M G INDUSTRIES Vs. INCOME TAX OFFICER, B WARD, JAMMU

JUDGEMENT

(1.) THIS is a writ petition preferred on behalf of Messers MG Industries against the Income -tax Officer B Ward Jammu with the following allegations

(2.) THE petitioner is a business concern carrying on the business of manufacturing and sale of stainless steel articles. The present partners of the concern being P. K. Bhadwar, O. P. Mehta and V. P. Mehta. The petitioner filed a return of loss in respect of the assessment year 1961 -62 The respondent by means of his order diced 26 -3 -66 did not accept the less return presented by the petitioner and assessed the income of the petitioner for the year in question levying a tax of Rs 1, 18072/22 After this order was passed by the respondent, a demand notice under S 156 of the Income -tax Act of 1961 was issued against the petitioner. For default three more notices under this very Act under Ss 273. 271 1. and 2711.c. were also issued against the petitioner The petitioner applied for stay of proceedings for imposition of the penalty as well as for the realization of the income -tax demand on 5 -4 -66. The respondent rejected that request of the petitioner by his order dated 12 -4 -66. The petitioner applied to the Inspecting Asstt. Commr. of Income -tax Jammu on 12 -4 -66 requesting him to grant the petitioner the reliefs refused by the respondent vide his order dated 12 -4 -66, but even that officer did not grant the petitioner any relief. The assessment order, according to the petitioner, is bad because the respondent had no jurisdiction to deal with a case where for the first time was assessable at more than Rs. 20,000, as the Income -tax Commr. Patials had determined the jurisdiction of the various income -tax officers in Jammu and the case of the present petitioner could not be heard by the respondent. The respondent had acted in breach of the rules of natural justice in holding inquiries at the back of the petitioner. The petitioner had filed an appeal on 16 -4 -66 against the order of the respondent dated 26 -3 -66 before the Appellate Asstt. Commr. of Jammu. The sun demanded from the petitioner being a very huge one, and as no stay had been granted by the Income -tax authority in favour of the petitioner, he was compelled to move this court by means of a writ petition. The respondent was further incompetent in law to issue a notice for default under S. 271

(3.) WHEN the writ was presented, an application for stay of the op ration of the order of the respondent was made by the petitioner. The court on admitting the writ ordered that there could be a stay for the realization of the amount of Rs. 1,180000 on the petitioners furnishing substantial security to the satisfaction of the District Judge Jammu. According to the respondent even this has not been done by the petitioner. On the other hand the petitioner filed an application in this court on 13 -8 -66 praying for the modification of the order for demanding security, and requesting for pledge of the property situate at the Industrial Estate Gandhi nagar Jammu instead of furnishing any other security.