K.L.Roy, J. - (1.) This is an application under Article 226 of the Constitution challenging the validity of a notice issued under Section 148 of the Income-tax Act, 1961, for reassessment of the income of the petitioner for the assessment year 1952-53. This rule was issued by this court on the 3rd April, 1969, directing the respondents, the Income-tax Officer, "A" Ward, District IV(I), Calcutta, the Commissioner of Income-tax, West Bengal III, and the Union of India, to show cause why writs in the nature of mandamus, certiorari and prohibition should not issue cancelling and/or quashing the aforesaid notice and commanding the respondents to forbear from giving any effect thereto.
(2.) For the assessment year 1952-53, the petitioner, Sri Keshtra Mohan Roy, was assessed in the status of an individual by Sri P. C. Guha, the Income-tax Officer, District IV(I), Calcutta, on the 16th September, 1956. The relevant accounting year of the petitioner ended on the 31st October, 1951. In the assessment order, after reciting that Sri L. M. Battacharjee, the authorized pleader of the assessee appeared with cash book, ledger, salary book, voucher file, bank pass book and cash memos as also the audited profit and loss account and the balance-sheet in respect of the petitioner's business, the said Income-tax Officer made various comments on the defects and shortcomings in the assessee's accounts and held that the goods account did not represent the correct state of affairs and made an ad hoc addition of Rs. 25,000 to the goods account, as, in his opinion, the gross profit shown was unreasonably low. By a letter dated the 26th April, 1968, one Sri M. P. Tewari, the then Income-tax Officer, "A" Ward, District IV(I), Calcutta, informed the petitioner that on examination of his assessment records cash credits between the 5th November, 1951, and the 22nd February, 1952, aggregating to Rs. 60,000 were found, and that the Income-tax Officer had reason to believe that these credits represented the petitioner's concealed income which had escaped assessment. Before taking action under Section 147, the Income-tax Officer was affording the petitioner an opportunity of showing cause why proceedings for reassessment should not be started against him. The hearing was fixed on the 10th May, 1968, at 11.30 a.m. It is stated in paragraph 6 of the petition that on receipt of the aforesaid letter, the petitioner's authorized representative, the said Sri L.M. Bhattacharjee, appeared before the respondent No. 1 and had elaborate discussions with him in the course of which it was pointed out that the said cash credits were duly shown to the Income-tax Officer who made the original assessment and on being satisfied as to the explanation rendered, the said Income-tax Officer did not include the said amounts in the income of the petitioner. It is further stated that at the said interview it was pointed out that at the time of the original assessment the audited balance-sheet and the profit and loss account as also the books of account were produced before the assessing Income-tax Officer and the very cash credits which had been referred to in the letter dated the 26th April, 1968, were examined and discussed by the said assessing Income-tax Officer who was completely satisfied that the said cash credits were nothing but genuine hundi loans of the petitioner. The petition has been verified by one Samar Roy, the accountant of the petitioner, who claims to be well acquainted with the facts and circumstances of the case and the statements in paragraph 6 are verified as true to his knowledge. As the aforesaid averments were categorically denied in the affidavit-in-opposition I gave leave to the petitioner to file an affidavit by the said Sri L.M. Bhattacharjee setting out what had happened at the time of the original assessment and also what discussions took place between him and the respondent No. I in the meeting held on the 10th May, 1968. I also gave leave to the department to file an affidavit-in-reply to the aforesaid affidavit, if thought necessary, to be affirmed by the Income-tax Officer making the original assessment. Though this leave was granted on the 19th of February, 1970, no such affidavit has been filed by Sri Bhattacharjee. In the petition there are the usual averments that all the material facts necessary for the purpose of the assessment for the year 1952-53 were fully disclosed to the Income-tax Officer at the time of the original assessment and there was no omission or failure on his part which would entitle the respondent No. 1 to issue the impugned notice under Section 148. It should be mentioned in this connection that the impugned notice under Section 148 was issued on the 26th February, 1969, and as it was issued more than eight years after the end of the relevant assessment year the necessary satisfaction of the Central Board of Revenue was obtained and recorded in the notice as provided in Section 151 of the Income-tax Act, 1961.
(3.) Objections as to the maintainability of the application on the ground that the petition was not properly signed and verified were raised by Mr. Sen, learned advocate for the department, while similar objections as to the reliability of the affidavit-in-opposition affirmed by the present incumbent to the post of the Income-tax Officer "A" Ward, District IV(I), who could have no personal knowledge of the facts relating to the original assessment of the petitioner were also raised by the learned counsel for the petitioner and I shall deal with these objections later on.;