JUDGMENT In spite of service to the assessee to engage another counsel, no step has been taken nor has anybody entered in reference on behalf of the assessee.
2. We heard Sri Shambhu Chopra, learned standing counsel for the revenue.
2. We heard Sri Shambhu Chopra, learned standing counsel for the revenue.
This is a reference under section 256(1) of the Income Tax Act, 1961, referring the following two questions :
3. Reference by the Commissioner of Income Tax R.A. No. 431 (All) of 1981, assessment year 1976-77 :
3. Reference by the Commissioner of Income Tax R.A. No. 431 (All) of 1981, assessment year 1976-77 :
"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the reopening of the assessment under section 147(b) was bad in law ?"
4. Reference by the assessee, R.A. No. 298 (All) of 198 1, assessment year 1977-78 :
4. Reference by the assessee, R.A. No. 298 (All) of 198 1, assessment year 1977-78 :
"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the reopening of the assessment under section 147(b) of the Income Tax Act, 1961, was valid ?"
5. In view of the judgment of the Supreme Court in Indian & Eastern Newspaper Society v. CIT (1979) 119 ITR 996, the information regarding the law by the assessing authority and not its interpretation by the audit party, if the assessing authority applies its mind on the said legal position and finds that it is a case for reopening, the reopening is valid on the ground mentioned under section 147(b) of the Act, 1961.
5. In view of the judgment of the Supreme Court in Indian & Eastern Newspaper Society v. CIT (1979) 119 ITR 996, the information regarding the law by the assessing authority and not its interpretation by the audit party, if the assessing authority applies its mind on the said legal position and finds that it is a case for reopening, the reopening is valid on the ground mentioned under section 147(b) of the Act, 1961.
6. A similar view has been reiterated in Tube Suppliers Ltd v. CIT (1995) 216 ITR 596 by the Madras High Court and Smt. Indira Devi v. CIT (1994) 210 ITR 537.
6. A similar view has been reiterated in Tube Suppliers Ltd v. CIT (1995) 216 ITR 596 by the Madras High Court and Smt. Indira Devi v. CIT (1994) 210 ITR 537.
7. In the instant case as the audit party has pointed out for the assessment year 1976-77 that the assessee was not manufacturing the goods itself rather it was getting them manufactured through some other party, he was not entitled for the benefit of the provisions of section 80J of the Act, 1961, and in the second question it has been pointed out by the report of the audit party that the accounts had not been audited as required under section 80J(6A) of the Act of 1961. The assessee was not entitled for the benefit under section 80J of the Act as the audit report in both the cases furnished the information regarding the law and communicated to the assessing authority.
7. In the instant case as the audit party has pointed out for the assessment year 1976-77 that the assessee was not manufacturing the goods itself rather it was getting them manufactured through some other party, he was not entitled for the benefit of the provisions of section 80J of the Act, 1961, and in the second question it has been pointed out by the report of the audit party that the accounts had not been audited as required under section 80J(6A) of the Act of 1961. The assessee was not entitled for the benefit under section 80J of the Act as the audit report in both the cases furnished the information regarding the law and communicated to the assessing authority.
8. The assessing authority had applied its mind on that law and, therefore, in view of the above, the first question in respect of the assessment year 1976-77 is answered in the negative, i.e., against the assessee and in favour of the revenue and the second question, which relates to the assessment year 1977-78, is answered in the affirmative, in favour of the revenue and against the assessee.
8. The assessing authority had applied its mind on that law and, therefore, in view of the above, the first question in respect of the assessment year 1976-77 is answered in the negative, i.e., against the assessee and in favour of the revenue and the second question, which relates to the assessment year 1977-78, is answered in the affirmative, in favour of the revenue and against the assessee.