INCOME TAX OFFICER H WARD Vs. ANANDILAL GOENKA

JUDGEMENT

(1.) There are some extraordinary features in this case. Indian Press Exchange Limited is one of the Birla Group of companies. Sri A. L. Goenka was an influential officer of this group and at one point of time was the chief executive of the Indian Press Exchange Limited. The company paid large sums to the two minor sons of Sri A.L. Goenka allegedly by way of commission. The company in its assessment claimed the payment as expenditure wholly and exclusively laid out for business. The ITO assessing the company disallowed the expenditure on the ground that the payments were made for extra-commercial considerations. The finding of the ITO was ultimately sustained by the Tribunal. On a reference, the High Court declined to interfere with the finding of the Tribunal.

(2.) The income-tax assessment of Sri A. L. Goenka for the assessment year 1969-70 was completed on February 7, 1970, on a total income of Rs. 71,395. A notice was issued on March 28, 1974, under Section 148 of the I.T. Act seeking to reopen the assessment of Sri A. L. Goenka for the assessment year 1969-70 on the basis of the information received from the ITO who had passed the assessment orders in the case of Indian Press Exchange Limited. The jurisdiction to issue that notice was challenged in this court. The allegation was that the payments that were shown by the company to have been made to the two minor sons of Sri A. L. Goenka by way of commission were really payments to Sri A. L. Goenka.

(3.) The assessee filed a writ petition in this court and contended that there was no material for entertaining the belief that the income that was received by the two minor sons was really the benami income of Sri A. L. Goenka. Mukherji J. upheld the contention of the assessee and quashed the notice under Section 148.