DURGA PRASAD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a writ petition under article 226 of the Constitution directed against the notice issued under section 34(1)(a) of the Indian Income-tax Act, 1922, (hereinafter referred to as the Act), for the assessment year 1949-50 on the 27the of September, 1958.

(2.) THE facts are not in dispute. Briefly stated they are that the petitioner No. 1 is one of the ex-partners of firm, Messrs. Mayaram Durga Prasad, which was a registered firm carrying on business of commission agency, speculation business and business in gur in his own account. THE firm filed a return showing a loss of Rs. 6,099 for the assessment year the Income-tax Officer noticed certain cash credits in the books of the firm in various names totalling Rs. 45,500. THE firm failed to prove the genuineness of the cash credits and the Income-tax officer, therefore, added a sum of Rs. 45,500 as income for the assessment year 1950-51 as from an undisclosed source. THE Appellate Assistant Commissioner confirmed this finding. On further appeal to the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal) the appeal was allowed on the short ground that if the cash credits were the income of the assessee-firm they could not be assessed in the assessments year 1950-51. THE order of the Tribunal is a short one and may be reproduced with advantage as the entire point in this writ petition turns on the question as to whether the impugned notice under section 34(1)(a) issued on the 27th September, 1958, was a notice which could be said to have been issued in consequence of the finding given by the Tribunal. THE order of the Tribunal reads :

(3.) THE attention of the bench which decided in Hazari Lals case does not appear to have been drawn to an earlier case decided by the Bombay High Court v. R. Indurkar v. Pravinchandra Hemchand, where the dame view had already been taken. In that case the Appellate Assistant Commissioner in allowing the appeal for assessment year 1945-46, had further stated :