TMI Blog1989 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... by special leave. Both arise out of the same judgment of the Allahabad High Court dated April 22, 1974, in an application under article 226 of the Constitution by the assessee challenging the notices issued under section 148 read with sections 142(1) and 143(2) of the Income-tax Act of 1961, all dated March 7, 1973, relating to the Assessment year 1965-66. The notice under section 148 was on the basis of three cash credit entries dated August 22, 1964, from Meghraj Dulichand, Associated Commercial Organisation P. Ltd. and Laxminarain Atmaram, the first two being for sum of Rs. 30,000 each and the last one for a sum of Rs. 40,000. The High Court ultimately found: "The result is that the notice dated 7th March, 1973, was within jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act was partly valid and partly not because, if the Income-tax Officer proceeded to issue notice under section 148 of the Act for reopening the assessment, he would require the assessee to furnish fresh return and the entire assessment proceeding has to be redone after the assessee furnishes the return. In the present case, along with the notice under section 148 of the Act, the Income-tax Officer did call upon the assessee to furnish a return as required under section 142 of the Act. That notice casts an obligation on the assessee to make a fresh return and therein it was obliged to make a complete disclosure of its income in accordance with law and it was open to the Income-tax Officer to examine not only the three items referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer reaches the conclusion on the material that is before him that there has been a non-disclosure as regards part of the income, profits or gains chargeable to income-tax by the assessee, he is entitled to issue a notice either under clause (a) or (b), as the case may be, under section 22(2) of the Income-tax Act." After extracting section 22(2), the High Court proceeded to say (at page 466) : "What emerges from sub-section (2) of section 22 is that when once an assessee is required to submit a return of his income, he is obliged to disclose the totality of his income. The question that falls to be decided on the language of these two sections is whether after notice is issued under section 34(1)(a) the assessment should be li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to relate to proceedings which commence with publication of notice under section 22(1)'." The view taken by the two High Courts has been supported by this court in V. Jaganmohan Rao v. CIT and CEPT [1970] 75 ITR 373. There, repelling the same argument on behalf of the assessee, this court said (at page 380) : "This argument is not of much avail to the appellant because once proceedings under section 34 are taken to be validly initiated with regard to two-thirds share of the income, the jurisdiction of the Income-tax Officer cannot be confined only to that portion of the income. Section 34 in terms states that once the Income-tax Officer decides to reopen the assessment he could do so within the period prescribed by serving on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt which was adverse to it. Mr. Manchanda contended that in this case, the regular assessment had been made for the assessment year 1965-66 on January 22, 1966. Notice under section 147 of the Act was issued on March 7, 1973, i.e., more than seven years after the assessment had been completed. The three amounts mentioned in the notice under section 148 of the Act were found in the assessee's accounts by the Income-tax Officer when he examined the same in the course of the assessment proceedings. He had called upon the assessee to substantiate the genuineness of the transactions and the assessee had produced material to support the same. The Incometax Officer accepted the documents produced and treated all the three transactions to be genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our years from the end of the relevant assessment year. Admittedly, the notice has been issued beyond a period of four years and, therefore, the notice itself was beyond the time provided under the law. On the facts appearing in the case, the High Court overlooked to consider this aspect of the matter. Since the proceedings before the High Court were under article 226 of the Constitution and not by way of reference under the Act, the jurisdiction of this court is not advisory and confined to the questions referred for opinion. On the facts, we are satisfied that the ends of justice require our intervention and we would accordingly allow the appeal of the assessee by holding that the notice under section 148 of the Act cannot be sustained in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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