HIDAYATULLAH, C.J. - (1.) THE majority Judgment of the court was delivered by -
(2.) THIS judgment shall dispose of Civil Appeals 564-571 of 1968. Of these, four are against the common judgment and order of a division bench of the Calcutta High court, 10/12/1963, dismissing 4 appeals (139-142 of 1959) from the order of a learned single Judge, 23/04/1959 in Writ Petitions 159-162 of 1958. The remaining four appeals are against the order, 24/11/1964, refusing to certify the case as fit for appeal to this court under Article 133(1) of the Constitution. The facts are as follows : One Dalchand Singhi held a prospecting licence in the erstwhile Korea State (now in Madhys Pradesh). His son Bahadur Singh Singhi took a mining lease and started a colliery known as Jhagrakhand Colliery. In 1942 a private limited Company called the Jhagrakhand Collieries Ltd. was started with an authorised capital of Rs. 24 lakhs (2,400 shares of Rs. 1,000.00 each). Bahadur Singh divided equally the 2,400 shares between himself and his 3 sons Rajendra Singh Singhi, Narendra Singh Singhi and Birendra Singh Singhi. In 1943 the colliery business and its assets were transferred by the joint family to the Company. In 1944 the father and his 3 sons separated and partitioned the property. Babadur Singh Singhi died on 7/07/1944 leaving a will-Letters of Administration with the will annexed were granted in 1945. The register of Jhagrakhand Collieries Ltd. was rectified and showed thereafter 900 shares in the name of Narendra Singh Singhi and Rajendra Singh Singhi and 600 shares in the 407 name of Rajendra Singh Singhi. Birendra Singh Singhi died on 12/12/1950 leaving a widow Smt. Champa Kumari and two minor sons, Ashok Kumar Singhi, Chandra Kumar Singhi and also a minor daughter. These minors have now attained majority. Under what is known as the 'Tyagi Scheme' announced on 19/05/1951 a voluntary disclosure was made by the Jhagralkhand Collieries Ltd. and the shareholders. The time-limit for such disclosure was 31/08/1951. Before this the Income-tax Officer had filed a complaint for certain offences and under a search warrant seized the books of account of the company from 1945 to 1950. This was on 3/07/1951. The shareholders and the company then disclosed on 31/07/1951 a concealed income of Rs. 42,52,501.00 during the years 1945 to 1948.
(3.) ON 28/11/1951 the Commissioner of Income-tax offered to withdraw prosecutions if the company and the shareholders agreed to pay taxes due on a total income of Rs. 90,00,000.00 to be distributed over the years 1945-1950 (both inclusive) together with a penalty of 20% and interest at 3% p. a. on unpaid tax. There were certain other conditions with which we need not concern ourselves. Certain representations followed and finally on 26/12/1951 it was agreed that the parties jointly and severally pay Rs. 67,48,841/11. It was also agreed that a sum of Rs. 55,99,832/6 would be accepted in full satisfaction upon the parties paying the amount in the following instalments: JUDGEMENT_404_1_1970Html1.htm ON the failure of any of the instalments the whole sum of Rs. 67,48,841/11 together with interest would become due. A deed of Agreement, Guarantee and Equitable Mortgage showing the total income and total net iax liability of each shareholder were shown. They were JUDGEMENT_404_1_1970Html2.htm The Company paid the following sums by way of tax : JUDGEMENT_404_1_1970Html3.htm Narendra Singh Singhi paid the following sums by way of tax : JUDGEMENT_404_1_1970Html4.htm 408 Smt. Champa Kumari paid the following sums by way of tax JUDGEMENT_404_1_1970Html5.htm Rajendra Singh Singhi paid the following sums by way of tax : JUDGEMENT_404_1_1970Html6.htm ON 22/04/1952 they signed the agreement. By that date the position in the payment of instalments had reached item (c) above showing Rs. 9,50,000.00 as due on 31/03/1953. ON 29/08/1952 the Income-Tax Officer made several assessment orders in respect of the assessment years 1947-48 to 1951-52. Each such order included the following: "In accordance with the terms of the Agreement, dated 22/04/1952, executed in connection with the petitions, dated IBthJuly, 1951 filed by the assessee and others under concessional scheme for the settle- ment of disclosures announced by the government of India, the assessment is made as under :" and then follows the computation of total income, the computation of tax and the total amount demanded. On 22/09/1952 the Income-tax Officer (Companies District 1), Calcutta sent the following letter to each assessee. The one sent to Smt. Champa Kumari Singhi may alone be quoted here as an example : "From: Shri V. Satyamurti, M.A., B.L., Income Tax Officer, Companies District 1, Calcutta. To Smt. Champa Kumari Singhi, 49, Gariahat Road, Calcutta. Madam, I am sending today by separate post (Regd. with A/D) copies of Assessment Orders, Penalty Orders Demand notices and chalans; etc. in regard to the amount of taxes and penalties payable by you in accordance with the terms of the Agreement, dated 22/04/1952 between you and the government drawn up in connection with the disposal of the disclosure petition filed by you under the concessional scheme. In the Demand notices and chalans, demands have been shown to be payable on or before the 31/03/1953 when the next instalment of payment under this Agreement falls due. Needless to say, if there is no default in the matter of payment of that instalment {viz., Rs. 9,50,000.00 with all interest due thereon by 31/03/1953) further extension of time for payment of the balance will be granted by me. Yours faithfully, dated (Sd.) Illegible 22-9-52. Income Tax Officer." 409 With this letter were forwarded the assessment orders and notices of demand under Section 29 of the Income-tax Act, 1922. These notices of demand reached the several appellants on 24/09/1952. Similar notices of demand for Excess Profits Act and Business Profits Tax were also served calling upon the assessee to pay the dues on or before 31/03/1953.;