Writ relief and reassessment jurisdiction upheld where the assessee was pursuing appeal and recorded material supported reason to believe.

The writ petition could not be maintained while the petitioner was simultaneously and actively pursuing the statutory appeal, because parallel proceedings should not be encouraged when the appellate remedy was already invoked. The Court also held that the reassessment notice under section 34(1A) was within jurisdiction, since the available material, including unexplained share transactions and other suspicious circumstances, was sufficient to support a belief that income had escaped assessment. The Appellate Assistant Commissioner's remand under section 31(2) was upheld as a limited inquiry order, not a fresh reassessment or an impermissible final disposal of the appeal. The challenge to the reassessment proceedings therefore failed.

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Issues: (i) Whether the petitioner could maintain the writ petition under article 226 while actively pursuing an appeal before the Appellate Assistant Commissioner; (ii) Whether the notice and reassessment action under section 34(1A) were without jurisdiction for want of reason to believe, and whether the Appellate Assistant Commissioner acted within his powers in remanding the matter under section 31(2).

Issue (i): Whether the petitioner could maintain the writ petition under article 226 while actively pursuing an appeal before the Appellate Assistant Commissioner.

Analysis: The availability of an alternative remedy is not, by itself, an absolute bar to writ relief in cases of jurisdictional error or breach of natural justice. However, where the same party has already invoked and is actively pursuing the statutory appellate remedy, the Court should not permit simultaneous parallel proceedings. The petitioner had chosen to proceed with the appeal and expressly intended to continue it to its conclusion.

Conclusion: The writ petition was not maintainable while the statutory appeal remained pending and was being actively pursued; this issue was decided against the petitioner.

Issue (ii): Whether the notice and reassessment action under section 34(1A) were without jurisdiction for want of reason to believe, and whether the Appellate Assistant Commissioner acted within his powers in remanding the matter under section 31(2).

Analysis: The material before the income-tax authorities, including the assessment orders and the appellate order, disclosed unexplained share transactions, secret profits, and other suspicious circumstances sufficient to found the belief that income had escaped assessment. The Court held that the statutory precondition of reason to believe was satisfied. As to the appellate order, the remand was made under section 31(2) for further inquiry; it was not an order setting aside the assessment and directing a fresh reassessment under section 31(3b), and no part of the appeal was finally disposed of in an impermissible manner.

Conclusion: The reassessment notices were within jurisdiction and the remand order was valid; this issue was decided against the petitioner.

Final Conclusion: The challenge to the reassessment proceedings failed, and the Court declined to interfere with the impugned orders.

Ratio Decidendi: A writ court may decline relief where the petitioner is simultaneously and actively pursuing an adequate statutory appellate remedy, and a reassessment under section 34(1A) is sustainable when the recorded materials objectively justify the belief that income has escaped assessment; an appellate remand under section 31(2) remains a limited inquiry order and is not a fresh reassessment order unless the assessment is expressly set aside.

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