SARDAR INDER SINGH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS petition under Article 226 of the Constitution is directed against proceedings for reassessment under Section 147 of the Income-tax Act, 1961 (hereafter referred to as the Act or the 1961 Act), The assessee is a Hindu undivided family. It was assessed under the name and style " Punjab Khalsa Hindu Hotel" for the assessment year 1948-49. At that time Sardar Sunder Singh was the manager of the Hindu undivided family. When the Income-tax Officer, Varanasi, took up proceedings for assessment of the Hindu undivided family for the year 1958-59, he thought that income to the extent of Rs. 80,000 received by the family in the year 1947 had escaped assessment. So, on March 26, 1965, he issued to the assessee a notice under Section 147/148 of the Act proposing reassessment. Sardar Inder Singh, representing the Hindu undivided family has filed this writ petition challenging the notice under Section 148, dated March 26, 1965. Annexure F to the writ petition is a copy of the impugned notice.

(2.) THE main contention of Mr. P. N. Pachauri appearing for the petitioner is that reassessment proceedings were barred by time under the Indian Income-tax Act, 1922 (hereafter referred to as the old Act or the 1922 Act). Consequently, reassessment proceedings cannot be initiated under the 1961 Act. This position has been disputed by Mr. Gopal Behari appearing for the respondents. Firstly, he contended that reassessment proceedings were not barred under the 1922 Act. Secondly, even if they were barred under the 1922 Act, that does not prevent the respondents from initiating reassessment proceedings under the 1961 Act.

(3.) SECTION 34 of the 1922 Act dealt with income escaping assessment. Sub-section (1) of SECTION 34 of the 1922 Act ran thus :