SHYAM SUNDAR GOVINDRAM Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) BY this petition under Art. 226 of the Constitution, the petitioner challenges the validity of the notice dt. 14th March, 1962, issued by the IT authorities under s. 34(1)(a) of the Indian IT Act, 1922, and prays for a writ of certiorari to quash the notice and for a writ of prohibition to restrain the respondents from taking any proceedings pursuant to that notice.

(2.) THE assessee was a partnership firm which carried on business in the Sarguja State. THE firm was dissolved on 25th July, 1947. It was assessed for the asst. yr. 1946-47 on 30th Dec., 1947 (Annexure "B"). On 26th March, 1952, a notice was issued to the assessee under s. 34(1)(a) of the IT Act for reassessment of escaped income as it was discovered that the firm had made a declaration of high denomination notes to the extent of Rs. 4,75,000 on 23rd Jan., 1946. THE income was ultimately assessed to income-tax. THE assessee went up in appeal before the Asstt. CIT who held that the income could not be assessed in the year 1947-48 but was liable to assessment for the year 1946-47 (Annexure "F"). THE matter was taken up to the Tribunal but the order of the Asstt. CIT was maintained (Annexure "M"). THE Tribunal had made a reference under s. 66(1) of the IT Act to this High Court posing the question whether the proceedings started on the notice dt. 26th March, 1952, were valid and the answer given was that they were validly initiated (Annexure "U"). While the petition before the Tribunal was pending, a notice was issued on 14th March, 1962, to the petitioner under s. 34(1)(a) of the IT Act in accordance with the direction of the Asstt. CIT for reassessing the escaped income for the year 1946-47. It is this notice and the subsequent proceeding which are sought to be quashed by this petition.

(3.) WE shall consider these contentions seriatim. Point No. 1.--On behalf of the respondents, Shri M. Adhikari urged that all the amendments made to the IT Act apply to Sarguja State by virtue of the Darbar order and, therefore, the limitation for the notice would be governed by subsequent amendments. Sub-s. (4) had been added to s. 34 by an amendment in 1959 which has the effect of taking away the bar of limitation completely in respect of concealed and undisclosed incomes escaping assessment. Accordingly, it is contended, the notice and the subsequent proceedings are valid.