O.CHINNAPPA REDDY,J. - (1.) LATE Dr. Munshi Ram Gupta of Rohtak died on May 29, 1954, leaving an estate valued by the Assistant Controller of Estate Duty at Rs. 31,287. The Assistant Controller issued a "no DUTY PAYABLE " certificate on April 29, 1960. In the year 1956, that is, two years after the death of Dr. Munshi Ram, the Income-tax Officer, Rohtak, made some enquiry about a deposit of Rs. 4,00,000 made in the name of Dr. Munshi Ram in the Hindustan Commercial Bank, Jaipur, on November 8, 1947. In that enquiry Arjan Dass, son of Dr. Munshi Ram, produced two letters dated November 8, 1947, and April 2, 1949, said to have been written by one Makhan Lal to Dr. Munshi Ram. These letters suggest that the amount really belonged to Makhan Lal and that Dr. Munshi Ram was no more than a name-lender. The letters were as follows : Bombay 8-11-47 My dear Munshi Ram, We arrived here safely and had a pleasant journey. As mentioned to you at Rohtak, I have since deposited Rs. 4,00,000 (Rupees four lakhs) in the Hindustan Commercial Bank Ltd. , Jaipur, in your name. I am writing this to you for your information so that you may be in a position to furnish the necessary reply to any reference that may hereafter be made to you in this behalf. We are looking forward to the fulfilment of your promise to visit Bombay this month. Please bring Arjan also with you. Yours sincerely, Makhan Lal. Dr. Munshi Ram Gupta, Rohtak. AND Bombay
(2.) -4-49 My dear Munshi Ram, Just a line to inform you that Rs. four lakhs which I had deposited in the fixed deposit account with the Hindustan Commercial Bank Ltd. , Jaipur, in November, 1947, in your name have been duly received back by me with interest thereon. Hope you are quite fit. Yours sincerely, Makhan Lal. Dr. Munshi Ram Gupta, Rohtak. Makhan Lal, the author of the letters, was the Managing Director of Delhi Land and Finance Housing and Construction Company Private Ltd. It appears that at the relevant time Makhan Lal had extensive speculation business and was known as the " Silver King " of Bombay. The revenue started proceedings for reopening the assessments of Makhan Lal as well as Delhi Land and Finance Housing and Construction Company Private Ltd. The proceeding against the company was quashed by the Delhi High Court in a writ application. The fate of the proceedings against Makhan Lal is not known but one may assume that it yielded no fruit to the revenue. On March 29, 1965, after obtaining the prior approval of the Central Board of Direct Taxes, the Income-tax Officer, Rohtak, served a notice under Section 148 of the Income-tax Act, 1961, on Arjan Dass, representing late Dr. Munshi Ram, in respect of the assessment relating to the assessment year 1948-49. The return of income was asked to be submitted before April 28, 1965. On April 22, 1965, Arjan Dass submitted an application praying for extension of time by two months. The Income-tax Officer by an endorsement dated April 26, 1965, made on the application itself granted extension of time by one month. The application and order were as follows : "to The Income-tax Officer, A Ward, Rohtak. Dear Sir, Re : Sh. Arjan Dass Gupta, Legal heir of late Dr. Munshi Ram Gupta, Rohtak, 1948-49/147 Assessment. Under Section 139/148 of the Income-tax Act, 1961, I have to file the return of my income in respect of which I am assessable for the assessment year commencing on the 1st April, 1948, before 28-4-1965. For the reasons given below it is not possible for me to file the return before the said date. It is, therefore, requested that time for furnishing the return may be extended up to 28-6-1965. The return pertains to the income of my late father for the period 1947-48, i. e. , about seventeen years old. It has not been possible for me to collect such an old data and material. I am doing my best but my continuous ill health is a handicap. Hence, two months' extension is requested. Yours faithfully, Signature (Sd) Allowed one month's time Name in capital (ARJAN DASS) Address : C/o, DLF Housing (Sd) I. T. O. Const. Pvt. Ltd. 26-4-65. F-Connaught Place, Dated 22-4-65. New Delhi. " 2. Thereafter, on May 26, 1965, Arjan Dass submitted a return along with which he wrote a letter objecting to the jurisdiction of the Income-tax Officer, Rohtak, on the ground that he, Arjan Dass, was a resident of Delhi. The Income-tax Officer, instead of referring the question of jurisdiction for the determination of the Commissioner of Income-tax under Section 124 (4), proceeded with the assessment. He gave several opportunities to Arjan Dass to adduce evidence. As Arjan Dass failed to adduce evidence, he finally completed the assessment ex parte under Section 144. By his assess ment order, the Income-tax Officer overruled the objection regarding juris diction. He held that the amount of Rs. 4,00,000 deposited on November 8, 1947, in Dr. Munshi Ram's name in the Jaipur Bank was the concealed income of Dr. Munshi Ram. He made the assessment on that basis. An application under Section 146 to reopen the best judgment assessment was also rejected by the Income-tax Officer. Arjan Dass as the heir of Dr. Munshi Ram preferred two appeals to the Appellate Assistant Commissioner, one against the best judgment assessment under Section 144 and the other against the order under Section 146. In the appeal against the assessment, the Appellate Assistant Commissioner overruled the objection to jurisdiction on the ground that it was not raised within the period of 30 days stipulated in the notice under Section 148. However, he allowed the appeal on the merits holding that the amount of Rs. 4,00,000 belonged to Makhan Lal and that it did not represent the income of Dr. Munshi Ram. In arriving at that conclusion the Appellate Assistant Commissioner also placed reliance on certain documents which were produced before him by the appellant. One was the written opinion of the examiner of questioned documents about the genuineness of the signatures of Makhan Lal in the two letters dated November 8, 1947, and April 2, 1949. Another was an affidavit of Shri Ram Rattan, Manager of the Hindustan Commercial Bank Ltd. , New Delhi, to the effect that he gave a letter of introduction to Shri Bhim Sain Jain, brother-in-law of Makhan Lal, in 1947 to enable him to go to Jaipur and open a fixed deposit account in the name of Dr. Munshi Ram Gupta in a sum of Rs. 4,00,000. The third document was the " NO DUTY PAYABLE " certificate, issued by the Assistant Controller of Estate Duty in regard to the estate of late Dr. Munshi Ram Gupta. The other documents were affidavits of Dr. Deepak Bhatia, a fellow civil surgeon, and Shri Siri Krishan Dass, President of the Rohtak City Congress Committee, about the financial status of late Dr. Munshi Ram Gupta.
(3.) THE appeal against the order under Section 146 was dismissed on the ground that the appeal against the assessment had been allowed and it was, therefore, unnecessary to go into the merits of the appeal against the order under Section 146.;