- (1.) IN this application the petitioner seeks appropriate writs and orders directing the respondents, their servants and agents to recall show-cause notice dated May 13, 1964, and to forbear from giving effect to the same.
(2.) THE petitioner is a public company incorporated under the Indian Companies Act, 1956, its registered office being at Birlanagar, Gwalior, Madhya Pradesh. The petitioner submitted its return of income for the asst. yr. 1955-56 and this income was duly assessed and an order was made on January 31, 1956, by the ITO "A" Ward, Jaipur. Thereafter, the ITO wrote several letters to the petitioner requesting the petitioner to meet him in connection with proceedings under s. 23A of the IT Act, 1922 (hereinafter referred to as the Act). The petitioner contended that it was a company in which the public was substantially interested, and for that reason s. 23A was not attracted. On April 21, 1959, the Central Board of Revenue made an order transferring the petitioner's case to the respondent No. 1. By an order dated February 25, 1960, under s. 23(3) r/w s. 34(1)(b) of the Act, the ITO included certain items of income not previously included in the original assessment. An appeal was preferred against the said order before the AAC, but this appeal was dismissed on September 20, 1960. Thereafter, by another order dated September 22, 1960, made under s. 23(3) r/w s. 34(1)(b) of the Act, certain further items of income were included in the assessment of the petitioner. By letters dated June 27, 1962, and December 14, 1962, the respondent No. 1 requested the petitioner to submit certain particulars regarding proceedings under s. 23A of the Act. These particulars were furnished by the petitioner. By a letter dated February 15, 1963, the petitioner, through its advocate, contended that no order under s. 23A of the Act could be made in respect of the asst. yr. 1955-56, having regard to the provisions in s. 34 (3) of the Act.
(3.) THEREAFTER , a show-cause notice dated May 13, 1964, was issued by the respondent No. 1 whereby the petitioner was informed that upon scrutiny of the record for the year of account, relevant for the asst. yr. 1955-56, it was noticed that the petitioner had not declared any dividend in spite of available surplus. The petitioner was further informed by this notice that the respondent No. 1 proposed to apply the provisions of s. 23A of the Act to the petitioner, and called upon the petitioner to show cause within a week why such an order should not be made. At a hearing on June 24, 1964, the petitioner's representative contended before the respondent No.1 that the latter had no jurisdiction to pass any order under s. 23A, in view of the provisions of s. 34(3) of the Act. The respondent No. 1, however, threatened to proceed in pursuance of the said show-cause notice and thereupon the petitioner obtained this rule nisi.;