SUKHDEO CHARITY ESTATE Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner by this writ petition has prayed that the notice under Section 148 of the Income-tax Act, 1961, issued on February 17, 1981, may be quashed and the respondent may further be restrained from taking any proceedings in pursuance of the said notice.

(2.) THE petitioner is a public religious trust constituted under a registered trust deed dated May 21, 1953. This trust is also registered under Section 12A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), with the Commissioner of Income-tax. THE petitioner-trust applies its funds for public and religious purposes in India and it maintains and runs hospitals, temples, etc. THE petitioner-trust has its head office at Ladnu, district Nagaur, and a branch at Calcutta. THE trust maintains regular books of account both for its head office and the branch office. Ladnu is a small town in the district of Nagaur in Rajasthan and it had no public water supply scheme. In 1961, a public water supply scheme was mooted for the town of Ladnu by the Government of Rajasthan. It was estimated to cost about Rs. 10 lakhs. THE State Government agreed to provide, water to the town if the public contributed about Rs. 3 lakhs and the balance amount was to be borne by the State Government. THE petitioner-trust was interested in the scheme as it would provide water facilities to the town situated in a desert area which was one of the several charitable objects for which the trust was, established. THE petitioner-trust opened a water supply scheme account in its books at Ladnu. It transferred a sum of Rs. 33,138 to this account out of its funds. Similarly, in the year 1963-64, it transferred a sum of Rs. 86,449.79 to the above account out of its own income making a total of Rs. 1,19,587 at the close of the accounting year and as opening balance in Samvat year 2020. Simultaneously, the petitioner-trust invited generous contributions from the public amongst others. It addressed a letter to Benjamine and Rehma Elias Memorial Trust at Calcutta (referred to hereinafter as "the Calcutta trust") to make a substantial contribution to the water supply scheme. THE Calcutta trust contributed a sum of Rs. 70,000 towards the water supply scheme. It issued a cheque for a sum of Rs. 70,000 dated March 31, 1964, in favour of the petitioner-trust drawn on the Hongkong and Shanghai Banking Corporation. This cheque was handed over to the Branch Office at Calcutta and the petitioner-trust credited it in the water supply scheme account in the Calcutta branch. THE Calcutta branch issued a cheque for Rs. 1,85,000 in favour of the Executive Engineer, Government of Rajasthan. Corresponding entries were passed in the books at the head office at Ladnu. THE petitioner-trust used to regularly file its return"of income each year with the Income-tax Officer, Nagaur. For the accounting period April 3, 1963, to April 19, 1964, the relevant assessment year being 1964-65, the petitioner filed its return of income with the Income-tax Officer/Nagaur. Along with the return, the petitioner-trust filed copies of the income and expenditure accounts and balance-sheets of both the head office and the branch office at Calcutta. THE Income-tax Officer was not satisfied and, in order to verify the correctness and completeness of the return, he issued a notice under Section 143(2) of the Act. THE accountant of the trust and its counsel attended and produced the books of account of the Ladnu and Calcutta offices and all relevant vouchers and correspondence before him. It is also submitted before him that the donation of a sum of Rs. 70,000 made by the Calcutta trust is not the income of the petitioner-trust. THE Income-tax Officer, after scrutiny of the record, adjourned the matter and, when the case was taken up again, the Income-tax Officer, after detailed examination of the donation of Rs. 70,000 from Calcutta trust, came to the conclusion that it could not be treated as income of the petitioner-trust. THE Income-tax Officer passed the assessment order accordingly on March 24, 1969. THEreafter, on October 21, 1980, the Commissioner of Income-tax, Jodhpur, vide his letter dated October 21, 1980, informed the petitioner that the Income-tax Officer, Nagaur, has reported that the trust had received voluntary contribution of Rs. 70,000 from another trust of Calcutta, namely, Benjamine and Rehma Elias Memorial Trust, on March 31, 1964, which the petitioner failed to disclose in the total income. It is further alleged that the Income-tax Officer had reason to believe that, by reason of the failure to disclose truly and fully the above material fact, income chargeable to tax has escaped assessment for the year 1964-65. THE petitioner filed a reply to the above notice. THEreafter, the Income-tax Officer issued a notice on February 17, 1981, under Section 148 of the Act for the assessment year 1964-65 intimating the petitioner that income chargeable to tax has escaped assessment within the meaning of Section 147 of the Act and calling upon the petitioner to file a fresh return. THE petitioner filed objections on March 16, 1981, stating that there was no omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment. All the material facts had been disclosed and noted by the Income-tax officer and are on the record. THEreafter, the Income-tax Officer passed the assessment order. THErefore, the petitioner has challenged this notice issued under Section 148 of the Act by filing the present writ petition.

(3.) NOW, the same principle is applicable in the present case also. But the difference is that it is for the year 1964-65 and the aforesaid case was for the year 1965-66. Therefore, the same principle which has been laid down in the aforesaid case is equally applicable in the present case. Instead of going into detailed facts, suffice it to say that the ratio laid down in the above-mentioned case is squarely applicable in the present case also. More so because, the above case is between the same parties and it is also in respect of the same scheme.