- (1.) AUTO and Metal Engineer, Faridabad, the assessee, was a partnership concern consisting of Smt. Sunanda Rani Jain having 2/3rds share and Smt. Karuna Rani Jain having 1/3 share. Both are sisters, V. K. Jain, husband of Sunanda Rani Jain, was the general manager of the firm. On April 24, 1971, the business premises of the firm arid the residential premises of the partners were searched by the officers of the Income-tax Department and records and documents were seized. The partners and the general manager filed separate writ petitions in the Delhi High Court to impugn the raid and seizure of books and documents and initially obtained an order staying final decision by the income-tax authorities on the basis of information gathered during the raid. The Income-tax Department filed an application for clarification of the stay order as to whether the income-tax authorities were permitted to use the information derived from the seized records in respect of the assessment year 1970-71 and onwards. The Delhi High Court, on January 24, 1973, passed the following order on the application : "further proceedings for assessment for the year 1970-71 onwards are stayed pending disposal of the application. "
(2.) THE aforesaid order was confirmed on February 12, 1973.
(3.) ON March 1, 1973, the Income-tax Department filed another application before the Delhi High Court for clarification as to whether the stay orders operated in regard to the assessments of the partners or operated in favour of the assessee-firm also. In para 4 of the application, it was specifically mentioned that the stay order had been granted by that court staying further proceedings for the year 1970-71 and onwards. On March 5, 1973, the following order was passed ; "this is an application seeking clarification of my order dated November 23, 1971. The clarification sought is whether the stay order given by me would cover only the case of the firm or the partners or both. The stay will naturally operate for the assessment of the firm as well as the partners till the disposal of the writ petition. I order accordingly. ";