TMI Blog1972 (12) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... petitions filed by the Hindu undivided family, M/s. Rai Singh Deb Singh Bist, and its karta, Thakur Mohan Singh Bist, challenging the validity of certain notices issued under section 34(1)(a) of the Indian Income-tax Act, 1922 (in short, " the Act ") by the Income-tax Officer, Central Circle I, Delhi. The High Court of Delhi allowed those writ petitions and quashed the impugned notices. Hence these appeals. The assessee in these cases is a Hindu undivided family. The assessment years with which we are concerned in 'these appeals range from 1942-43 to 1953-54. The assessee filed its returns for these years in due time. The assessee's account books showed considerable cash credits in the name of the brothers-in-law of the second responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears in question, income, profits or gains chargeable to income-tax have escaped assessment during those years. Further, before doing so, he must have recorded his reasons for acting under section 34(1)(a) and the Central Board of Revenue must have been satisfied on those reasons that it is a fit case for the issue of the notice. The recording of the reasons in support of the belief formed by the Income tax Officer and the satisfaction of the Central Board of Revenue on the basis of the reasons recorded by the Income-tax Officer that it is a fit case for issue of notice under section 34(1)(a) are extremely important circumstances to find out whether the Income-tax Officer bad jurisdiction to proceed under section 34(1)(a). In Calcutta Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is not sufficient. This court also took the view that the Central Board of Revenue before reaching its satisfaction that the case was a fit one to be proceeded under section 34(1)(a) must have examined the reasons given by the Income-tax Officer and arrived at its own conclusion ; and that it is not permissible for it to act mechanically. The same view was again taken by this court in Sheo Nath Singh, v. Appellate Assistant Commissioner of Income-tax. In the instant case, the assessee alleged in his writ petitions that there was no relevant material before the Income-tax Officer before he issued notices under section 34(1)(a) on the basis of which he could have had reason to believe that any income had escaped assessment. In the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s said on behalf of the department was that some time in the year 1955, the assessee sold large tracts of land to two of his brothers in-law for a sum of Rs. 47 lakhs but in reality that property was not worth that amount. We do not know whether there was any basis for this conclusion. As seen earlier the cash credit entries were brought to the notice of the Income-tax Officer before the relevant assessment orders were passed. He had an occasion to investigate into them. It is not necessary to go into this question mere deeply in view of the fact that there is nothing to show that there was any relevant material before the Income-tax Officer before he issued the notices under section 34(1)(a) to have reason to believe that as a result of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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