R. K. MALHOTRA, I.T.O.GROUP CIRCLE II(1), AHMEDABAD vs KASTUR BHAI LALBHAI (H.U.F.)

The Supreme Court held that for invoking Section 147(b) of the Income Tax Act, two conditions must be satisfied: (1) the Income Tax Officer must receive information after the original assessment, and (2) this information must lead to a belief that income has escaped assessment. The Court clarified that 'information' can include legal interpretations provided by competent authorities, and the Audit Department's findings can constitute such information. The appeal was allowed, overturning the High Court's decision that quashed the reassessment notice.