GOVINDA CHOUDHURY AND SONS Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is an application under Article 226 of the constitution for a writ of certiorari to quash the notices issued under Section 148 of the Income-tax Act of 1961 (hereafter referred to as "the Act") in respect of the five assessment years being 1965-66 to 1969-70.

(2.) THE assessee-petitioner is a firm constituted under the Indian Partnership Act of 1932. For the assessment years 1954-55 and 1955-56, the firm was accorded registration under the Indian Income-tax Act of 1922, but thereafter registration was refused. Certain sister concerns of the assessee-firm were treated not to be genuine and the assessee-firm itself got entangled in various proceedings of assessment, penalty, et cetera. THEreupon, with a view to bringing about a settlement, the assessee approached the Director of Inspection (Investigation) of the Central Board of Direct taxes. According to the assessee, its application was examined at great length with reference to the books of account with particular emphasis on the contract business, as a flat rate on percentage basis of the gross receipts was sought to be adopted for determining the assessable income and ultimately on 28th of August, 1970, the terms of settlement ,were communicated to the petitioner. In regard to the contract business, it was stipulated that ten per cent. of the gross receipts would represent the assessable income. On the basis of the terms of settlement, assessments for the five years in question were completed as per the particulars provided below :

(3.) IN Calcutta Discount Co.'s case [1961] 41 ITR 191, 200, 201 (SC), Das Gupta J., speaking for the majority, observed: