SIDH GOPAL GAJANAND Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS petition under Article 226 of the Constitution has been filed by M/s. Sidh Gopal Gajanand, described as an "alleged association of persons" and by Budhoolal Mehrotra and Sidh Gopal Kapur.

(2.) THE petitioners say that M/s. Sidh Gopal Gajanand was a partnership firm, constituted under an instrument of partnership dated April 1, 1948, with its head office at Bombay and a brunch business at Kanpur styled as M/s. Ganga Textiles. THE partnership firm is said to have consisted of 19 members, two of whom are the petitioners, Budhoolal Mehrotra and Sidh Gopal Kapur. THE petitioners allege that the firm carried on wholesale cloth business from March 13, 1948, to July 1, 1949, and was dissolved on the latter date. THE firm was registered under Section 26A of the Indian Income-tax Act, 1922, for the assessment year 1949-50 and was assessed to income-tax accordingly. For the assessment year 1950-51, however, it was assessed as an unregistered firm. THE firm was assessed at Bombay.

(3.) AFTER the proceedings under Section 34 in respect of the firm had been commenced, it appears that the income-tax department came into information that another group of 18 persons, who included some of the members of the firm, had been carrying on business under the same name, M/s. Sidh Gopal Gajanand and had applied to the Chartered Bank of Australia and China, Kanpur, on July 26, 1948, for opening an account in their name. As the constitution of this entity was materially different from that of the firm the Income-tax Officer considered it reasonable to believe that this group of 18 persons was a different entity. They included the second and third petitioners. As no return had been filed by this entity and it had not been assessed to tax, the Income-tax Officer, A-B Ward, Bombay, issued a notice under Section 34 to the second petitioner calling upon him to file a return for the assessment year 1949-50. Apparently as the notice was issued to the petitioner in his individual capacity, a second notice dated January 5, 1962, was issued under Section 34 by the said Income-tax Officer to the second petitioner as member of an association of persons, M/s. Sidh Gopal Gajanand. The notices recited that the Commissioner of Income-tax, Bombay, was satisfied that it should be issued. A similar notice was served upon the third petitioner. As this notice also appeared to be invalid, a fresh notice dated February 28, 1962, under Section 34 was issued by the Income-tax Officer, A-B Ward, Bombay, to the second and the third petitioners "for and on behalf of the association of persons M/s. Sidh Gopal Gajanand" and recited that it was issued after obtaining the necessary sanction of the Central Board of Revenue, New Delhi. On March 27, 1962, a notice in the same terms addressed to 18 persons, including the second and third petitioners, was published in the Times of India.