P K NAIR Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This petition under Art.226 of the Constitution seeks to set aside notices Exs. P3, P3(a), P3(b), P3(c) and P3(d) issued under S.148 of the Income Tax Act, 1961 (hereinafter referred to as the Act) for the years 1950-51, 1951-52, 1952-53, 1953-54 and 1954-55 respectively. Very briefly stated, the grounds are that the Income Tax Officer had no reason to believe and had no material before him for that belief that the income amounting to Rs. 50,000/- had escaped assessment or was likely to have escaped assessment for any of the years mentioned above and had therefore no jurisdiction to reopen the assessments that had been completed long years ago. This has come up before us on an order of reference by Mathew J. in view of the question whether a remedy by an application under Art.226 of the Constitution would be available to an assessee in regard to notices issued under S.148 of the Act for reassessment as envisaged by S.147 of the Act. At the time the learned Judge heard the case assessment orders had been passed and appeals had been filed by the assessee and those appeals were pending. It was therefore urged on behalf of the revenue that the petition should be dismissed as the assessee had right to have the matter decided by the Appellate Assistant Commissioner and had a further right in second appeal and even on a reference to this Court. Counsel for the assessee relied on the decision of the Supreme Court in Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies District I. Calcutta and another ( 1961 (41) ITR 191 ) and contended that this Court has not only jurisdiction but that this is a fit case where this Court should interfere if it is satisfied that there was no material available before the Income Tax Officer on which it was reasonably possible to infer that the income of the requisite amount had escaped assessment as detailed in S.149 of the Act. We shall deal with this question first.

(2.) The circumstances under which this Court will have jurisdiction to deal with applications of this nature have been detailed in the Supreme Court decision in Commissioner of Income Tax, Gujarat v. A. Raman and Co. ( 1968 (67) ITR 11 ). We shall extract a part of the head note which correctly depicts the dicta in the case.

(3.) It is on the same principle that the Supreme Court in Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies District I, Calcutta and another (41 ITR 191) interfered in proceedings under Art.226 of the Constitution and quashed not only the notice under S.34 of the Indian Income Tax Act, 1922 corresponding to S.147 of the Act but quashed the assessment which had taken place pursuant to that notice after the institution of the proceedings under Art.266 of the Constitution.