YAMUNA SYNDICATE LTD Vs. SURTAX OFFICER COMPANIES WARD

JUDGEMENT

(1.) THIS order will dispose of three Civil Writ Petitions, Nos. 387 (Yamuna Syndicate Ltd. v. Surtax Officer], 819 of 1976 Yamuna Syndicate Ltd. v. Surtax Officer] and 821 of 1976 Yamuna Syndicate Ltd. v. Surtax Officer] wherein a common question is involved.

(2.) THE petitioner in all the three writ petitions is a limited company liable to assessment under the Companies (Profits) Surtax Act, 1964 (hereinafter "the Act" ). The petitioner filed returns for the assessment years 1971-72, 1972-73 and 1973-74, within the prescribed period. The said returns were accompanied by annexures relating to the details of reserves, moneys borrowed and other funds and reserves and calculation of income-tax deductible under Schedule 1, Rule 2 of the Act. The ITO passed the order of assessment for the year 1971-72 on November 12, 1971, for the assessment year 1972-73 on October 12, 1972, and for the assessment year 1973-74 on February 1, 1974. On December 6, 4975, the ITO issued three notices under Section 8 (b) of the Act for the assessment years 1971-72, 1972-73 and 1973-74, proposing to reassess the income of the petitioner for these assessment years, as he had reason to believe that the petitioner's chargeable profit chargeable to tax had escaped assessment within the meaning of Section 147 of the I. T. Act, 1961. The petitioners have challenged these notices at P-8, P-9 and P-10, in the three writ petitions detailed above, respectively.

(3.) SECTION 8 of the Act deals with the profits escaping assessment and it reads: " 8. Profits escaping assessment.--If (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to make a return under Section 5 for any assessment year or to disclose fully and truly all material facts necessary for his assessment for any assessment year, chargeable profits for that year have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the, subject of excessive relief under this Act; or (b) notwithstanding that there has been no omission or failure as mentioned in Clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that chargeable profits assessable for any assessment year have escaped assessment or have been under-assessed or assessed at too low a rate or have been the subject of excessive relief under this Act, he may, in cases falling under Clause (a) at any time, and in cases falling under Clause (b) at any time within four years of the end of that assessment year, serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Section 5, and may proceed to assess or reassess the amount chargeable to surtax, and the provisions of this Act shall, so far as may be, apply as if the notice were a notice issued under that section. "