S.C.MANCHANDA,J. - (1.) THIS is a writ petition under Art. 226 of the Constittution directed against the notices issued under s. 22(4), S. 28(1)(a) and S. 46(5A) of the IT Act (hereinafter referred to as the Act). the prayer is for the quashing of the aforesaid notices issued in respect of the assessment proceedings for 1953 - 54 and 1954 -55. A prayer is also made to assess the firm, M/s Ram Bilas Kedar Nath, for the asst. yrs. 1953 -54 and 1954 -55.
(2.) THE petition is supported by an affidavit which makes allegations against the ITO of harassment. No counter -affidavit was filed and, therefore, the allegations made in the petition must be taken to be true. The only point urged by the learned standing counsel is, what he calls a legal point for which no counter -affidavit was necessary, and that is that a writ of mandamus can never issue so long as the ITO had jurisdiction to make the assessment. According to him there is no period of limitation at all in respect of an assessment made under S. 23 of the Act to which the provision of s. 28(1)(c) could be made applicable. In other words, his contention is that it is not obligatory on the ITO to make any assessment within the period of four years and it would be open to him, theoretically speaking, to keep such an assessment pending beyond the period of four years and to justify the completion of the assessment after a number of years on the ground that the provisions of S. 28(1)(c) were attracted. The question is whether that was the intention of the legislature in providing in S. 34(3) that the normal period of four years for completing an assessment will not apply to an order of assessment under S. 23 to which cl. (c) of sub -s. (1) of S. 28 applies. Before dealing with this point it is necessary to set out, in brief, the past history of this case. The relevant assessment years are 1953 -54 and 1954 -55. On the 10th December, 1955, an assessment order under S. 23(4) in respect of the relevant assessment years was passed on the ground that there was default of notices under S. 22(2) and S. 22(4) of the Act. An appeal from this was taken to the Tribunal who by its order dt. 13th April, 1959, cancelled the assessment on the ground that notices under S. 22(2) were never served upon the petitioner. On the 28th March, 1960, the ITO issued a notice under S. 34(1)(a) of the Act. Against the issue of this notice the petitioner came up to this Court in Writ Petition No. 2207 of 1960, challenging the issue of that notice under S. 34(1)(a) of the Act on the ground that the petitioner had already filed voluntary returns on the 20th of December, 1955, and 21st Feb., 1956, for the asst. yrs. 1953 -54 and 1954 - 55 respectively, and, therefore, the notice under S. 34(1)(a) was invalid. This Court accepted the fact that voluntary returns had been filed and, following the decision of the Supreme Court in CIT vs. Ranchhoddas Karsondas (1959) 36 ITR 569 (SC) : TC9R.314, quashed those notices by the issue of a writ of certiorari. Thereafter, ss. 23(2) and 22(4) notices were issued on the 20th July, 1962, and, though the notice under S. 22(4) was duly signed, the notices under S. 23(2) were not signed. The petitioner replied on 28th July, 1962, submitting that the assessments had become time -barred as the four -year period of limitation had already expired on the 31st March, 1958, and 31st March, 1959, respectively. Thereafter, no further action was taken for several months till the 14th Jan., 1963, when the ITO issued notices for rehearing of the S. 28(1)(a) proceedings which had been initiated earlier, before the notices under S. 34(1)(a) were quashed by this Court by its order dt. the 12th Dec., 1961. On the 21st Jan., 1963, the petitioner pointedly drew the attention of the ITO to the fact that the proceedings under S. 28(1)(a) stood to be dropped because the notice under S. 34(1)(a) itself had been quashed by the High Court. Notwithstanding this, the ITO still persisted by his notice dt. the 6th April, 1963, and required the petitioner to attend his office at Kanpur on the 24th April, 1963, in connection with the above case to explain as to why penalty under ss. 271 and 273 of the IT Act, 1961, be not imposed on him. The ITO proceeded to issue a notice under S. 22(4) and on the 15th April, 1963, and 18th April, 1963, for the two relevant assessment years respectively fixing the date as the 13th May, 1963. The ITO earlier on the 16th July, 1959, even before the assessment was made or the petitioner could be said to be in default had also issued notices under S. 46(5A) to the Upper India Sugar Exchange to withhold payment of the sums of Rs. 1,507 -37 nP. and Rs. 2,963 36 nP. due by them to the petitioners, M/s Ram Bilas Kedar Nath. The present writ petition was filed on the 8th May, 1963.
(3.) THE learned standing counsel has conceded that a writ in the nature of certiorari may issue quashing all the notices issued under S. 46(5A) to the Upper India Sugar Exchange Ltd. and also the penal notices issued from time to time under S. 28(1)(a) of the Act relating to the proceedings under S. 34(1)(a) of the Act. The only question for consideration, therefore, that remains is the one set out hereinabove as to the bar of limitation to the making of an assessment in respect of voluntary returns filed after the lapse of four years. No penalty notice in fact was ever issued under s. 28(1)(c) of the Act during the course of the assessment proceedings under S. 23(4) of the Act and when that assessment order was set aside and the ITO was required to make an assessment on the basis of the voluntary returns filed by the assessee, he was bound to complete that assessment under S. 23 of the Act within the normal period of 4 years provided for the completion of all assessments under S. 34(3) of the Act, unless there exists a prima facie case for the applicability of the provisions of S. 28(1)(c) of the Act. If for four long years the ITO had not been able to glean any information from any outside source of any concealment and no notice under s. 28(1)(c) was issued when the assessment under S. 23(4) was completed by him, he cannot on any theoretical considerations or on the remote possibility of discovering some concealment in the future arrogate to himself the right to complete the assessment after the lapse of four years. If that were the law then no assessment need ever be completed within the normal period of four years and the sword of Damocles. could be kept hanging over the head of the assessees for all time to come. The ITO cannot by merely saying to himself that some day he may discover something which might justify his applying the provisions of S. 28(1)(c) confer upon himself the necessary jurisdiction to make an assessment under S. 23 without any bar of limitation.;