TMI Blog1966 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... OF 1965 - - - Dated:- 27-9-1966 - Judge(s) : V. RAMASWAMY., J. C. SHAH., V. BHARGAVA JUDGMENT The judgment of the court was delivered by RAMASWAMI J.--The appellant was carrying on business in jewellery, copper-wire and money-lending. The books of accounts of the appellant were closed on the 30th of June every year. For the assessment year 1951-52 (for which the previous year ended on 30th June, 1950), the appellant did not comply with the notice issued under section 22(2) or section 22(4) of the Income-tax Act. No return was filed by the appellant. The assessment was completed by the Income-tax Officer on such material as was available on the 23rd February, 1955, and the income was assessed at Rs. 36,068. Subsequently, while maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings for the assessment year 1951-52 under the provisions of section 34(1)(a) of the Indian Income-tax Act of 1922 ? " The High Court answered the question against the appellant holding that the Income-tax Officer had jurisdiction to initiate proceedings against the appellant under section 34(1)(a) of the Act for the assessment year 1951-52. This appeal is brought by special leave against the judgment of the High Court dated the 24th July, 1963. On behalf of the appellant Mr. Gopalakrishnan contended in the first place that the reasons which induced the Income-tax Officer to initiate the proceedings under section 34 were justiciable. It was submitted that those reasons, should have been communicated by the Income-tax Officer to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment, that would be sufficient to give jurisdiction to the Income-tax Officer to issue the notice under section 34. Whether these grounds are adequate or not is not a matter for the court to investigate. In other words, the sufficiency of the grounds which induced the Income-tax Officer to act is not a justiciable issue. It is of course open for the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non-disclosure. In other words, the existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. Again the expression " reason to believe " in section 34 of the Income-tax Act does not mean a purely subjective satisfaction on the part of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made by the appellant to the Income-tax Officer, but the Income-tax Officer declined to disclose the reasons. In our opinion, the argument of the appellant on this point is misconceived. The proceedings for assessment or reassessment under section 34(1)(a) of the Income-tax Act start with the issue of a notice and it is only after the service of the notice that the assessee, whose income is sought to be assessed or reassessed, becomes a party to those proceedings. The earlier stage of the proceeding for recording the reasons of the Income-tax Officer and for obtaining the sanction of the Commissioner are administrative in character and are not quasi-judicial. The scheme of section 34 of the Act is that, if the conditions of the main sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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