1973 (2) TMI 2

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....cision in this case is whether on the facts and circumstances of the case the proceedings which were commenced by a notice under section 34(1)(b) could have been converted into a proceeding under section 34(1)(a) by the Income-tax Appellate Tribunal. In order to decide this question it is necessary to refer to the material facts. For the assessment year in question the assessee was assessed without any objection. Thereafter, the Income-tax Officer issued a notice to it under section 34 of the Act without mentioning therein whether he was taking action under section 34(1)(a) or 34(1)(b). The assessee filed its objection to the notice in question. It pleaded that it had supplied to the Income-tax Officer correct information and there was no j....

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....1) Whether the reopening of the case by the Income-tax Officer by the issue of a notice under section 34 of the Indian Income-tax Act fell within the ambit of section 34(1)(a) of the Act or under section 34(1)(b) of the Act ? (2) Whether the service of the notice under section 34 of the Indian Income-tax Act by affixture on the residential house of the assessee was legal and proper ? (3) Whether the amount of Rs. 62,500 was liable to tax under section 4(1)(b)(iii) of the Indian Income-tax Act ? " The High Court, answering the first question, came to the conclusion that the notice in question was a valid notice and it was a notice under section 34(1)(a). It answered the second question in the negative and in favour of the assessee. ....

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....e the entire proceedings. As held by this court in Sheo Nath Singh v. Appellate Assistant Commissioner of Income-tax, the Income-tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied, does not exist or is not material or relevant to the belief required by this section. It is true that the courts will not go into the sufficiency of the reasons which persuaded the Income-tax Officer to initiate proceedings under section 34(1)(a) of the Act but the Courts will examine the relevancy of the reasons which persuaded, the Income-tax Officer to take proceedings under section 34(1) (a). The formation of the required belief is not the only requirement. The Income-tax Officer is further required....