TMI Blog1974 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... peals by certificates from a common judgment of the High Court of Andhra Pradesh at Hyderabad, by which the High Court directed the appellant, Income-tax Officer, Income-tax-cum Wealth-tax Circle II, Hyderabad, to refrain from proceeding against the respondent under section 147(a) of the Income-tax Act, 1961. The appellant had served on the respondent, Nawab Sahib Mir Osman Ali Khan Bahadur, H.E.H. the Nizam of Hyderabad, notices under section 148 of the Income-tax Act, 1961, stating that he had reasons to believe that income of the respondent chargeable to tax for the assessment years 1955-56, 1956-57, 1957-58 and 1958-59, had escaped assessment within the meaning of section 147 of the Act and proposing to reassess the income for the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It appears that on May 1, 1950, August 8, 1950, and December 29, 1950, the respondent had executed three trust deeds, described respectively as family trust, miscellaneous trust and family pocket money trust for the benefit of Mazharunnissa Begum, Laila Begum, Jani Begum and the minor children of the last two. In the aforesaid trust deeds the three ladies were described as wives of the respondent who was also referred to as the father of their minor children. In one of these documents, viz., the family pocket money trust deed, the description of Laila Begum and Jani Begum as wives was preceded by the expression " ladies of position ". Under section 16(3) of the Indian Income-tax Act of 1922, in computing the total income of any individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso admitted that the beneficiaries of the trusts were separately assessed on the income derived from the trusts along with their individual income. On March 13, 1964, the notices under section 148 of the Income-tax Act, 1961, were issued seeking to reopen the assessments under section 147 of the Act. After some correspondence with the Income-tax Officer, the authorised representatives of the respondent, M/s. S. G. Dastgir and Company, Chartered Accountants, filed supplemental returns for the aforesaid four years " without prejudice " to the respondent's right to question the validity of the notices. The supplemental returns merely affirmed the original returns filed by the respondent. By his letter dated April 15, 1964, addressed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct proof and stated that the respondent having acknowledged the three ladies as his wives and their children as his children in the trust deeds executed in 1950 and 1957, all the circumstances mentioned in section 268 were present. The letter concluded by saying that it was established that the ladies and their children were the legal wives and legitimate children of the respondent. The common counter-affidavit affirmed by the Income-tax Officer in answer to the writ petitions was on similar lines to the aforesaid letter. Admittedly, Fern Hill and Race View Trust deeds, executed in 1957, were not produced before the Income-tax Officer when he made the original assessments for the four years in question. In the counter-affidavit it was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years. The fact that the three ladies and their children have been described in these two documents as wives and children of the respondent would have been material if the description were anything new that the Income-tax Officer happened to discover for the first time. The three trust deeds of 1950 also contained the same description of these ladies and their children and the Income-tax Officer accepted the statement made by the respondent's financial adviser, Shri C. B. Taraporewala, seeking to explain why the ladies had been described as wives therein. It is true that the trust deeds of 1957 were not produced at the time of the original assessments, but we do not see what difference production of these two additional documents c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke that presumption at the time. If he should have but did not do so then, he cannot avail of section 147 to correct that mistake. In any event, we are not called upon in this proceeding to record a finding on the question whether in fact the ladies were the respondent's legally wedded wives. We are concerned only with the question whether the condition precedent to the exercise of jurisdiction under section 147 exists in this case ; we have found that it does not. Mr. Manchanda also contended that the High Court exercising jurisdiction under article 226 of the Constitution had no power to investigate whether on the material before him the Income-tax Officer was justified in proceeding under section 147 of the Income-tax Act, 1961. He re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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