Shah, J. - (1.) M/s. Kantamani Venkata Narayana and Sons-hereinafter referred to as 'the assessee, is a Hindu undivided family which was assessed to tax on income derived principally from money-lending. In the course of proceedings for assessment of a private limited company styled "Motu Industries Ltd.", the Income-tax Officer Rajahmundry discovered that there was a large accretion to the wealth of the assesses which had not been disclosed in proceedings for its assessment. On March 12, 1959, the Income-tax Officer issued a notice seeking to reopen the assessment for the year 1950-5l . The assessee filed a return under protest. On March 14, I960 the income-tax Officer issued notice of re-assessment for the year 1951-52, and on December 19, 1960, the Income-tax Officer intimated the reasons that had prompted him to issue the notices of re-assessment. On March 24, 1962 the Income-tax Officer issued notices under S. 34 for re-assessment of income of the assessee for the years 1940-41 to 1949-50. The assessee then presented petitions in the High Court of Andhra Pradesh for writs of prohibition directing, the Income-tax Officer to refrain from proceeding in pursuance of the notices for the assessment years 1940-41 to 1949-50 and 1950-51 and 1951-52. A single Judge of the High Court rejected the petitions and the order was confirmed in appeal by a Division Bench of the High Court. The assessee has appealed with special leave.
(2.) The notice issued by the Income-Tax Officer did not refer to Section 34 (1) (a) of the Income Tax Act:it did not set out the clause under which it was issued. But on that account the proceeding under S.34 is not vitiated. It was held by the Calcutta High Court in P. R. Mukherjee v Commissioner of Income-tax, West Bengal, 1956-30 ITR 535, that it is not necessary or imperative that a notice under S. 34 must specify under which of the two clauses-Cl. (a) or Cl. (b) of sub-s. (1) of S. 34, the notice is issued. The main notice to be issued in a case under S. 34 is the notice under S. 22 (2), and S. 34 merely authorises the issue of such a notice.
(3.) The proceedings for re-assessment cover a period of 12 years:1940-41 to 1951-52. Section 34 of the Income Tax Act has undergone some changes during that period, but the basic scheme of the Section has remained substantially the same. Power to re-assess income under S. 34 (1) as amended by Act 7 of 1939 could be exercised if "definite information'' had come into" the possession of the Income-tax Officer, and in consequence of such information it was discovered that income chargeable to tax had escaped assessment By the Income-tax and Business Profits Tax (Amendment) Act 48 of 1948, S. 34 (1) was recast to read as follows: "(1) If - (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return-of his income under S. 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, * * or (b) notwithstanding that there has been no omission or failure as mentioned in Cl. (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, * * * he may in cases falling under Cl. (a) at any time and in cases falling under Cl. (b) at the time within four years of the end of that year, serve on the assessee, * * * a notice containing all or any of the requirements which may be included in a notice under sub-s. (2) of S. 22 and may proceed to assess or re-assess such income, profits or gains * * * *". An Explanation was also added which states: 'Explanation.- Production before the Income-tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure within the meaning of this Section". Since on the matter canvassed in these appeals there is no material change in the Section, we will only refer to the Section as amended by Act 48 of 1948.;