R.N.Pyne, J. - (1.) This appeal is directed against the judgment and order dated August 1, 1972, passed by P. K, Banerjee J., whereby his Lordship dismissed the appellant's application made under Article 226 of the Constitution challenging the notice dated August 21, 1970, under Section 148 of the Income-tax Act, 1961, and the summons dated December 29, 1970, under Section 131 of the said Act and for cancellation thereof. For proper appreciation of the controversy involved in this appeal it is necessary to refer briefly to the relevant facts leading to the making of the said application under Article 226 of the Constitution.
(2.) On March 26, 1968, the appellant was assessed under Section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1963-64. From the copy of the assessment order, which is at page 38 of the paper book, it appears that the Income-tax Officer, who made the assessment, disallowed a sum of Rs. 4,06,488 claimed by the appellant on account of loss in P.D.O. transactions because according to the Income-tax Officer they were speculative in nature as there was no delivery of the goods and he added back the said sum to the assessee's income. Thereafter, the appellant preferred an appeal against the said assessment order to the Appellate Assistant Commissioner challenging, inter alia, the disallowance of the said loss of Rs. 4,06,488. Thereafter, the impugned notice dated August 21, 1970, issued under Section 148 of the Act was served on the appellant by the Income-tax Officer, " A " Ward, Jute Circle, Calcutta, on the ground that certain income of the appellant chargeable to tax for the assessment year 1963-64 had escaped assessment within the meaning of Section 147 of the Income-tax Act. A summons dated December 29, 1970 was, thereafter, issued under Section 131 of the Act by the said Income-tax Officer calling upon the appellant to give evidence and produce certain* documents as mentioned in the said summons. Thereafter, certain correspondence passed between the appellant and the revenue (copies whereof will appear from pages 52 to 59 of the paper book) and finally after serving a notice of demand through its solicitor dated 6th March, 1971, the appellant moved this court under Article 226 of the Constitution challenging the notice and the summons as stated herein-above.
(3.) In the above application an affidavit-in-opposition affirmed by one Subha Narasimham, Income-tax Officer, "A" Ward, Jute Circle, on February 15, 1972 was filed on behalf of the respondents. In para. 13 of the said affidavit it was stated by the deponent that :;