Gupta, J. - (1.) These six appeals by certificates granted by the High Court of Delhi arise out of six writ petitions filed by the respondent before us challenging the validity of six notices dated September 7. 1965 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act). The notices relate to the assessment years 1949-50 1950-51 and 1951-52, the corresponding accounting years ending on the 30th September of 1948, 1949 and 1950 respectively. Three of the notices were issued to the petitioner in his individual capacity and the other three were served on him as a member of an association of Persons. The petitioner had been assessed as an individual for the aforesaid assessment years in accordance with the provisions of the Indian Income Tax Act, 1922. Thereafter a Commission known as Vivian Bose Commission was appointed to enquire into the affairs of various companies with which the appellant was alleged to have been associated. On the facts disclosed in the report of enquiry, the Income-tax Officer, Special Investigation Circle A, New Delhi, issued the aforesaid two sets of notices to the petitioner under Section 148 of the Act. The notices informed the petitioner that these were issued "after obtaining the necessary satisfaction of the Central Board of Direct Taxes, New Delhi". This claim was questioned by the petitioner in the High Court and one of the grounds on which the validity of the notices was challenged was that sanction of the Central Board of Direct Taxes had not been taken before the notices were issued as required by Section 151 of the Act. The High Court accepting this contention quashed all the six notices served on the petitioner and by issuing a writ of prohibition restrained the appellants, the Union of India, the Central Board of Direct Taxes, New Delhi and the Income-tax Officer, Special Investigation Circle A, New Delhi from taking any action upon these notices. As the writ petitions succeeded on this ground, the High Court did not consider the other objections to the notices raised in, the petitions. The propriety of that decision is in question in these appeals.
(2.) The relevant part of S. 151 of the Act reads as follows: "151. Sanction for issue of notice.- (1) No notice shall be issued under Section 148 after the expiry of eight years from the end of the relevant assessment year, unless the Board is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue- of such notice. (2) ********** Section 4 (1) of the Central Boards of Revenue Act. 1963 provides: "The Central Government may make rules for the purposes of regulating the transaction of business by each Board and every order made or act done in accordance with such rules shall be deemed to be the order or act, as the case may be, of the Board." "Board" as defined in Section 2 of this Act means the Central Board of Direct Taxes-or the Central Board of Excise and Customs. Rule 4 of the Central Board of Direct Taxes. (Regulation of Transaction of Business) Rules, 1964 is in these terms: "The Chairman may, by an order made with the previous approval of the Central Government, distribute the business of the Board among himself and the other Members and specify the cases or class of cases which shall be considered jointly by the Board." What happened in this case was that the Income-tax Officer put up the case of the respondent to the Central Board of Direct Taxes by a comprehensive note prepared by him and Shri S. A. L. Narayana Row, the only Member of the Board besides the Chairman. on being satisfied on- the reasons recorded by the Income-tax Officer that for each of the assessment years in both capacities of the respondent a fit case had been made out for the issue of a notice under Section 148 of the Act. the impugned notices were issued to the respondent. In support of his case that sanction of the Board had not been obtained the respondent relied on the Office Order dated January 1, 1964 annexed to the affidavit of Shri P. G. Gandhi, Under Secretary, Central Board of Direct Taxes, filed in answer to the writ petitions, which sets out the distribution of work between the Chairman and the Member of the Central Board of Direct Taxes. In this document, entry No. 7 in the list of work allotted to the Chairman reads:"all assessment work of Income-tax". It was contended that Shri Narayana Row had therefore no authority to deal with cases for reopening of assessments and as such the impugned notices issued upon his satisfaction were invalid. In paragraph 5 of the affidavit of Shri P. G. Gandhi. it is admitted that "all assessment work of income-tax" had been assigned to the Chairman under office order dated January 1, 1964 which included matters relating to the reopening of assessments under Section 34 of the Income Tax Act, 1922 or under Section 147 of the Income Tax Act, 1961, but the paragraph adds that "later with the approval of the Central Government this item of work was assigned to the Member of the Board Shri S. A. L. Narayana Row who in this case accorded the sanction"
(3.) An affidavit affirmed by Shri J. P. Singh who at the relevant time was the Chairman of the Central Board of Direct, Taxes and ax-officio Additional Secretary to the Government of India in the Ministry of Finance, was also filed on behalf of the appellants Paragraphs 3 to 7 of Shri Singh's affidavit state how Shri Narayana Row came to deal with the cases relating to the reopening of assessments. These paragraphs read as follows: "3. That on 30-3-64 I suggested to Shri S. A. L. Narayana Row, the then Member of the Central Board of Direct Taxes that he should take up the work of according sanction of the Board under Section 151 (1) for reopening of assessments under S. 147 of the Income Tax Act, 1961 to which he consented. 4. Rule 4 of the Central Board of Direct Taxes (Regulation of Transaction of Business) Rules, 1964 envisaged that Chairman may by an order made with the previous approval of the Central Government distribute the business of the Board among himself and the other members. The approva1 regarding the transfer of work relating to sanction under S. 151 (1) of Income Tax Act from the Chairman to the Member Central Board of Direct Taxes was accordingly referred to by me to the Secretary, Ministry of Finance (Department of Revenue and Expenditure) on 9-6-1964. 5. That on 18-6-64. I personally discussed the proposal regarding transfer of work from myself to the Member, Central Board of Direct Taxes with Shri V. T. Dehejia, the then Secretary of the Government of India, Ministry of Finance (Department of Revenue and Expenditure). 6. That Shri V. T. Dehejia, the then Secretary to the Government of India, Ministry of Finance (Department of Revenue and Expenditure) approved the said proposal to which effect a note was made by me on 18-6-64. 7. That pursuant to the duty assigned to him under Rule 4 of the Central Board of Direct Taxes (Regulation of Transaction of Business) Rules 1964, Shri S. A. L. Narayana Row, Member, Central Board of Direct Taxes gave sanction for the reopening of the assessments under Section 147 of the Income Tax Act, 1961 in the aforesaid case on 11-8-1965.";