P.N.SINGHAL, J. - (1.) THE petitioner claims to be a Hindu Undivided family represented by Gajanand Pasari as its 'Karta'. It is being asseeseed to income -tax in Rajasthan ever -since its introduction, from the assessment year 1950 51. as the Income -tax Act was made applicable to the State with effect from April 1, 1950. The validity of the retrospective levy was successfully challenged by a writ petition in this Court. The Court judgment is dated January 16, 1951 and is reported in Madangopal Kabra v. Union of India It was however set aside on December 10, 1953 by a judgment of their Lordships of the Supreme Court reported in Union of India v. Madal Gopal Kabra : [1954]25ITR58(SC) .
(2.) THE petitioner has stated that as there was 'no Income -tax or any other law' in the State of Raja upto 31.3.50' requiring it to maintain books of account', it 'did not murrain any books of account upto 31.3.50' It has been stated that the petitioner prepared an inventory of its assets and liabilities on April 1, 1950 and started maintaining 'proper and regular booked of account and documents' with effect from April 1, 1950. It claims that it closed its frist accounting year on March 31, 1951 and found a net pre fit of Rs. 39 328 t0. It therefore voluntarily filed its return of income tax, along with the profit end loss account and the balance sheet which are on record as Annexure. A The assessment was completed by order Annexure B dated April 25, 1952. The petitioner filed the Subsequent returns also, so that its income upto the assessment year 1965 66 bad been assessed to income tax, and the return for the year 1966 67 was pending consideration on the date of the petition The sane was the position regarding the wealth tax, and the petitioner has stand that nothing was outstanding against it. As the petitioner did not file a return for assessment year 1950 -61, Income -tax Officer B Ware. Jaipur, respondent No. 1, initiated action under Section 34(1)(a) of the Income -tax act of 1922 by notice Annexure E dated March 17 1959, requiring the petitioner to hie a return of its income for the period April 1, 1949 in March 31, 1950 within 35 days, on the ground that he bad reason to believe that the income had escaped assessment by reason of the omission or failure to make the return. The petitioner claim that as it bad not maintained books of account for that year, he filed his return on November 23, 1959 declaring an income of Rs 10 000/ - 'on estimate' disclosing 'all primary and relevant facts necessary' for the assessment The Income -tax Officer estimated the petitioner's income at Rs. 50, 000/ to his best judgment, and completed the assessment by order Annexure G dated November 26, 1959, creating a demand for Rs. 4,729.31, which was paid of the petitioner The interne however reduced on second appeal to Rs. 25 O00/ - and the excess tax was refunded in 1962.
(3.) IN the meantime, the Income -tax Officer issued notice Annexure J dated November &, 1959 to the petitioner under Section 28(3) of the Income -tax Act, 1922 for its failure to comply with a notice under Section 22(4) requiring it to produce books of account end documents The petitioner gave explanation K, and the matter was dropped by order Annexure 1 dated July 1, 1960.;