ICE AND GENERAL MILLS Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner prays for a writ in the nature of certiorari against the notice under Section 148 of the Income-tax Act, 1961, dated July 14, 1967, and a writ in the nature of prohibition restraining the Income-tax Officer from taking proceedings pursuant to that notice.

(2.) THE petitioner carries on the business of the manufacturing of ice and the preservation of potatoes in cold storage. It was assessed to income-tax for the assessment year 1961-62 by an assessment order dated July 5, 1961. Subsequently, the Income-tax Officer issued a notice dated December 21, 1961, under Section 34(1)(a) of the Indian Income-tax Act, 1922, and upon the proceedings which followed made an assessment order dated December 22, 1965, THE petitioner appealed against the assessment order and the appeal was allowed by the Appellate Assistant Commissioner of Income-tax on May 10, 1967. THE Appellate Assistant Commissioner proceeded on the view that the notice under Section 34(1)(a) had been issued on the basis that the petitioner had not disclosed fully and truly all material facts in respect of its property income, and, as that was incorrect, there was no jurisdiction in the Income-tax Officer under Section 34(1)(a) and, therefore, he annulled the reassessment. THEreafter, it appears, the Income-tax Officer served a notice dated. July 14, 1967, issued under Section 148 of the Income-tax Act, 1961, for the same assessment year.

(3.) LEARNED counsel for the petitioner has referred us to Commissioner of Income-tax v. Rao Thakur Narayan Singh, 1965 56 ITR 234 ; [1965] 1 S.C.R. 990 (S.C.). That decision does not assist the petitioner at all. The Income-tax Officer there had issued a notice under Section 34 of the Act of 1922 and made an assessment order including in it the interest income as well as the forest income of the assessee. When the case was brought eventually before the Income-tax Appellate Tribunal, the Tribunal overlooked the fact that the only dispute subsisting related to the forest income and that it was admitted that the interest income had been disclosed by the assessee during the original assessment proceeding. The Tribunal made an order holding that the entire proceeding was without jurisdiction. The Income-tax Officer did not apply to the Tribunal for rectification of the order of the Tribunal, nor did he challenge the order before the High Court, and the matter became final. Instead, he initiated proceedings again under Section 34(1) of the Act for the purpose of assessing the interest income again. The Supreme Court held that the Income-tax Officer was bound by the finding of the Tribunal. It observed that the finding of the Tribunal that the Income-tax Officer had knowledge of the interest income as well as of the forest income at the time when the original assessment was made was binding upon him, and, therefore, it could not be said that the interest income had escaped assessment by reason of any failure or omission on the part of the assessee. In the present case, the facts are entirely distinguishable.