KANTAMANI VENKATASATYAVATHI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This is an application filed under article 226 of the Constitution of India for the issue of a writ of prohibition directing the respondent to refrain from reassessing the income for the year 1956-57. It arises in the following circumstances

(2.) In his counter the Income-tax Officer gave all the relevant facts which, in substance, are not in dispute. He states that the petitioner started money-lending business in 1946. In 1947 she acquired shares worth Rs. 30,000 in Motu Industries, a private limited company, in which her husband was substantially interested. In 1950-51 the petitioner was assessed for the first time and the Income-tax Officer left a note that he had examined the accounts for the accounting year. As the income for the first two years was below the taxable minimum, no assessments were made. For the subsequent assessment years the petitioner was assessed only for money lending business. It is stated in the counter that year after year the assessee had filed along with the return of income a statement showing the particulars of amounts outstanding at the beginning of the year, fresh advances in the year, realisations during the year by way of principal and interest and the amount outstanding at the end of the year. The petitioner, however, did not file the trial balance or balance-sheet, not did she show the cash balance on the hand at the end of each year. It was contended that the capital investment of the assessee by 31st March, 1949, had swelled to Rs. 61,000. The lent capital went on increasing thereafter and reached the maximum of Rs. 2,31,482 by 31st March, 1962. It is from these date that year to years and the same was not commensurate with the income assessed for the various year. In the course of the assessment proceedings for the year 1958-59 the assessee was required to explain the accretions in the outstanding from Rs. 61,000 on 1st April, 1949, to Rs. 2,32,273 on 1st April, 1957, together with cash balance on the opening day of each of the accounting years. The petitioner, however, furnished particulars of lands owned by her and the agricultural income credited in her books of account during the accounting years 1954-55 to 1956-57, but she did not furnish such information for the earlier year, as she pleaded that the books are not available. According to the assessee she owned acs. 2.82 cents of land and gets substantial income out of it. Apart from that, it was contended that her sister who owns acs. 36.23 cents. of land has been giving the agricultural income to the assessee as she had no children of her own.

(3.) It is further stated in the counter that, since the assessee had been adopting a non-co-operative attitude, the respondent arrived at a cash balance of Rs. 21,983 on 31st March, 1956, in view of the particulars mentioned in the counter. It is, however, conceded in the counter that during the proceedings of the assessment for the year 1957-58 the records supplied by the petitioner showed a cash balance of Rs. 38,414 on 1st April, 1956.