- (1.) ONE writ petition has been filed in respect of the notices under sections 147 and 142 of the Income-tax Act, 1961, in respect of the assessment years 1957-58 and 1958-59. ONE petition in respect of two such notices for two separate assessment years does not lie and, therefore, Mr. R. K. Gulati, the learned counsel for the petitioners, elected to confine the petition only to the assessment year 1958-59.
(2.) THE relief sought is for the quashing of the orders, annexures "F-1" and "H-1", under sections 147(1) and of the Act for the assessment year 1958-59. The facts leading up to this petition are these. The petitioner was one of the partners of the firm which carried on business of brick manufacturers in the name and style of Messrs. Krishna Brick Field, Sulem Sarai, Allahabad. The petitioner had an as. 0-7-0 share in the profits of the aforesaid firm in the relevant year of account. Two amounts of Rs. 6,380 and Rs. 5,936 were found credited in the books of the firm in the personal account of the petitioner on the 22nd February, 1957, and on the 1st of November, 1957, respectively. The firm closed its accounts on the 31st October each year and accordingly the two amounts mentioned in the preceding paragraph fell within the previous year relevant to the assessment years 1958-59 and 1959-60, respectively. The petitioner in respect of his personal assessment also adopted the same previous year. In the return for 1958-59, the petitioner showed the amount of Rs. 6,380 in Section D, Part I, of the return and claimed that this sum represented the sale of ornaments and was therefore a capital receipt. The sum of Rs. 5,936, with which the present petitioner is concerned, was not, however, shown in Section D of Part 1 of the return filed for the assessment year 1959-60. The assessment, however, for both these years was taken up simultaneously and in the course of the assessment proceedings the actual receipts in respect of the alleged sale of ornaments, which took place on the 1st of November, 1957, were also filed along with the receipts for the sale which took place on the 22nd February, 1957. The assessment order dated the 29th March, 1963, for the assessment year 1958-59 clearly mentions : "No doubt I myself had made similar enquiries during the course of the assessment proceedings for the year 1959-60 in the case of the assessee in respect of the credit of Rs. 5,936 in the books of the firm. The assessees reply dated December 29, 1960 enclosed with the explanation is on the miscellaneous file of the assessee for the assessment year 1959-60. The sale vouchers mentioned by the assessee are in respect of the sale of ornaments for Rs. 5,936 pertaining to 1959-60 assessment and there is no voucher for the sale of ornaments to Shri Jagannath Seth, Allahabad."
(3.) THE assessees explanation was disbelieved and the sum of Rs. 6,380 was brought to assessment in the assessment year 1958-59. Before, however, the sum of Rs. 5,936 could similarly be brought to the assessment year 1959-60, the appeal for 1958-59 had been heard by the Appellate Assistant Commissioner who considered that, as this income was treated as income from an undisclosed source, it fell to be assessed on the basis of the financial year and not on the basis of the assessees previous year. A direction was, therefore, given in respect of the sum of Rs. 6,380 that it be assessed for the assessment year 1957-58. In respect of the sum of Rs. 5,936, which was also income from an undisclosed source, the Income-tax Officer, following the Appellate Assistant Commissioners order for the earlier assessment year 1958-59, considered that this amount could not be added as income from an undisclosed source in the assessment year 1959-60, but that it fell to be assessed in the assessment year 1958-59. He, accordingly, left this amount of Rs. 5,936 out of the original assessment made for the assessment year 1959-60. THE Income-tax Officer, thereafter, in respect of the sum of Rs. 5,936, which, according to him, had escaped assessment, issued a notice under section 147(1) of the Income-tax Act, 1961, on the 15th of May, 1964, for the assessment year 1958-59. Prima facie, the notice issued was beyond the period of four years. The Income-tax Officer, therefore, in order to bring the case within the mischief of section 147(1), was obliged to fulfill the condition precedent under that sub-section. That condition was that there should have been a failure on the part of the petitioner to fully and truly disclose all the material facts necessary for his assessment. A notice under section 142 was also issued. It is the validity of these two notices which is the subject-matter of attache in this writ petition.;