TMI Blog1967 (4) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... r, relevant to the assessment year 1959-60, it is said that a partial partition of the business carried on by the petitioner was effected, but the residential house property and the dal mill at Kalibari were left intact in the ownership of the petitioner. The business so far carried on by the petitioner was apparently taken over by a partnership firm, Messrs. Jumna Lal Gopal Rai. The income from the business for the previous year relevant to the assessment year 1960-61 was assessed in the hands of the partnership firm, which was granted registration under section 26A of the Indian Income-tax Act, 1922. Similar assessments were made on the partnership firm for the assessment years 1961-62 to 1964-65. For the assessment year 1964-65, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 148. Accordingly, the Income-tax Officer issued a notice dated February 24, 1966, under section 148 to the petitioner stating that he had reason to believe that the petitioner's income chargeable to tax for the assessment year 1960-61 had escaped assessment, that he proposed to reassess the income for that assessment year, and he called upon the petitioner to furnish a return of its income assessable for that year. It was also stated that the notice was being issued after obtaining the satisfaction of the Commissioner. Thereafter, assessment proceedings pursuant to that notice were commenced by the Income-tax Officer. The petitioner applies for certiorari against the notice under section 148 and for prohibition against further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the expiry of eight years from the end of the relevant assessment year, and in a case where notice has to be issued after the expiry of four years from the end of the relevant assessment year, unless the Commissioner is satisfied that it is a fit case for issue of such notice. But whether it is the Board or the Commissioner, the satisfaction must proceed on the reasons recorded by the Income-tax Officer. It is clear that the Income-tax Officer is bound to record the reasons for issuing a notice under section 148. The requirement is mandatory. Before the assessment can be had, the Income-tax Officer must issue a notice under section 148 and before that notice can be issued, he must record his reasons for doing so and must also upon tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclose fully and truly all material facts necessary for such assessment, there is a valid case for invoking the jurisdiction conferred by clause (a) of section 147. If, on the contrary, the reasons recorded by the Income-tax Officer cannot possibly lead to such conclusion, the proceedings initiated by the Income-tax Officer by reference, to that clause must be struck down as invalid. In the instant case, the Income-tax Officer recorded his reasons. Those reasons are set out in the supplementary affidavit filed by the petitioner. How, and in what circumstances he succeeded in coming to know of the reasons is not a matter for consideration for the purposes of the case before me. What is relevant is the fact that they are the reasons recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Officer, was the partnership firm and not the Hindu undivided family. The claim to deduction on account of the rent paid in respect of the hire of the dal mill was made by the partnership firm and the successive appeals filed thereafter were preferred by that firm. The Hindu undivided family was not a party to those proceedings. Analysed, the reasons recorded by the Income-tax Officer amount to this, that inasmuch as the case of the partnership firm before the income-tax authorities and the Appellate Tribunal was that some of the assets of the business, namely, the building and the machinery, had not been partitioned but continued to belong to the Hindu undivided family and that as such a partial partition was not permissible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impression conveyed all along by the petitioner was that all the assets had been partitioned. That is a case completely inconsistent with the reasons recorded by the Income-tax Officer. It is one thing to say that the admitted case is that all the assets of the business were not partitioned and therefore in law there was no partition of the business, and quite another thing to say that the fact had been concealed that some of the business assets had not suffered partition. As I have pointed out above, the Income-tax Officer must be confined to the reasons given by him to support the validity of his action under clause (a) of section 147. In my judgment, the proceedings taken by the Income-tax Officer commencing with the notice dated Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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