SETH KIRORIMAL ADWANI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) CIVIL Rule No. 194/66 arises out of a writ petition under article 226 of the Constitution, whereby the petitioner has prayed that the respondents should be asked to cancel, recall or otherwise forbear from giving effect to the impugned notice dated the 14th March, 1966, issued by the respondent No. 1, Income-tax Officer, "E" Ward, Gauhati, and/or why a writ in the natute of certiorari or a writ of like nature should not be issued and the impugned notice dated the 14th March, 1966, should not be set aside and quashed.

(2.) THE petitioner made another prayer that the respondents should show cause why Section 297(2)(d)(ii) of the Income-tax Act of 1961 (hereinafter called "the Act") should not be declared and adjudged as null and void. This part of the prayer has been given up at the time of arguing the case and so we need not embark upon any discussion on this matter.

(3.) IT will be necessary to note that the Income-tax Officer duly deducted the interest which was paid by the petitioner as per his order dated the 20th March, 1959, and the petitioner's contention is that these related to the borrowings which were taken from the persons, who ordinarily issue hundies in Calcutta and Bombay. From annexure "B" to the affidavit-in-opposition filed on behalf of the respondent, it will be found that in the course of the proceedings for the assessment year 1964-65, a scrutiny was made regarding the large number of cash credits introduced in the names of "hundi" dealers of Calcutta and Bombay and it was found that there are cash credits during the accounting year 1957-58 of more than Rs. 75,000 in the names of a number of bogus hundi dealers. In such circumstances, he took the permission of the Commissioner of Income-tax to issue notice under Section 147(a) of the Act and it will appear from annexure "C" to the afidavit-in-opposition that such permission was granted.