DIVAN, J. -
(1.)THE petitioner herein has challenged the notice dated March 18, 1970, issued by the respondent herein under the provisions of sections 147 and 148 of the Income -tax Act, 1961. In order to appreciate the rival contentions it is necessary to set out certain facts.
(2.)THE relevant year for which the assessments are under consideration is assessment year 1961 -62. On March 22, 1962, a notice under section 22, sub -section (2), of the Indian Income -tax Act, 1922, was served upon the petitioner, by the Income -tax Officer concerned calling upon the petitioner to file his return of income for the assessment year 1961 -62, within the time mentioned in the said notice. However, in spite of the said notice, the petitioner, who is the assessee in question, did not file any return because according to him he had no income which could be subjected to Income -tax. Even though the petitioner did not file any return of income is demanded by the notice under section 22(2), no order on best judgment basis was passed by the Income -tax Officer under section 23(4) and no further action appears to have been taken in connection with that notice under section 22(2). On April 1, 1962, the Income -tax Act, 1961, came into force. On March 5, 1966, the Income -tax Officer issued a notice under section 148 of the Income -tax Act, 1961, calling upon the petitioner to file his return as in the notice under section 139(2) of the Act of 1961 and this was on the basis that income of the petitioner for the assessment year 1961 -62 had escaped assessment. This notice was served on the petitioner on March 15, 1966. Nothing appears to have been done for nearly two and a half years, but on November 27, 1968, the Income -tax Officer issued a notice under section 142, sub -section (1), of the At of 1961, calling for certain details from the petitioner regarding the assessment year 1961 -62. On this, it was contended on behalf of the petitioner in reply to the said notice that the notice under section 148, dated March 5, 1968, was bad as the earlier notice of March 22, 1962, issued under section 22(2) of the At of 1922 was still pending. In spite of this objection, however, on December 6, 1968, the Income -tax Officer passed an order assessing the income of the petitioner at Rs. 27,654 under section 144 on the best judgment assessment basis. Under section 146 of the Act of 1961, where an assessee has been assessed under section 144 on the best judgment assessment basis, he can make an application to the Income -tax Officer for the cancellation of the assessment and after the order of assessment dated December 6, 1968, the petitioner applied under section 146 paying that the assessment under section 144 should be cancelled. On February 11, 1969, the Income -tax Officer rejected the application under section 146. Thereafter, the petitioner filed two appeals to the Appellate Assistant Commissioner. One was under the order of assessment passed on December 6, 1968, and the other was against the order rejecting his application under section 146. On August 18, 1969, the Appellate Assistant Commissioner passed orders in each of these two appeals. The main order was passed in the appeal relating to the order under section 146 and similar order passed in the other appeal. The Appellate Assistant Commissioner set aside the order of assessment dated December 6, 1968, and he held that the assessment proceedings under the Act of 1922 commenced when either a voluntary return was filed by an assessee or an individual notice under section 22(2) of the 1922 Act was served by the Income -tax Officer whichever was earlier. The Appellate Assistant Commissioner further held that since in the instant case the notice under section 22(2) had been served, the assessment proceedings for the assessment year 1961 -62 were initiated by the Income -tax Officer by issuing the notice under section 22(2) on March 5, 1966, and he further held that in view of the decision of the Supreme Court in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax the assessment proceedings having been initiated, income could not be said to have escaped assessment unless a final order of assessment was passed in the pending proceedings. Since in the instant case the proceedings had been initiated by issue of notices under section 22(2) and the final order on such proceeding had not been passed by the time the Income -tax Officer initiated reassessment proceedings by the notice dated March 5, 1966, the Income -tax Officer had no jurisdiction to reopen the assessment under section 147(a) of the Act and, therefore, there was no legal duty on the petitioner to comply with the notice issued in excess of jurisdiction, and hence he allowed the appeal and set aside the order of the Income -tax Officer.
Against this order of the Appellate Assistant Commissioner, two appeals were filed by the revenue before the Income -tax Appellate Tribunal and those appeals were pending when the present special civil application was filed in this court on April 28, 1970. Those two appeals were decided by the Appellate Tribunal by orders dated April 19, 1971. Both the appeals were dismissed by the Appellate Tribunal and the finding of the Appellate Assistant Commissioner that the initiation of proceedings under sections 147 and 148 was bad in law was upheld and the Tribunal held that the assessment must be cancelled. As regards the appeal against the order of the Appellate Assistant Commissioner cancelling the Income -tax Officer's order under section 146, the Tribunal held that the orders of the Appellate Assistant Commissioner had become infructuous since the Tribunal had held in the main appeal that the proceedings initiated under section 147 were bad in law.
(3.)DURING the pendency of the appeals before the Appellated Tribunal, the Income -tax Officer issued a new show cause notice on January 20, 1970, calling upon the petitioner to show cause why a notice under section 148 should not be issued and ultimately he issued the notice on March 18, 1970, under section 148. Thereafter, on April 28, 1970, the present special civil application was filed challenging the notice which has been referred to as the notice dated March 20, 1970, because it appears that though the notice was actually issued on March 18, 1970, it was received by the petitioner on March 20, 1970.