RAJAN P SHAH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) IN these petitions, the notice dt. 11th Aug., 1981 issued by the ITO, Circle IIB (Spl), Surat, under s. 148 of the IT Act, 1961 (hereinafter referred to as 'the Act') is challenged on the ground that the said notice is illegal and without jurisdiction as the petitioners in both the petitions have disclosed the true facts at the time of completion of assessment proceedings for the year 1973 74.

(2.) THESE two petitions are heard together because they are based on the same facts. The petitioner (Shri Rajan P. Shah) in Special Civil Application No. 4057/1981 is the son of the petitioner (Smt. Nilavati P. Shah) in Special Civil Application No. 4058/1981. These petitions pertain to the asst. year 1973 74.

(3.) AT this stage it should be mentioned that for the asst. year 1972 73 the ITO, Circle II, Surat, had issued a notice under S. 148 of the Act upon the assessee on 18th Jan., 1977. After hearing the assessee, the ITO accepted the report of the valuation officer dt. 12th May, 1976 that the cost of construction of house at Nargole worked out scientifically at Rs. 42,000 for assessee's share exclusive of the investment of Rs. 4,800 for purchase of the land. On that basis the revised assessment order was issued by the ITO on 9th Jan., 1978. That order was set aside by the AAC Surat Range, Surat, by an order dt. 10th Oct., 1980 mainly on the ground that the construction of building in question was not completed during the asst. year 1972 73 and that the assessee had mentioned in the return for the asst. year 1972 73 that a sum of Rs. 3,351 was spent on purchase of cement and iron bars, etc., towards joint property to be constructed by the assessee along with her son and as such proceedings under S. 147 of the Act were not legal and the ITO was not justified in treating the sum of Rs. 19,211 as assessee's income from undisclosed sources. Subsequently, for the asst. year 1973 74 the impugned notice dt. 11th Aug., 1981 under S. 148 of the Act was issued on the ground that income chargeable to tax for the asst. year 1973 74 had escaped assessment within the meaning of S. 147 of the Act.