RAM BILAS KEDAR NATH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a writ petition under Art. 226 of the Constittution directed against the notices issued under s. 22(4), S. 28(1)(a) and S. 46(5A) of the IT Act (hereinafter referred to as the Act). the prayer is for the quashing of the aforesaid notices issued in respect of the assessment proceedings for 1953 - 54 and 1954 -55. A prayer is also made to assess the firm, M/s Ram Bilas Kedar Nath, for the asst. yrs. 1953 -54 and 1954 -55.

(2.) THE petition is supported by an affidavit which makes allegations against the ITO of harassment. No counter -affidavit was filed and, therefore, the allegations made in the petition must be taken to be true. The only point urged by the learned standing counsel is, what he calls a legal point for which no counter -affidavit was necessary, and that is that a writ of mandamus can never issue so long as the ITO had jurisdiction to make the assessment. According to him there is no period of limitation at all in respect of an assessment made under S. 23 of the Act to which the provision of s. 28(1)(c) could be made applicable. In other words, his contention is that it is not obligatory on the ITO to make any assessment within the period of four years and it would be open to him, theoretically speaking, to keep such an assessment pending beyond the period of four years and to justify the completion of the assessment after a number of years on the ground that the provisions of S. 28(1)(c) were attracted. The question is whether that was the intention of the legislature in providing in S. 34(3) that the normal period of four years for completing an assessment will not apply to an order of assessment under S. 23 to which cl. (c) of sub -s. (1) of S. 28 applies.

(3.) THE learned standing counsel has conceded that a writ in the nature of certiorari may issue quashing all the notices issued under S. 46(5A) to the Upper India Sugar Exchange Ltd. and also the penal notices issued from time to time under S. 28(1)(a) of the Act relating to the proceedings under S. 34(1)(a) of the Act. The only question for consideration, therefore, that remains is the one set out hereinabove as to the bar of limitation to the making of an assessment in respect of voluntary returns filed after the lapse of four years. No penalty notice in fact was ever issued under s. 28(1)(c) of the Act during the course of the assessment proceedings under S. 23(4) of the Act and when that assessment order was set aside and the ITO was required to make an assessment on the basis of the voluntary returns filed by the assessee, he was bound to complete that assessment under S. 23 of the Act within the normal period of 4 years provided for the completion of all assessments under S. 34(3) of the Act, unless there exists a prima facie case for the applicability of the provisions of S. 28(1)(c) of the Act. If for four long years the ITO had not been able to glean any information from any outside source of any concealment and no notice under s. 28(1)(c) was issued when the assessment under S. 23(4) was completed by him, he cannot on any theoretical considerations or on the remote possibility of discovering some concealment in the future arrogate to himself the right to complete the assessment after the lapse of four years. If that were the law then no assessment need ever be completed within the normal period of four years and the sword of Damocles. could be kept hanging over the head of the assessees for all time to come. The ITO cannot by merely saying to himself that some day he may discover something which might justify his applying the provisions of S. 28(1)(c) confer upon himself the necessary jurisdiction to make an assessment under S. 23 without any bar of limitation.