- (1.) This is an appeal by certificate against the judgment of the High Court of Calcutta rendered on a reference under sub-s. (1) of Sec. 66 of the Indian Income-tax Act, 1922 (hereinafter referred to as the 'Act'). The assessee it appears, had filed voluntay returns of income for the assessment years 1955-56 to 1959-60 giving her address as 5/A Byack Street, Calcutta which was then within the jurisdiction of the Income-tax Officer 'J' Ward, District 1 (1) Calcutta. The return for 1958-59 was dated 22nd August 1959 while the assessment for the other years were antedated. It also appears from the order sheet that the Income-tax Officer had directed issue of notices under Section 23 (2) in respect of the five years on 14th December 1959 which notices were purported to have been received personally by the authorised representative of the assessee on the same date. The cases were heard on 21st and 23rd Dec. 1959 and the assessment for these years was completed by the Income-tax Officer on 23rd December, 1959. It further appears from the records that the assessee had signed a declaration on 15th December, 1959 stating inter alia that: (i) at the time of her marriage with Sri Ram Prasad Luharwala about 15 years ago, the assessee received presents and dowry and birth day presentations on different occasions in kind as well as in cash to the extent of Rs. 18,000/- and also a sufficient quantity of ornaments. (ii) with this amount of cash, she started business of investment on interest and out of the interest on interest and out of the interest received she could save about Rs. 600/- after meeting her expenses up to March 1950; (iii) the sum of money at her disposal in March 1950 was Rs. 13,500/- which had been shown as the initial capital for the accounting year 1950-51; (iv) subsequently she started speculation business in shares in addition to the investment business and out of the income from this business she made the following investments and acquisition : (A) Purchase of a piece of land on 14-8-1956 for Rs. 2,299/-; (B) Investment of two sums of Rs. 50,000/- each on 26th November, 1957 adn 28th November, 1957 with M/s. Kaluram Prahledrai on interest; (v) she sold some of her ornaments in the year 1955-56 for Rupees 30,600/- and the remainder of her ornaments in 1956-57 for Rs. 37,400/- and the certificates showing the sale of such ornaments were enclosed with declaration; (vi) the assessee was doing the aforesaid business in her individual capacity and this business had no connection with the business of her husband; (vii) she kept no regular books of account and neither had she any bank account. The Income-tax Officer, J-Ward District I (I) Calcutta who made the assessment for the years 1955-56 to 1959-60 accepted the initial capital and the fact that the assessee had been carrying on money lending and speculation business. He made an addition of Rupees 1,000/- to the disclosed income of Rs. 4,300/- and made an assessment on a total income of Rs. 5,300/- for the assessment year 1955-56. Similar short stereo-typed assessment orders were made for each of the years 1955-56 to 1959-60, the income assessed for these years being Rupees 5,500/-, Rs. 6,000/-, Rupees 6,900/- and Rupees 7,500/- respectively.
(2.) For the assessment year 1960-61 also a voluntary return dated July 6, 1960 was received by the Incom-tax Officer on July 20, 1960 and on November 30, 1960 the Income-tax Officer directed the issue of a notice under Section 23 (2) fixing the date of hearing on February 25, 1961. Thereafter by her letter dated March 13, 1961 the assessee informed the Income-tax Officer that her place of business had been shifted to No. 1, Gunsala Road, Lillooah Howrah and on the basis of this letter the assessee's file was transferred to the Income-tax Officer 'D' Ward, Howrah. On July 2, 1961 the Income-tax Officer Howrah again issued notice under Section 23 (2) of the Act fixing the hearing on July 10, 1961. This notice was also received by the assessee's authorised representative and the assessment for that year was made on the date of hearing, viz., 10th July 1961, when the demand notice, challan and a copy of the assessment order were stated to have been personally served on the said authorised personal representative on 10th July 1961.
(3.) In his assessment for the above year the Income-tax Officer Howrah while remarking that the source of income of the assessee during the accounting year was income from speculation and interest on investments stated that neither the assessee was able to produce the details and vouchers of the speculative transactions made during the accounting year nor was there any evidence regarding the interest received by her from different parties on her investments. Notwithstanding these defects he did ndot investigate into the various sources but assessed the appellant on a total income of Rs. 9,037/-. Thereafter on 7th June 1963 the Commissioner by a notice under S. 33-B of the Act required the assessee to show cause on or before June 25, 1963 why appropriate orders should not be passed under that section in respect of the assessment year 1960-61 as the enquiries revealed that the assessee neither resided nor carried on any business from the address given in the return, that the Income-tax Officer was not justified in accepting the initial capital, the sale of ornaments, the income from business, the investments etc. without any enquiry or evidence whatsoever and that the order of assessment was erroneous and prejudicial to the interests of revenue. In response to the aforesaid notice, the assessee showed cause on June 24, 1963 and after considering the objections of the assessee, the Commissioner passed an order cancelling the assessment for 1960-61 and directing the Income-tax Officer to make a fresh assessment according to law after making enquiries with regard to the jurisdiction and the business carried on by the assessee, the possession of initial capital, acquisition and sale of ornaments, purchased of plot of land and resources and the money invested in the name of the assessee. In his order the Commissioner held that the assessment made by the Income-tax Officer were made in post haste without making any enquiry or investigation into the antecedents of the assessee. He further held that on enquiry it had been ascertained that the Income-tax Officer 'J' Ward, District I (1) Howrah (Calcutta ) had no jurisdiction over the assessee, the assessments made by him were ab initio void inasmuch as the departmental enquiries revealed that the assessee never resided nor carried on any business either at premises 5/A Byack Street, Calcutta or at No. 1 Gunsala Road, Lillooah, Howrah. In fact the assessee had been living with her husband ever since her marriage in 1946 at Raniganj and for that reason he was of opinion that the Income-tax Officer was not justified in accepting the claim of initial capital of Rs. 13,500/- without any evidence placed on record nor was he justified in accepting that the assessee being a married lady was carrying on speculative business at Calcutta. The Commissioner refused to believe the sale of gold ornaments of the value of Rupees 68,000/- during the years 1955-56 and 1956-57 as genuine as no details of such ornaments were given. He further stated that the departmental enquiry had subsequently revealed that the firm of Keshardeo Aggarwal and Co., of 29, Burtolla Street, Calcutta through whom the ornaments were sold was not a genuine firm and that the assessee's husband was a partner in a firm of M/s Kaluram Prahladraj of Asansol in which the assessee is allowed to have made an investment of two sums of Rs. 50,000/- on 26th and 28th November 1957. In the result, having regard to the fact that the assessments for the years 1955-56 to 1959-60 were already beyond time for taking action, he cancelled the assessment for 1960-61 and directed the Income-tax Officer to make a fresh assessment as stated above.;