Dutt, J. - (1.) This appeal is directed against the judgment of Sabyasachi Mukharji J. whereby his Lordship discharged the rule obtained by the appellant on its application under Article 226 of the Constitution.
(2.) The appellant-company carries on the business of purchase and sale of jute fabrics and is an assessee under the Income-tax Act, 1961. On February 25, 1969, the Income-tax Officer issued a notice uader Section 271/274 of the Income-tax Act, 1961, alleging that in course of the proceedings for the assessment year 1964-65, it appeared to him that the appellant had concealed the particulars of its income or deliberately furnished inaccurate particulars of such income. By the said notice, the appellant was requested to appear before the Income-tax Officer on April 18, 1969, and to show cause why an order imposing penalty should not be made under Section 271 of the Income-tax Act, 1961. On the same day, the Income-tax Officer issued another notice to the appellant under Section 271/274, inter alia, stating therein that the case for levy of penalty under Section 271(1)(c) was being referred by him to the Inspecting Assistant Commissioner under Section 274(2) of the Act. On March 18, 1969, the assessment order for 1964-65 was passed by the Income-tax Officer. At the foot of the said order it was stated that the penalty notice under Section 274 had been issued for default under Section 271(1)(c) of the Income-tax Act, 1961. Thereafter, on February 6, 1971, the Inspecting Assistant Commissioner issued a notice to the appellant calling upon it to show cause why an order imposing a penalty should not be made under Section 271(i)(c) of the Act.
(3.) The appellant filed a writ petition in this court challenging the legality of the said notices and praying for quashing of the same. A rule nisi was issued on the said petition of the appellant. It was contended by the appellant that the Income-tax Officer was not satisfied during the course of the assessment proceedings about the existence of the conditions mentioned in Clause (c) of Sub-section (1) of Section 271. It was further contended that the Income-tax Officer had referred the matter to the Inspecting Assistant Commissioner without recording any reason and without being himself satisfied that the minimum penalty imposable was more than Rs. 1,000. It was submitted that the impugned notices were vague inasmuch as they did not indicate the particulars of income which the appellant had concealed or in respect of which the appellant had deliberately furnished inaccurate particulars. In the absence of the said particulars the appellant could not properly show cause and, therefore, it did not get a reasonable opportunity of being heard as contemplated by Section 274(1) of the Act. Sabyasachi Mukharji J. negatived all the contentions of the appellant and discharged the rule. Hence, this appeal.;