RATTAN CHAND Vs. CENTRAL BOARD OF DIRECT TAXES

JUDGEMENT

(1.) THESE two writ petitions have been argued together because they relate to the same controversy and, indeed, have been referred to a larger Bench by P. D. Sharma J. by the same order dated 22nd March, 1965, on the ground that they involve determination of the vires of certain provisions of the Income-tax Act. I may, at the outset, point out that at the hearing before us, the learned counsel for the petitioner to our surprise did not raise any question relating to the vires of any provision of the Income-tax Act, which he wanted to be left open to be raised by him at a later stage, when the question of imposition of penalty may arise. I am not quite sure if this reference would have been made had this position been taken before the Single Bench.

(2.) THE facts giving rise to these writ petitions may here be briefly stated : Shri Rattan Chand Kapur, son of late Shri Gokal Chand, is stated to have separated from his father some time in 1927. In March, 1942, Rattan Chand created a trust called "Rattan trust". In 1946, a sum of Rs. 5 lakhs was ostensibly donated to the Trust by Shri Gokal Chand, the father of Shri Rattan Chand. In May, 1951, Shri Gokal Chand died. In June, 1947, this trust was assessed for the year 1947-48. Rattan Chand was also assessed as a Hindu undivided family for the year 1946-47. This assessment was made in September, 1946. On 25th March, 1963, a notice was issued to Shri Rattan Chand Kapur under section 148 of the Income-tax Act (43 of 1961) by the Income-tax Officer, Special Investigation Circle "A", Amritsar, stating that the said officer had reason to believe that Shri Rattan Chands income in respect of the assessment year 1946-47 had escaped assessment within the meaning of section 147 of the Income-tax Act and that the said Income-tax Officer proposed to assess the income for the said assessment year. Shri Rattan Chand Kapur was required to deliver to the Income-tax Officer, within thirty days from the date of the service of the notice, return in the prescribed form of the income chargeable in respect of which he was assessable for the financial year in question. This notice, it is asserted therein, was being issued after obtaining the necessary sanction of the Central Board of Revenue. It is this notice which is the subject-matter of challenge in the present proceedings and the principle, may the main ground of challenge is that the time prescribed by law for reopening the assessment for the year 1946-47 had expired long ago; according to the petitioners learned counsel, it expired on 31st March, 1955, and under the current Income-tax Act, there was no jurisdiction in the department to issue the impugned notice.

(3.) IN view of the legal position which I have just stated, I may deal with the petitioners submission, because, according to Shri Sastri, there are special circumstances in this case which justify interference by this court.