RAMAN A AND COMPANY Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS petition is for a writ of mandamus and/or prohibition or any other appropriate writ or orders, quashing or setting aside three notices dt. 28th March, 1964, issued under s. 147 of the IT Act, 1961, relating to the asst. yrs. 1959-60, 1960-61 and 1961-62, and prohibiting the respondent from proceeding with any reassessment pursuant to the said notices.

(2.) THE petitioner-firm was assessed to income-tax for the asst. yr. 1959-60 by the ITO, Circle II, Ward I, Ahmedabad, and for the asst. yrs. 1960-61 and 1961-62 by the ITO, Circle I, Ward A, Ahmedabad. For the asst. yr. 1962-63, the petitioner-firm filed its returns before the ITO, Circle I, Ward A, Ahmedabad, but its case was transferred to the ITO, Group Circle J, and at present the respondent is in charge of the assessments of the petitioner-firm for the asst. yrs. 1962-63 and 1963-64.

(3.) BY his letter dt. 20th March, 1964, the respondent informed the petitioner-firm that from scrutiny of the assessment records of the petitioner firm, its two partners and the said two HUF firms, he was satisfied that the partners of the petitioner-firm had contrived to divert the profits of the petitioner-firm to the said two HUF firms and had thereby tried to evade proper taxation leviable upon the petitioner-firm in respect of the aforesaid three assessment years, and called upon the firm to show cause why its assessment for the aforesaid three years should not be re- opened and the total income not re-determined. The petitioner-firm replied by its letter dt. 26th March, 1964, denying that there was any diversion of profits and stating that the gross profits earned by the petitioner-firm on sales made to the HUF firms had gone on increasing during the aforesaid three years, that all the material facts and the books of account with quantitative details of purchases and sales and the list of parties from whom the goods were purchased or to whom the goods were sold in large quantities, were furnished to the ITO at the time of the original assessments and that, consequently, the respondent did not possess any information which would justify him to re-open the aforesaid assessments and that the respondent had no jurisdiction to do so. The respondent, however, issued the three impugned notices dt. 28th March, 1964, under s. 148 of the Act, alleging that the income of the petitioner-firm chargeable to tax for the aforesaid three years had escaped assessment and that, therefore, he proposed to reassess its income for the said three years and required the petitioner-firm to file its returns of income within thirty days from the receipt of the said notices.