SHIVRAM PODDAR Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is an appeal against an order of Sinha J. dt. the 27th April, 1959, dismissing a writ application for quashing a notice issued under s. 34 of the Indian IT Act.

(2.) A firm of the name of Balmukund Radheshyam carried on business as commission agents in cotton, sale and purchase of cotton and cotton piece goods and speculation in cotton and silver at Ratlam and Indore, since 22nd Dec., 1947, until it was dissolved on the 24th Feb., 1950. On 20th Aug., 1952, one of the ex-partners of the said firm filed a return of the income of the said firm before the ITO, Special Survey Circle III, Calcutta, showing a sum of Rs. 18,737-5-9 as net profits for the accounting period of the firm's first year of business, that is for the asst. yr. 1949-50. An order of the assessment was made on the 28th Oct., 1952, and the sum assessed to income-tax was duly paid. It is alleged that sometime in March, 1953, the notice of dissolution of the said firm was duly given to the ITO, Special Survey Circle III, Calcutta, though this fact is denied on behalf of the IT Department. By an order dt. the 3rd Aug., 1955, the Central Board of Revenue, in exercise of its powers under sub-s. (7A) of s. 5 of the Indian IT Act, transferred the income-tax cases of the said firm pending in the office of the Second ITO, Bombay to the ITO, Central Circle II, Calcutta. By a letter dt. the 29th Sept., 1955, the then ITO, Central Circle II, Calcutta, informed the said firm at 357, Kalbadevi Road, Bombay, that the case of the said firm has been assigned by the Central Board of Revenue to him. By a letter dt. the 13th Oct., 1955, the ITO, Central Circle II, Calcutta, called upon the ex-partners of the said firm to produce the books of the firm for the year 2004-05 and particularly all documents of speculation in cotton and silver on 10th Nov., 1955. On 22nd Oct., 1955, the said ITO issued a notice a notice under s. 34 addressed to Shivram Poddar (partner) for and on behalf of M/s Balmukund Radheshyam, 138, Cross Street, Calcutta. In this notice it was, inter alia, stated as follows : I have reason to believe that your income assessable to income- tax for the year ending 31st March, 1950, has been under- assessed.

(3.) ON the 17th April, 1958, the appellant addressed a letter to the ITO challenging, inter alia, the jurisdiction of the ITO and the validity of the said notice issued under s. 34 and also asking for certain particulars specified therein. By a letter dt. the 23rd July, 1958, the ITO insisted on compliance with the notice issued under s. 34 and called upon the appellant to file a return by 7th Aug., 1958. By a letter dt. the 6th Aug., 1958, the petitioner again protested against the validity of the notice and proceedings and thereafter moved this Court under Art. 226 of the Constitution and a rule nisi was issued on the 18th Sept., 1958. This rule came up for hearing before Sinha J. and was discharged by a judgment and order dt. the 27th April, 1959. It is against this order that the present appeal has been preferred.