The turnover so assessed was reduced by the Appellate Assistant Commissioner and further reduced by the appellate Tribunal.
A learned single Judge of the High Court dismissed the writ petition and his order was affirmed in appeal by a Division Bench The appeal to this Court is by the assessee on certificate granted by the High Court.
It appears that the Income tax Officer had written a detailed order in making his best judgment assessment.
These drafts represented undisclosed income of the firm.
The justification for taking action under Section 147 and 148 of the Income tax Act, 1961 as stated by the Division Bench of the High Court is The firm utilised certain drafts for making purchases at Madras and Calcutta.
As he is unable to tell to whom other drafts sent by him relate inspite of specific opportunities given to him, the obvious inference is that moneys of the drafts are that of the firm with which he is companynected.
On March 31, 1965 the Income tax Officer issued a numberice under Section 143 of the Income tax Act, 1961 stating that he had reasons to believe that income chargeable in respect of the assessment year 1956 57 had escaped assessment with n the meaning of Section 147 of the Act and directing the assessee to file a return as he proposed to reassess the income for the said assessment year.
This aspect of the matter was number companysidered at the time of the original assessment.
Referring to the statement of one of the partners, Shri Om Prakash, the Income Tax Officer observed in his order He has said that the drafts which were sent by him relating to M s. Gemini Leather Stores were entered in the books of the firm while other drafts which he has made would be of others whose name he does number remember.
This was also he view taken by the Division Bench.
The assessee filed a writ petition before the High Court at Allahabad challenging the validity of the numberice dated March 31, 1965 on the ground that the Income tax Officer had numberjurisdiction to issue the numberice.
The law on the point has been settled by this Court in Calcutta Discount Co. Ltd. v. Income Tax Officer Companies District I, Calcutta and another 41 I.T.R. 191.
It is, therefore, proposed to tackle that income for purposes of reassessment.
It is proposed to take this income into companysideration for purposes of re assessment.
The learned single Judge took the view that the Income tax Officer did number apply his mind to the question as to whether the amounts invested in the purchase of the drafts companyld be treated as part of the total income of the assessee, and as the assessee did number disclose the source of these amounts which were number recorded in the account books produced by the assessee, all the companyditions for invoking the jurisdiction under Section 147 a were present.
Having found out all about the drafts which were number mentioned in the assessees books of account, the Income tax Officer gave the partners of the firm opportunity to explain the drafts.
The amounts, for which drafts were purchased by the firm, were number recorded in the disclosed account of the firm.
The Income Tax Officer did number accept the return filed by the assessee and the books of account produced by it and made a best judgment assessment.
C. Gupta, J. The appellant, a partnership firm, Was assessed to income tax for the assessment year 1956 57 on a turnover of Rupees fifteen lacs by the Income tax Officer by his order dated 22 1 1958.
