KEDARNATH GOENKA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner in this writ application has questioned the authority of the respondent-ITO to issue the notice dated January 8, 1974, under Section 148 of the I.T. Act, 1961 (hereinafter referred to as " the Act") asking the petitioner to file a return of his income in respect of the assessment year 1963-64, because he had reasons to believe that income chargeable to tax has escaped assessment for that year. A copy of that notice is annex. 2 to the writ application. According to the petitioner, the said notice has been issued without jurisdiction and amounts to an arbitrary exercise of statutory power by the respondent-ITO.

(2.) THE case of the petitioner is that he is the karta of a HUF which carries on business at Monghyr under the name and style of M/s. Magniram Baijnath, For the assessment year 1963-64, his total income was assessed on July 19, 1965, at Rs. 11,074. A true copy of that assessment order is annex. 1 to the writ application. It has been asserted that in the course of assessment proceedings for that year the petitioner had disclosed fully and truly all material facts necessary for the assessment. In spite of that the impugned notice dated January 8, 1974, has been issued directing the petitioner to submit a return for that very assessment year 1963-64. Having received the notice, the petitioner requested for a copy of the reasons which had formed the basis for the proceeding. In reply to that, on March 30, 1974, the petitioner received from the respondent-ITO a letter, enclosing therewith a statement containing the reasons for initiating the proceedings in question. A copy of the said letter along with the enclosed statement containing the reasons for the belief about the escaped assessment, has been marked as annex. 4 to the writ application. According to the petitioner, the respondent-ITO, on the materials aforesaid, could not have reasons to believe that income chargeable to tax has escaped assessment in the year in question. According to the petitioner, all the material facts having been fully and truly disclosed before the passing of the assessment order, in the year 1965, the respondent-ITO cannot reopen the assessment in the purported exercise of the powers conferred upon him by Section 147 of the Act.

(3.) IT was, however, pointed out I