LAXMINARAYAN R RATHI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is an application under Arts. 226 and 227 of the Constitution of India. All the contentions raised in the petition have not been pressed before us, and it is, therefore, not necessary to refer to all the allegations made in the petition.

(2.) THE facts which are material to the contentions raised and which have been stated before us by counsel for the petitioner in brief are :

(3.) MR . Joshi, appearing for the ITO, the respondent hereto, contends that the cases of the petitioner were transferred to the respondent, and similarly, cases of one Kisanlal Badrilal also had been transferred to the respondent. The said Kisanlal is the father -in -law of Laxminarayan Rathi, the Karta of the petitioner family. Kisanlal Badrilal owned business. It was noticed in the assessment proceedings of Kisanlal that his balance -sheet showed a capital of Rs. 10 lakhs and odd, though the sources of the family, of which Kisanlal was the Karta, were meagre. This large capital was used for making advances to various firms in which Laxminarayan Rathi was a partner. The said large advancs made to Laxminarayan Rathi were practically without interest. Further investigation in the matter led the respondent to believe that the capital alleged to belong to Kisanlal really belonged to the petitioner family. The respondent having reason to believe that this large capital which belonged to the petitioner represented his income from undisclosed sources, action under S. 34 was initiated after obtaining the necessary satisfaction of the Board of Revenue. According to Mr. Joshi, the notices issued fall under S. 34(1)(a), and that is the apposite provision of law applicable to the case. Under the said S. 34(1)(a), it is open to the respondent to issue notice at any time, and, therefore, it was within his jurisdiction and competence to issue these notices; the notices are not bad in law, and are not liable to be quashed.