RENUSAGAR POWER CO LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a petition under Art. 226 of the Constitution for quashing the notices dt. 31st March, 1976 and 6th Sept., 1976 issued by the ITO 'A' Ward, Varanasi and for a writ of mandamus directing the respondents for taking any proceeding in pursuance of the notices mentioned above. These notices had been issued under S. 148 of the IT Act. 1961 (hereinafter referred to as "The Act").

(2.) THE facts of the case lie within a narrow compass, Renusagar Power Co. Ltd., the petitioner is a subsidiary company of Hindustan Aluminium corporation Ltd., Renukoot, Mirzapur. The petitioner company is engaged in the business of generation and supply of power. For the asst. yr. 1972-73, the corresponding finical year of which is form 1st Jan., 1971 to 31st Dec., 1971, the petitioner filed its returns of income. By an order of assessment dt. 22nd March, 1975 the ITO assessed the petitioner company and substantially accepted the returns filed by it. On a application made by the petitioner of 24th May, 1975, under S. 154 of the Act, the ITO rectified the mistake alleged to have crept in the assessment order dt. 22nd March, 1975.

(3.) A counter-affidavit was filed by Shri K. K. Rai, ITO 'A' Ward Circle I., Varanasi refusing the allegation made by the petitioner in the writ petition. The counter-affidavit disclosed that by the order dt. 22nd March, 1975 the ITO, after relying implicitly upon the information given to him by the authorised representative of the petitioner-company, had granted the following concessions : The counter-affidavit states that as the ITO did not doubt the correctness of the adjustments made by the petitioner-company, he allowed the same without questioning the correctness of the facts and figures contained in the statements submitted before him on behalf of the petitioner-company. While disclosing the reasons which led him to believe that the income had escaped assessment due to the failure of the petitioner-company to disclose truly and fully the particulars of the income- chargeable to tax, the ITO stated.--