is now fairly settled that the information obtained by the ITO need not be one outside the record; it may be one obtained from the assessment records already available.”
Reference was made to the decision of a Constitution Bench in Anandji Haridas & Co. vs. S. P. Kasture AIR 1968 SC 565, where the Supreme Court had approved the following observation made by the Madras High Court in Salem Provident Fund Society Ltd. vs. CIT (1961) 42 ITR 547 (Mad) .
“We are unable to accept the extreme proposition that nothing that can be found in the record of the assessment which itself would show escape of assessment, or underassessment can be viewed as information which led to the belief that there has been escape from assessment or underassessment. Suppose a mistake in the original order of assessment is not discovered by the ITO himself on further scrutiny but it is brought to his notice by another assessee or even by a subordinate or a superior officer, that would appear to be information disclosed to the ITO. If the mistake itself is not extraneous to the record and the information gathered from the record, the immediate source of information to the ITO in such circumstances is in one sense extraneous to the record. It is difficult to accept the position that while what is seen by another in the record is information what is seen by the ITO himself is not information to him. In the latter case he just informs himself. It will be information in his possession within the meaning of s. 34. In such cases of obvious mistakes apparent on the face of the record of assessment, that record itself can be a source of information, if that information leads to a discovery or belief that there has been an escape of assessment or underassessment.”
Reference was also made to the decision of this Court in (1967) 64 ITR 218 (Ker) (supra) where the meaning of the word information was considered. It was held that inform means to impart knowledge and a detail available to the ITO in the papers filed before him does not by its mere availability, become an item of information. It is transmuted into an item of information in his possession only if and when its existence is realised and its implications recognised. Sec. 35 is couched in wide terms. Under the above section, an assessing authority can initiate proceedings if whole or any part of the turnover of the dealer has escaped assessment for any reason.
11. In view of the above, we have no hesitation to hold that the Agrl. Tribunal was not justified in its findings that the revised assessment made under s. 35 for the year 1974-75 was not in order. It is irrelevant whether the quantum of supersession made by the assessee was in the hands of the assessing authority at the time of original assessment or not. Even if these materials were available in the file, but were omitted to be taken into consideration by the assessing authority at the time of passing the original assessment order, initiation of proceedings under s. 35 would be justified on those materials.
In view of the above, we answer question No. 1 in the negative, in favour of the Revenue and against the assessee and decline to answer question No. 2.