CLAGGETT BRACHI CO.LTD., LONDON vs COMMISSIONER OF INCOME-TAX, A.P.

The Supreme Court held that under Sections 147 and 148 of the Income Tax Act, 1961, the Income Tax Officer has the jurisdiction to reassess a non-resident assessee if it is found that income has escaped assessment due to a mistake in the original computation. The Court ruled that the reassessment was valid as it was based on new information obtained during the assessment of a subsequent year, which indicated that overhead expenses were related to the entire business. The appeals by the assessee were dismissed, affirming the High Court's decision that reassessment could be initiated directly against the assessee despite prior assessments on its agents.