UNION OF INDIA Vs. SETH R DALMIA

JUDGEMENT

(1.) These six appeals by certificates granted by the High Court of Delhi arise out of six writ petitions filed by the respondent before us challenging the validity of six notices dated September 7. 1965 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act). The notices relate to the assessment years 1949-50 1950-51 and 1951-52, the corresponding accounting years ending on the 30th September of 1948, 1949 and 1950 respectively. Three of the notices were issued to the petitioner in his individual capacity and the other three were served on him as a member of an association of Persons. The petitioner had been assessed as an individual for the aforesaid assessment years in accordance with the provisions of the Indian Income Tax Act, 1922. Thereafter a Commission known as Vivian Bose Commission was appointed to enquire into the affairs of various companies with which the appellant was alleged to have been associated. On the facts disclosed in the report of enquiry, the Income-tax Officer, Special Investigation Circle A, New Delhi, issued the aforesaid two sets of notices to the petitioner under Section 148 of the Act. The notices informed the petitioner that these were issued "after obtaining the necessary satisfaction of the Central Board of Direct Taxes, New Delhi". This claim was questioned by the petitioner in the High Court and one of the grounds on which the validity of the notices was challenged was that sanction of the Central Board of Direct Taxes had not been taken before the notices were issued as required by Section 151 of the Act. The High Court accepting this contention quashed all the six notices served on the petitioner and by issuing a writ of prohibition restrained the appellants, the Union of India, the Central Board of Direct Taxes, New Delhi and the Income-tax Officer, Special Investigation Circle A, New Delhi from taking any action upon these notices. As the writ petitions succeeded on this ground, the High Court did not consider the other objections to the notices raised in, the petitions. The propriety of that decision is in question in these appeals.

(2.) The relevant part of S. 151 of the Act reads as follows:

(3.) An affidavit affirmed by Shri J. P. Singh who at the relevant time was the Chairman of the Central Board of Direct, Taxes and ax-officio Additional Secretary to the Government of India in the Ministry of Finance, was also filed on behalf of the appellants Paragraphs 3 to 7 of Shri Singh's affidavit state how Shri Narayana Row came to deal with the cases relating to the reopening of assessments. These paragraphs read as follows: