BHADARMAL HAZARIMAL Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) BY this application under Article 226 of the Constitution of India the petitioner has challenged the notice under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the 1961 Act"), issued by the Income-tax Officer, " A " Ward, Jorhat, to the petitioner-firm. The petitioner submitted its return of income for the assessment year 1958-59, corresponding to the accounting year R. N. 2014, along with statements of accounts such as trading account, profit and loss account, balance-sheet, interest account, salary account, partners' account, accounts of various parties from whom goods were purchased and loans were taken or paid and those statements formed part of the said return. On the basis of the said return assessment proceedings for the assessment year 1958-59 were completed by the Income-tax Officer, Jorhat, under Section 23(5)(a) of the Indian Income-tax Act, 1922, on October 30, 1958. The Income-tax Officer estimated the income of the-petitioner-firm at Rs. 22,863. The partners of the firm paid tax separately on the share of income of the firm.

(2.) THE petitioner-firm thereafter received a letter No. B-312/58-59 dated July 12, 1968, from the respondent, Income-tax Officer, " A "-Ward, Jorhat, by which he asked the petitioner-firm to produce evidence on July 23, 1968, in respect of the loans obtained from the following parties relating to the assessment year 1958-59:

(3.) THE respondent has filed an affidavit-in-opposition wherein it has been asserted that the petitioner failed to disclosed fully and truly all material facts necessary for the purpose of assessment and that due to non-disclosure of all facts, income chargeable to tax for the assessment year in question had escaped assessment and, therefore, the Income-tax Officer had jurisdiction to issue the notice under Section 148 of the 1961 Act. It has been stated in the affidavit-in-opposition that the alleged loans from the four parties described hereinabove were from bogus name-lenders and were not genuine loans at all and that the petitioner introduced their secret profits in the names of those lenders.