Opinion expressed by Board of Revenue was held to be "information"

1. The Nizam of Hyderabad, had created a trust for the benefit of his family and dependants. One of the beneficiaries was a step sister of the Nizam, to whom an annuity of Rs. 12,000 had to be given. She died on 10-11-1955. The property passing on her death became liable to estate duty under the Act.

2. The Assistant Controller created a demand at Rs. 83,519.40.

3. The trustees preferred an appeal before the Central Board of Revenue disputing the correctness of the valuation of the estate by the Assistant Controller. The Board held that the securities in question had not been overvalued but had been undervalued.

4. The Assistant Controller issued a notice on 12-8-1960, to the trustees in exercise of the powers conferred by the newly amended section 59, that property chargeable under the Act to estate duty had escaped assessment by reason of undervaluation and, therefore, a statement of account was called for in respect of the market value of the securities of Rs. 4.5 crores.

5. The respondents challenged the notice in the High Court challenging the validity and legality of the notice issued under section 59. The Revenue also filed a writ petition in the High Court that section 59 was applicable and that the Central Board of Revenue had expressed the opinion that the correct value of the securities should be 78 per cent of the face value as against 52 per cent as adopted in the assessment order and the appellate order had been received on 15-8-1959, and, therefore, the appellant was fully justified in issuing the notice as he had reason to believe by virtue of information which had come into his possession that the securities had been undervalued.

6. The High Court held that the appellant had no jurisdiction under section 59 to reopen a matter which had been completed and which had become final before 1-7-1960. It also held that the opinion of the Central Board of Revenue did not amount to ‘information’ within the meaning of section 59(b). The writ petition, consequently was allowed.

7. The appellant appealed to the Division Bench of the High Court, which did not decide whether section 59 was applicable or not. It heldthat a mere expression of opinion by the Central Board of Revenue did not amount to ‘information’ within the meaning of section 59(b) of the Act.

8. On appeal the Supreme Court held as under:

When the expression "information" is understood in the sense of instruction or knowledge derived from an external source concerning facts or particulars or as to law relating to a matter bearing on the assessment, it is difficult to see how determination of valuation for the purpose of assessment of estate duty would not squarely fall within the meaning of the expression "information" in the context in which it occurs in section 59 of the Act. It has not been disputed, and can indeed not be disputed, that the provisions of section 59 are in pan materia with section 34 of the Income-tax Act, 1922, and section 147 of the Income-tax Act, 1961. The (opinion expressed by the Board of Revenue, in the present case, as to valuation, was clearly "information" in the sense in which that expression has been held to have been used these enactments. The view of the High Court on this point could not be sustained for the aforesaid reasons. The Division Bench did not decide the first point which related to the applicability of section 59 to assessments completed before the amendment Act came into force. This matter will have to go back for decision of that question. The appeal is allowed and the order of the High Court set aside.

The case is remanded to the High Court for disposal in accordance with law.