MADANLAL JAJODIA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS application and four other applications, namely Matters Nos. 190 of 1962, 191 of 1962, 192 of 1962, and 193 of 1962, involve the same facts and the same points of law. They have been heard simultaneously and will be disposed of by this judgment. The facts are briefly as follows :

(2.) THERE is a partnership firm carried on under the name and style of MadanIal Sohanlal " at No. 207, Chittaranjan Avenue, in the town of Calcutta, the partners whereof are Madaulal Jajodia, Sohanlal Jajodia, Sampatlal Jajodia and Pannalal Jajodia. Each one of them has made a separate application and that is why these five applications have come into existence. In or about April, 1947, an Act called the Taxation on Income (Investigation Commission) Act of 1947, being Act 30 of 1947, commonly known as the IT Investigation Commission Act, was promulgated for the purpose of making suitable provisions to investigate and ascertain the actual incidence of taxation on income disclosed or undisclosed for a period covering the accounting years from 1st April, 1939, to 31st March, 1947, the corresponding assessment years being 1940-41 to 1947,48. On the 15th May, 1948, the petitioner was served with a notice by the Income-tax Investigation Commission constituted under the provisions of the IT (Investigation Commission) Act, whereby the petitioner was informed that his case has been referred to the said Commission for investigation and report under s. 5(i) of the said Act. The petitioner was asked to furnish the Commission with a statement of his total wealth and assets as they stood between the accounting years ending 15th April, 1940, and 30th March, 1947, the assessment years being 1940-41 to 1947-48. The petitioner filed a statement and the investigation and enquiry continued up to the year 1951, when a report was made some time in. November, 1951, after considering certain terms of settlement proposed by the petitioner. It is stated in the petition that the Government of India accepted the recommendation of the Investigation Commission and notice was served under s. 29 of the IT Act on or about the 9th February, 1952, demanding the payment of the. sum of Rs. 14,32,541, on account of payment of tax and a sum of Rs. 50,000 on account of penalty. This was a demand jointly payable by all the partners. On the 28th May, 1954, the Supreme Court, by its decision in Suraj Mall Mohla and Co. vs. A. V. Visvanatha Sastri (1954) 26 ITR 1 (SC), declared sub-s. (4) of s. 5 of the Taxation on Income (Investigation Commission) Act, 1947, as void and unenforceable, as being violative of Art. 14 of the Constitution. On the 17th July, 1954, s. 34 of the IT Act, 1922, was amended by the introduction of s. 34(1A).

(3.) PROVIDED further that no such notice shall be issued after the 3ist day of March., 1956. " It is necessary to make a passing mention of sub-s. (1B) of s. 34. It provides that an assessee, upon whom a notice has been issued under cl. (a) of sub-s. (1) or under sub-s. (1A) for any of the years ending on the 31st day of March of the years 1941 to 1948 inclusive, may apply to the Central Board of Revenue at any time within six months from the receipt of such notice or before the assessment or reassessment is made. whichever is earlier, to have the matter relating to his assessment settled, and the Central Board of Revenue may with the approval of the Central Government accept such settlement.