Shah, J. - (1.) Madhya Pradesh Industries Ltd - hereinafter called "the company" - is engaged in the business of mining manganese ore. On March 18, 1952, the company appointed Messrs. J.K. Alloys Ltd - hereinafter called "Alloys" - as its selling agent. In the account year relating to the assessment year 1953-54, the company paid Rs. 1,13,052-8-9 to the selling agents and claimed it as a revenue outgoing in the computation of its profits for that year. The Income- tax Officer made an order of assessment without expressly referring to the claim for allowance to Alloys.
(2.) On December 26, 1960, the Income-tax Officer issued a notice to the company in exercise of the power under section 34 of the Income Tax Act reciting that having "reason to believe that" the income of the company assessable to income-tax for the assessment year 1953-54 had "(a) escaped assessment, (b) been under-assessed", he proposed to reassess the said income that had "(a) escaped assessment, (b) been under-assessed" and directed the company to deliver a return of the total income of the company assessable for the said assessment year 1953-54. The company by letter dated January 30, 1961, called upon the Income-tax Officer to disclose whether the notice was issued under clause (a) or clause (b) of the sub-section (1) of section 34. It was assorted in the letter that all facts necessary for the purpose of assessment had been fully and truly disclosed in the original assessment, and the notice was misconceived. In reply to this letter the Income-tax Officer on February 16, 1961, informed the company that the notice was issued under section 34(1)(a). The Income-tax Officer also issued "a questionnaire" demanding information about the commission paid together with copies of the agreement with Alloys and correspondence relating to sales through Alloys. On December 21, 1961, the Income-tax Officer informed the company that since the questions were not replied to, he presumed that no correspondence with Alloys existed and that the payment of commission had been made without any justification. Alloys having rendered no service as selling agents.
(3.) On April 2, 1962, the company presented a petition in the High Court of Judicature of Bombay (Nagpur Bench) praying for the issue of a writ of certiorari under article 226 of the Constitution or an appropriate direction or order under article 227 of the Constitution, calling for the records of the case, and for the issue of writs in the nature of prohibition or mandamus restraining the Income-tax Officer from taking any action or proceedings in enforcement or implementation of the notice dated December 26, 1960. This petition was rejected in limine by the High Court by order dated April 7, 1962. With special leave, the company has appealed to this court against the order of the High Court.;