Sadhan Kumar Gupta, J. - (1.) All the mandamus appeals were heard analogously as the facts and law involved in those appeals are the same and almost identical. Those three mandamus appeals arose out of the writ applications bearing No. C. O. 4959(W) of 1989, CO. 4960(W) of 1989 and C.O. 4961 (W) of 1989. By a single judgment dated August 8, 2002 (see [2002] 258 ITR 160), the learned single judge of this court, disposed of those three writ petitions against the appellants. Being aggrieved and dissatisfied with the said order of the learned single judge, the present appeals have been preferred by the appellant.
(2.) The writ applications were instituted by the appellant challenging the notice issued under Section 148 of the Income-tax Act, 1961, for the purpose of reopening the assessment of the company for the years 1981-82, 1980-81 and for the assessment year 1973-74. By issuing the said notice, the Income-tax Officer proposed to reopen the assessment of the appellant-company for those three years. The Income-tax Officer issued those notices under Section 148 of the Income-tax Act on grounds which are identical in nature. The said notice under Section 148 of the Act was issued on the ground as follows : "1. On the basis of information available in (a) the auditors' observations in the annual reports of Peerless for 1986 (assessment year 1987-88) and 1987-88 (15 months ending on March 31, 1988, relevant to the assessment year 1988-89) ; (b) the Supreme Court's observations in the case of RBI v. Peerless General Finance and Investment Co. Ltd. [1987] 61 Comp Cas 663 ; and (c) the report of the Reserve Bank of India on inspection of the books of Peerless conducted in 1979, the following facts of accounting of income and liabilities of the assessee-company came to light. (1) The Social Welfare Scheme Fund is in excess of the total liability of the company towards the certificate holders. (2) The company has been retaining in the fund amounts forfeited on surrender of certificates and liabilities already provided thereon on accrual basis. Amounts in respect of unclaimed matured certificates continue to remain in the fund even after maturity. Amounts in respect of lapsed certificates also continue to remain in the fund. (3) The generous distribution of commission among the agents out of the first year's subscription and the class of investors tapped by such agents have resulted in large scale dropouts by the investors after the first year. (4) There was large scale lapsation of certificates varying between 34.26 per cent, and 59.71 per cent., during the first three years, the forfeiture range. 2. While checking the income accounting for the previous year relevant to the assessment year 1985-86, it was found that the assessee has been furnishing incorrect computation of income on the basis of wrong assumption and inflated generalisation as under : (i) The provision for refund of subscription at a fixed percentage of the first year's subscription was in respect of pure contingent liability. The quantification of such liability was on the basis of flawed actuarial certificate. (ii) The provision of interest and bonus accrued at a fixed percentage of the balance in the Social Welfare Scheme Fund on accrual basis was incorrect even on actuarial basis, which the assessee was supposed to be following. 3. On a check of the abovementioned facts of the accounting of income and expenditure, it emerged that income exceeding Rs. 50,000 has escaped assessment in the following respects as a result of inadequate and incorrect statements, misleading actuarial certificate, wrong basis of calculation and suppression of relevant facts : (a) Income from forfeiture of lapsed certificates. (b) Profit under Section 41(1) of the Income-tax Act as a result of cessation of liability already claimed as 'interest and bonus accrued.' (c) Excess deduction claimed under the head, 'Interest and bonus accrued', at a fixed percentage of the Social Welfare Scheme Fund on the ground that the fund was in excess of the requirement. (d) Excess deduction claimed under the head, 'Interest and bonus accrued', at a fixed percentage of the balance in the said fund on the ground that such percentage was in excess of the amount allowable on accrual basis. (e) Deduction claimed under the head, 'Provision for refund of subscription' on the strength of wrong actuarial advice. 4. In the circumstances stated above, I have reason to believe that, by reason of the omission and failure on the part of the assessee, the Peerless General Finance and Investment Co. Ltd., to disclose fully and truly all material facts necessary for its assessment for the assessment year 1981-82, income exceeding Rs. 50,000 has escaped assessment for that year."
(3.) So it appears from the said notice that the Income-tax Officer preferred to issue the same on the basis of the information available to him and those are : (a) Auditor's observation in the annual reports of Peerless for the assessment years 1987-88 and 1988-89 ; (b) The Supreme Court's observation in the case reported in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. [1987] 61 Comp Cas 663 ; and (c) The report of the Reserve Bank of India on inspection of the books of Peerless conducted in 1979.;