Court upholds jurisdiction of Income-tax Officer to issue notice under section 271; directs opportunity for appellant.

The court held that the Income-tax Officer had jurisdiction to issue the notice under section 271 despite arguments of lack of pending assessment proceedings. The court also found that the notice was not barred by limitation under section 153(1)(c). It was determined that the writ petition challenging the notice was premature as assessment proceedings were pending. The court directed the Assessing Officer to provide the appellant with an opportunity to show cause, ensuring compliance with the law and principles of natural justice. The appeal was disposed of with these directions, without costs.

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Issues involved:
Jurisdiction of Income-tax Officer to issue show cause notice under section 271, Bar of limitation under section 153(1)(c), Prematurity of writ petition challenging the notice.

Jurisdiction of Income-tax Officer to issue show cause notice under section 271:
The appellant argued that the notice issued under section 271 was without jurisdiction as there were no pending assessment proceedings to confer jurisdiction on the Income-tax Officer. It was contended that the conditions precedent for exercising power under section 271 were not satisfied as there were no proceedings for assessment pending after the specified date. The appellant's counsel emphasized that the officer could only conclude concealment of income during assessment proceedings, which were not pending, rendering the notice invalid.

Bar of limitation under section 153(1)(c):
The appellant contended that the notice under section 271 was barred by limitation under section 153(1)(c) as the time limit for assessment had expired. The appellant's counsel argued that the notice was without jurisdiction due to the limitation period having lapsed, and therefore, should be set aside.

Prematurity of writ petition challenging the notice:
The respondent argued that the writ petition was premature as the assessment proceedings were pending, and the bar of limitation did not apply. It was contended that the time limit for assessment was eight years, and the appellant's multiple returns for the same year indicated a potential case for penalty under section 271(1)(c). The respondent's counsel highlighted that the appellant's advocate appeared at a hearing, indicating pending assessment proceedings, and urged that the petition should be dismissed as premature.

The judgment emphasized that the issue was the jurisdiction of the Income-tax Officer to issue the notice, which was challenged on the grounds of the bar of limitation. It was deemed a mixed question of fact and law, requiring further adjudication. The court concluded that interference at that stage would be premature, and the appellant should be given an opportunity to show cause before the Assessing Officer. The direction was given for the Assessing Officer to afford the appellant a hearing, maintain compliance with the law and principles of natural justice, and keep all questions open for consideration. The judgment disposed of the appeal with these directions, without costs.

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