Sabyasachi Mukharji, J. - (1.) The subject-matters of challenge in the writ application out of which this appeal arises were the notices under Section 34(1)(a) of the Indian Income-tax Act, 1922, for the assessment years 1940-41 to 1950-51, 1952-53 and 1953-54.
(2.) It is the case of the revenue that the petitioner-respondent was assessed to income-tax for the assessment year 1939-40 on the basis of the return filed by him. For the assessment years 1941-42 to 1943-44, the respondent did not file any return and the assessments for the said years were made at nil under Section 23(4) of the Indian Income-tax Act, 1922. For the assessment year 1944-45 and subsequent years up to 1948-49, no action had been taken for the respondent's assessment under the Act. For the assessment year 1949-50, the respondent's assessment file was closed on the basis of the report submitted by an inspector of income-tax regarding the financial position of the respondent and, thereafter, no further action was taken for the assessment of the respondent up to the assessment year 1953-54. But it appeared to the revenue that the income of the respondent had escaped assessment due to the failure and/or omission on the part of the respondent to disclose fully or truly all relevant and material facts. It appeared to the income-tax department that the respondent had bank accounts in his own name in the National & Grind-lays Bank and French Bank. He had also bank accounts in the names of Eastern Commercial Corporation, Bengal Industrial Corporation, West Bengal Industrial Corporation and many other names. From these accounts it appeared that the respondent had been handling huge amounts of cash every day. In one such bank account, he had deposited a sum of Rs. 3,87,959 on a single day, namely, the 25th January, 1948. On several other dates he had deposited substantial amounts, as mentioned in paragraph 18 of the affidavit-in-opposition filed on behalf of the revenue. It further appeared that the respondent during the relevant periods had withdrawn substantial amounts from the bank accounts and he had regularly made large monthly payments to night clubs like Golden Slipper, Firpos, etc. On enquiry it was ascertained that there were three cars registered in his name including a Cadillac which he was stated to have purchased in 1952 for the sum of Rs. 50,000. From the payments made by the respondent to travel agents for the purchase of travellers cheques, it was also apparent that he had been touring abroad from time to time. From these facts the revenue formed the belief that the income of the respondent had escaped assessment and, accordingly, the notices were issued.
(3.) The respondent contended in his writ application that the said notices had not been served upon the respondent. For the assessment years 1952-53 and 1954-55, the notices under Section 34(l)(a) of the Act were served by registered post on 5th April, 1961, and on 25th January, 1961, respectively. In view of the fact that such service by registered post had not been specifically denied by the respondent in his affidavit-in-reply, D. Basu J., before whom this writ application came up for hearing, accepted the position that the respondent had been served with the notices for these years. In this appeal, no grievance was made about that finding of the learned trial judge. The learned trial judge, however, was of the view that notices for the assessment years 1940-41 to 1950-51, which were alleged to have been served by affixation, had not been properly served. He, accordingly, held that notices for the aforesaid period had not been served in accordance with law and, therefore, he made the rule nisi absolute to the extent that it challenged the service of the notices for the aforesaid years.;