Meaning of “Information/reason”

Case Name : H.L. Sibal Vs. CIT

Citation :[1975] 101 ITR 112 (PUNJ. & HAR.)

Court : Punjab & Hariyana High Court

Section : 132

Meaning : The word ‘information’ has been defined in the shorter oxford dictionary as ‘that of which one is apprised or told’. The word ‘reason’ has been defined as ‘a statement of fact employed as an argument to justify or condemn some act’. On the other hand, the word ‘conclusion’ is defined as ‘a judgment arrived at by reasoning; an inference; deduction, etc.’ In other words, when the information received or the basic facts are harnessed in support of an argument, the resultant effect assumes the shape of a reason and when a number of reasons are considered in relation to each other, the final result of this consideration assumes the shape of a conclusion. A necessary concomitant of this approach is that the facts constituting the information must be relevant to the enquiry. They must be such from which a reasonable and prudent man can come to the requisite belief or conclusion. If either of the aforementioned elements is missing, the action of the authority shall be regarded as lying outside the ambit and scope of the act. Such an action would be liable to be struck down on the basis of what is commonly known as ‘legal malice’.

Case Name : Sikkim Subba Associates Vs. Union Of India

Citation :[2005] 147 TAXMAN 250/276 ITR 456 (SIKKIM)

Court : Sikkim High Court

Section : 132

Meaning : For invoking section 132, the authority concerned must be in ‘possession’ of ‘information’. The expression ‘information’ has been held to be not rumour, gossip or other irrelevant information. Further, the information should be legal and constitutional, i.E., The authority concerned can under the law or the constitution not only retain such information but can also use the same for any purpose. Thus, rumour, gossip, intuition or irrelevant information cannot be termed as ‘information’ as no reasons to believe can be formed on such information. Reports/letters/notes of one government department to the income-tax authority cannot be regarded as information for the purposes of section 132.

Case Name : M.S. Associates Vs. Union Of India

Citation :[2005] 275 ITR 502/147 TAXMAN 172 (GAUHATI)

Court : Gauhati High Court

Section : 132

Meaning : Information’, according to the shorter oxford dictionary, means “that of which one is apprised or told”. Webster’s encyclopaedic unabridged dictionary (1989 edition) states that ‘information’ means ‘knowledge communicated or received concerning a particular fact or circumstance; knowledge gained through communication, research instruction, etc”. ‘Information’ may be oral or written. The word ‘information’ must, therefore, be given wider meaning, for a narrower construction may defeat the object of section 132(1), which is directed against persons, who are believed on good grounds to have evaded payment of tax on their income and property-see pooran mal v. Director of inspection (investigation), income-tax reported in [1974] 93 itr 505; air 1974 sc 348. The words ‘information in his possession’ occurring in section 132(1), should be construed as some definite information in the possession of the authority/authorities specified in section 132(1) and not any imaginary information. How that information comes to the possession of the revenue is quite immaterial. In maharaj kumar kamal singh v. Cit [1959] 35 itr 1 the supreme court, while construing section 34(1)(b) of the indian income-tax act, 1922, has held that the word ‘information’ appearing therein should be treated to mean not only facts or factual materials, but should also include information as to the true and correct state of the law. Subsequently, the supreme court in cit v. A. Raman & co. [1968] 67 Itr 11, defined the expression ‘information’, occurring in section 147(b) of the income-tax act, 1961, as instruction or knowledge derived from an external source concerning facts or particulars or as to the law relating to a matter, which has bearing on the assessment. What transpires from the above discussion is that the word ‘information’ is nothing but knowledge communicated or received concerning a particular fact or circumstance. The source of information is not material; but the ‘information’ must not be a mere gossip, rumour, hunch or intuition.

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