KISTOOR MALL Vs. C P SINGH ITO

JUDGEMENT

(1.) KISTOORMALL & Gyanmal, sons of Kanmal Nahta, filed the present writ petition under Arts. 226 and 227 of the Constitution of India on 17th March, 1967, against the ITO, Central Circle-I, Jaipur, CIT, Delhi and Rajasthan, at New Delhi, and the Union of India, respondents Nos. 1, 2 and 3, respectively, for bringing up and quashing the notices, Exhibit H-I to H-5, dt. 21st March, 1963, issued to their father, Kanmal Nahta, deceased, by the ITO, Special Investigation Circle-A, Jaipur (hereafter called "the Jaipur ITO"), under S. 148 of the IT Act, 1961 (hereafter called "the new Act") for the asst. yrs. 1946-47 to 1950-51, and for an injunction restraining the respondents from taking any proceedings against the petitioners on the basis of the said notices.

(2.) A few facts, which are material for the decision of this petition, may be recapitulated here. Kanmal Nahta, who died on 26th June, 1964, was an assessee within the jurisdiction of 3rd ITO, C-III Ward, Bombay, till the asst. yr. 1950-51. It appears he closed his business at Bombay and shifted his residence to Jodhpur some time in the year 1949. He was being assessed by the ITO, D-Ward, Jodhpur (hereafter called the "Jodhpur ITO"), till the asst. yr. 1957-58. In 1957, an Addl. ITO was posted to D-Ward, Jodhpur. Kanmal Nahta fell in the category of assessees who were transferred to the jurisdiction of the Addl. ITO, D-Ward, Jodhpur (hereafter called the "Jodhpur Addl. ITO"), w.e.f. the asst. yr. 1958-59. Thus, Kanmal Nahta was being assessed by the Jodhpur Addl. ITO till 1962. On 9th Jan., 1962, the Jodhpur Addl. ITO sent the file of this assessee to the Jodhpur ITO, on the ground that the assessee was likely to attract the wealth-tax liability and that, therefore, his assessment should be dealt with by the latter as all cases attracting wealth-tax liability were being dealt with by him. On 10th Jan., 1962, the Jodhpur ITO sent a detailed letter to Kanmal Nahta, stating that he had concealed his income chargeable to tax from 1940-41 to 1949-50, and requiring him to explain why action under S. 34(1)(a) of the Indian IT Act, 1922 (hereinafter called the "old Act"), be not taken against him. On 26th March, 1962, the Jodhpur ITO issued notices to Kanmal Nahta under S. 34 of the old Act in respect of the asst. yrs. 1940-41 to 1949- 50. According to the petitioner, Gyanmal, these notices were served (see in this connection his application dt. 23rd April, 1981, affidavit of even date and copy of lawyer's reply to these notices) on Kanmal Nahta on 29th March, 1962. Two days after the service of the notices on Kanmal Nahta, the new Act came into force on 1st April, 1962. In exercise of his powers under sub-s. (1) of S. 127 of the new Act, the CIT, Delhi and Rajasthan, passed an order, dt. 26th June, 1962, transferring the cases arising out of the said notices from the Jodhpur ITO to the Jaipur ITO. On 3rd Nov., 1962, Kanmal Nahta filed returns of income under protest for the asst. yrs. 1946-47 to 1949-50, before the Jaipur ITO. The returns were filed with a covering letter of objection stating that the Jodhpur ITO "had no authority or jurisdiction to act in relation to the assessee's ease and the notice issued by him was void ab initio." The Jaipur ITO disposed of these cases on 19th Jan., 1963, and communicated his decision to Kanmal Nahta, vide letter, Exhibit-C, which reads as under : I am glad to inform you that the proceedings under S. 34 of the IT Act, 1922, initiated against you for the years 1940-41 to 1949-50 are being hereby dropped.

(3.) THE respondents contested the writ petition and filed a return with supporting-affidavit in answer to it. THEy pleaded that since Kanmal Nahta had closed his business at Bombay on 17th Oct., 1949, and thereafter taken up residence at Jodhpur and had been filing returns at Jodhpur since the asst. yr. 1951-52, the Jodhpur ITO had acquired jurisdiction in the matter to issue notice under S. 34 of the old Act in respect of the assessment years prior to the year 1951-52. THEy further pleaded that Kanmal Nahta filed returns of his income for the asst. yrs. 1946-47 to 1950- 51, before the Jaipur ITO in pursuance of the notices, Exhibit H-1 to Exhibit H-5, without raising any objection to his jurisdiction within a period of one month from the date of filing the returns, and, therefore, he or his heirs cannot call in question the jurisdiction of the Jodhpur ITO, or, for that matter, of the Jaipur ITO, to issue notice under S. 34 of the old Act or S. 148 of the new Act.