AZAM JAH HIS HIGHNESS PRINCE Vs. ETO

JUDGEMENT

(1.) THESE three with petitions involve the interpretation of S. 4(ii) of the Expenditure-tax Act, 1957 (29 of 1957), as amended by the Finance Act of 1959, hereinafter called the Act, and its validity, namely, whether it offends Arts. 14, 19 and 31 of the Constitution. Apart from this, the jurisdiction of the Expenditure-tax Officer to reopen the assessments already made has been questioned.

(2.) IN order to understand the points urged before me, it is necessary to state briefly a few facts : The petitioner, His Highness Prince Azam Jah, the eldest son of Nizam, filed expenditure-tax returns under the Act for the asst. yrs. 1959-60, 1960-61 and 1961-62 and on the basis of the returns, the respondent--Expenditure-tax Officer, Circle No. II --completed the tax assessments on March 27, 1961, December 22, 1961 and January 25, 1962, assessing him to a taxable expenditure of Rs. 2,34,864, Rs. 1,66,687, and Rs. 2,30,384 respectively for these three years. The tax demands were also paid in full. Thereafter, the respondent issued notice dated, May 5, 1962, under S. 16 of the Act, calling upon the petitioner to file supplemental returns of expenditure for the three years in question on the alleged ground that the respondent had reason to believe that the petitioner's expenditure had escaped assessment or had been under assessed. But, since the petitioner was not aware of the reasons which actuated the respondent to reopen the assessments, he filed supplemental returns of expenditure on July 16, 1962, declaring the same expenditure as shown in the original returns and subsequently a date of hearing was fixed on July 20, 1962, at which hearing the petitioner's representative was informed by the respondent that the three assessments had been reopened for the purpose of including in the petitioner's assessment, the expenditure incurred by his wife, Princess Durre Shehvar, as required by S. 4(ii) of the Act, as amended by S. 24 of the Finance Act, 1959. A letter was also written by the respondent to the petitioner on July 20, 1962, calling upon him to state his objections by July 25, 1962, for the inclusion in his assessments of his wife's expenditure in the previous year relevant for the three years mentioned above and stating that exemptions and deductions if permissible under ss. 5 and 6 of the Act, will however be allowed. It is these proceedings that the petitioner challenges and, inter alia, contends :

(3.) THE first contention urged by the learned counsel for the petitioner concerns the jurisdiction of the Expenditure-tax Officer to reopen the assessments under S. 16 of the Act, which is more or less in similar terms with S. 34 of the now repealed IT Act, 1922, and is in the following terms :