BAKSHISH SINGH Vs. INCOME TAX OFFICER B WARD

JUDGEMENT

(1.) This is an application under Article 226 of the Constitution for, inter alia, the issue of a writ in the nature of mandamus directing the respondents to cancel or to rescind the said notice dated January 25, 1972, issued under Section 148 of the Income-tax Act, 1961, and the purported letter dated August 17, 1971, for the assessment year 1958-59.

(2.) The petitioner derived his income from salary and also from money-lending business. For the assessment year 1959-60, the respondent No. 1 assessed the income of the petitioner at Rs. 4,000 from salary and Rs. 25,000 from other sources. This the respondent No. 1 did because a sum of Rs. 25,000 was appearing in the books of the assessee for that year as the opening balance. In the ultimate appeal before the Income-tax Appellate Tribunal the Appellate Tribunal set aside the addition of Rs. 25,000 in the income of the petitioner for the assessment year and allowed the appeal of the petitioner. The Appellate Tribunal found that the assessee derived income from salary and observed that the said amount of Rs. 25,000 could not be earned nor constitute the petitioner's income from any known sources in that assessment year as the amount could not have been earned by the assessee on the first day of the accounting year. The Appellate Tribunal observed : "It must be taken to have been earned by him in the earlier year or years." Thereafter, the present Income-tax Officer, "B" Ward, District VI, Calcutta, wrote the aforesaid letter dated August 17, 1971, asking the petitioner to show cause on August 28, 1971, as to why proceedings under Section 147(a) should not be initiated against the petitioner for the assessment year 1958-59. By a letter dated August 28, 1971, the petitioner showed cause as asked for. Thereafter, the petitioner received the said impugned notice dated January 25, 1972, under Section 148 of the Income-tax Act, 1961, issued by the respondent No. 1 proposing to assess the income of the petitioner for the said assessment year 1958-59, on the ground that he had reason to believe that the income of the petitioner in that year had escaped assessment.

(3.) Mr. Sanjoy Bhattacharya, appearing for the petitioner, contended that --(1) the law as it stood at the material time, that is, 1958-59, ought to be applied in the instant case and the case of the petitioner should be governed not by Section 150 of the Act of 1961, but by the second proviso to Subsection (3) to Section 34 of the Indian Income-tax Act of 1922. Even if Section 150 was at all attracted, the said Section is subject to Section 151 of the Act of 1961 and the conditions precedent for issuing a notice under Section 148 as envisaged in Section 151 of the Act of 1961, were not fulfilled and as such the respondent No. 1 had no jurisdiction to issue the said notice.