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1968 (9) TMI 4 - SC - Income TaxWhether the notice under section 226(3) of the Income-tax Act, 1961, hereinafter called the " new Act ", bearing No. 770-d/60-61, 61-62, 62-63 and 63-64 issued by the III Income-tax Officer to M/s. Rajarajeswari Motor Service, Mangalore, produced as exhibit VIII with the writ petition was invalid and inoperative in respect of the following items of tax and penalty included therein? Held that:- The Income-tax Officer had authority to issue the notices under section 156 and section 226(3) of the new Act with respect to the liability of the respondent under the old Act. The High Court was, therefore, in error in holding that the impugned notice was inoperative in regard to the amount of ₹ 485.55 for the assessment year 1961-62. There is the additional circumstance that the assessments of tax and penalty have been made against the respondent and demand notices have also been issued under section 156 of the new Act. It is, therefore, not possible to argue that the amount of tax and penalty for the assessment years 1962-63 and 1963-64 were not " due by the assessee " on April 23, 1965, when the notice under section 226(3) of the new Act was issued. We are accordingly of the opinion that Mr. Srinivasan is unable to make good his argument on this aspect of the case. It follows, therefore, that the impugned notice dated April 23, 1965, was validly issued as regards items 4 and 5, viz., penalty for the assessment year 1962-63, i.e., ₹ 1,890, and tax for the assessment year 1963-64, i.e., ₹ 64,307.90. In the absence of specific particulars by the respondent in his writ petition, it is not open to the High Court to go into the question whether the Income-tax Officer has arbitrarily exercised his discretion. In the result we hold that the respondent is unable to substantiate his case that the impugned notice is in any way defective with regard to item No. 1 i.e., tax for the assessment year 1960-61 amounting to ₹ 7,056.15.
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