CHANDRASHEKHAR, J. - (1.) IN this petition under article 226 of the Constitution, the petitioner has prayed for issue of a writ quashing the notices issued to it (the petitioner) under Section 148 of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'), for the assessment years 1963 -64 to 1968 -69, and for issue of a writ of prohibition restraining respondent No. 1, the Income -tax Officer, ' B ' Ward, Azamgarh (hereinafter referred to as ' the ITO '), from proceeding with the reassessment proceedings in pursuance of such notices.
(2.) AT the outset, certain material facts which are not in dispute may be stated. The petitioner is a firm which was assessed to income -tax. In the assessment year 1963 -64, the petitioner claimed that it had borrowed a sum of Rs. 50,000 on May 19, 1962, from M/s. Jain Finance Distributors (India) (Private) Ltd., having its registered office at Calcutta (hereinafter referredto as the ' Calcutta company '). This alleged borrowing was shown in the entry dated May 25, 1962, in its (the petitioner's) books of account and in the balance -sheet as liability. In the interest account produced before the ITO interest on this amount of Rs. 50,000 was shown for each of the relevant previous years. At the' instance of the ITO, it (the petitioner) filed a copy of the account of the Calcutta company with it. It also produced before the ITO a letter dated November 15, 1963, written by the Calcutta company confirming this alleged loan of Rs. 50,000 to the petitioner on May 19, 1962. In the assessment of the petitioner for each of the years 1963 -64 to 1968 -69 the ITO allowed deduction of interest claimed to have been paid by the petitioner to the Calcutta company on this sum. On August 26, 1971, the ITO issued a notice to the petitioner in which it was stated, inter alia, that the deposit of Rs. 50,000 appearing in the name of the Calcutta company was not genuine, that it (the petitioner) failed to disclose fully and truly all the material facts necessary for its assessment for the year 1963 -64, that thus its income chargeable to tax had escaped assessment and that he proposed to reopen the case for the assessment year 1965 -66 under Section 147(a) of the Act. The petitioner was asked to file its objections within a week from the date of the receipt of that notice whereto it (the petitioner) sent on November 25, 1972, a reply in which it contended, inter alia, that there was no non -disclosure on its part in respect of the loan of Rs. 50,000 and that since all the primary facts had been disclosed at the stage of the original assessment, the provisions of Section 147(a) were wholly inapplicable.
(3.) THEREAFTER , the ITO issued to the petitioner notices under Sections 148 of the Act proposing to reassess the income of the petitioner for the years 1963 -64 to 1968 -69 and calling upon it to file its returns for those years within 30 days from the date of service of the notice.;