TAMBE, J. - (1.) THIS is an application under Arts. 226 and 227 of the Constitution of India. All the contentions raised in the petition have not been pressed before us, and it is, therefore, not necessary to refer to all the allegations made in the petition.
(2.) THE facts which are material to the contentions raised and which have been stated before us by counsel for the petitioner in brief are : The petitioner before us is Karta of the HUF of Laxminarayan R. Rathi, residing at Mangalwar Peth, Sholapur. The HUF has been in due course assessed to income -tax for the asst. yrs. 1940 -41 to 1948 -49. The HUF had also been reassessed for the asst. yrs. 1941 -42 and 1943 -44 under S. 34 of the Indian IT Act (hereinafter called the Act). On 23rd March, 1962, the ITO, Special Investigation Circle, Poona, issued nine notices under S. 34 of the Act, in respect of asst. yrs. 1940 -41 to 1948 - 49. All these notices are in identical terms. In brief, it is stated in these notices that whereas the ITO had reason to believe that the income of the assessee assessable to income -tax for the said assessment years had escaped assessment, been under -assessed, or had been the subject of computation of excessive loss or depreciation allowance, it was proposed by the ITO to assess or reassess the said income. The notice further called upon the assessee to deliver to the ITO not later than 27th April, 1962, or within 35 days of the receipt of the notice, a return in the attached form of the assessee's total income and total word income assessable for the said years. The notices further stated that they had been issued after obtaining the necessary satisfaction of the Central Board of Revenue. By this petition, the assessee seeks to get quashed seven out of these nine notices on the ground that it was beyond the jurisdiction of the ITO to issue these notices after 31st March, 1956, and, therefore, these notices are liable to be quashed. The petitioner, therefore, prays for issue, under Arts. 226 and 227 of the Constitution of India, of a direction, order or a writ, including a writ in the nature of certiorari, quashing the notices of date 23rd March, 1962. The petitioner further prays for issue, under Arts. 226 and 227 of the Constitution, of a direction, order or a writ, including a writ in the nature of mandamus and/or prohibition, permanently restraining the respondent, his servants and agents from taking any proceedings by way of assessment or otherwise in pursuance of the said notices of date 23rd March, 1962. Mr. Palkhivala, appearing for the petitioner, at the outset stated that the petitioner is not asking for quashing of the notices issued for the asst. yrs. 1947 -48 and 1948 -49, but is confining his prayer only to the notices issued for the asst. yrs. 1940 -41 to 1946 -47. The contention of Mr. Palkhivala is two - fold. In the first instance, he contends that to the facts and circumstances of the case, the apposite provision of law applicable is Sub -S. (1A) of S. 34 of the Act, and not Sub -S. (1) (a) of S. 34 of the Act. Sec. 34(1A) empowers the ITO to issue notices for the asst. yrs. 1940 -41 to 1946 -47 only up to 31st March, 1956; the impugned notices of date 23rd March, 1962, having been given after 31st March, 1956, are beyond the competence and jurisdiction of the ITO, and are, therefore, liable to be quashed. In the alternative, Mr. Palkhivala contends that even assuming that the apposite provision of law applicable to the case is S. 34(1)(a) and not S. 34(1A), the outside time -limit mentioned in S. 34(1A), namely, 31st March, 1956, must be imported in S. 34(1) (a), and S. 34(1)(a) must be read as subject to the outside time -limit mentioned in S. 34(1A).
(3.) MR . Joshi, appearing for the ITO, the respondent hereto, contends that the cases of the petitioner were transferred to the respondent, and similarly, cases of one Kisanlal Badrilal also had been transferred to the respondent. The said Kisanlal is the father -in -law of Laxminarayan Rathi, the Karta of the petitioner family. Kisanlal Badrilal owned business. It was noticed in the assessment proceedings of Kisanlal that his balance -sheet showed a capital of Rs. 10 lakhs and odd, though the sources of the family, of which Kisanlal was the Karta, were meagre. This large capital was used for making advances to various firms in which Laxminarayan Rathi was a partner. The said large advancs made to Laxminarayan Rathi were practically without interest. Further investigation in the matter led the respondent to believe that the capital alleged to belong to Kisanlal really belonged to the petitioner family. The respondent having reason to believe that this large capital which belonged to the petitioner represented his income from undisclosed sources, action under S. 34 was initiated after obtaining the necessary satisfaction of the Board of Revenue. According to Mr. Joshi, the notices issued fall under S. 34(1)(a), and that is the apposite provision of law applicable to the case. Under the said S. 34(1)(a), it is open to the respondent to issue notice at any time, and, therefore, it was within his jurisdiction and competence to issue these notices; the notices are not bad in law, and are not liable to be quashed.;