B.M. Lal, J. - (1.) THIS petition under Article 226 of the Constitution of India is directed against a notice dated March 2, 1993, issued by the respondent under Sections 147 and 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), in respect of income which had escaped assessment for the assessment years 1989-90 and 1990-91.
(2.) THE short facts leading to this petition are as under : THE petitioner, who is sole proprietor of Messrs. G. P. Enterprises, derives income from his proprietorship concern, Messrs. G. P. Enterprises, and thus he has been assessed as an individual under the Act. The petitioner has filed income-tax returns for the assessment years 1989-90 and 1990-91 showing taxable income amounting to Rs. 1,74,770 for the assessment year 1989-90 and Rs. 2,02,390 for the assessment year 1990-91, and claimed deduction under Section 80-I of the Act to the tune of Rs. 42,848.40 for the assessment year 1989-90 and Rs. 54,547.54 for the assessment year 1990-91. However, it appears that the Assistant Commissioner, Income-tax, Circle-I, Ghaziabad, accepted the return as disclosed by the assessee. Later on, on account of some audit objection, it was brought to the notice of the Assistant Commissioner, Income-tax, Ghaziabad, that the petitioner was not entitled to any deduction under Section 80-I of the Act since he has not complied with the conditions laid down under that provision.
(3.) ON the basis of the said audit objection, the Assistant Commissioner, Income-tax, Ghaziabad, had issued a notice for rectification of the mistake for the assessment years 1989-90 and 1990-91 informing the assessee that he is not entitled for such deduction as claimed by him under Section 80-I of the Act. It appears that on October 22, 1992, the assessee has filed a reply to the rectification proceedings contending that the petitioner is an industrial undertaking and is engaged in the manufacture of flavoured chewing tobacco which is commonly known as "zarda" on job work basis and also explained the total process of manufacturing zarda, and thus contended that rectification proceedings be dropped. However, respondent No. 1 after making necessary enquiry into the matter even from the account books of the petitioner and having been convinced, it appears, dropped the proceedings. On December 16, 1992, the petitioner received notice contemplated under Sections 147 and 148 of the Act for both the assessment years that certain income chargeable to income-tax has escaped assessment, vide annexure-5 to this petition, which is under challenge.;