DEV SON P LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner herein as alleged is a company registered under the Companies Act, 1956, dealing in the wholesale business of Indian made Foreign Liquor (IMFL) and Beer having its registered office at Jammu. The company holds a valid licence for the business as stated - an assessee under the income tax Act, 1961 ('the Act') with its registered office at Jammu.

(2.) As projected in writ petition the petitioner is aggrieved against the issuance of notice purporting to be u/s 148 of the Act issued by respondent No. 3, ITO on 8-1-1985, and replied to by the petitioner on 5-2-1986, which pertained to the assessment year 1973-74. The petitioner also submitted returns under protest. The respondent No. 3 thereupon issued a letter dated 10-3-1986, to the petitioner indicating the approval of the Board showing recording of reasons for the reopening of the assessment and asking the petitioner to attend his office on 21-3-1986, the date on which the assessment proceedings may be taken. The said communication is marked as Annexure P-7 attached with the petition. Annexure P-7(1) is the form and Annexure P-7(2) is another order of the ITO indicating recording of reasons for issuance of notice u/s 149 of the Act accompanied by a notice issued on 10-3-1986 for appearance and attending of the case on 21-3-1986. The petitioner, therefore, challenges the constitutionality, legality and correctness of the notice issued on 10-3-1986 (Annexure P-8), letter of respondent No. 3 (Annexure P-7) and the reasons recorded therein and the so-called satisfaction allegedly communicated on behalf of respondent No. 2 in this writ petition under the Constitution.

(3.) The dispute is mainly concerned with the amount of sales tax including Rs. 96,448 reflected in the balance-sheets when the petitioner filed the returns of the assessment year 1973-74. It was alleged that this amount was received by the petitioner from his manufacturer and supplier Dewan Modern Breweries Ltd., on account of the sales tax charged from the petitioner. The then ITO on the said return and accounts assessed the petitioner's income at Rs. 10,090; petitioner was then called upon for rectification of the mistake by notice issued by ITO on 1-3-1976, u/s 154/155 of the Act pertaining to the said amount and, on submission of explanation by the petitioner, the ITO, on satisfaction dropped the item of sales tax in respect of which the impugned notice has now been issued.