AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1974 (10) TMI 1
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....ing against the respondent under section 147(a) of the Income-tax Act, 1961. The appellant had served on the respondent, Nawab Sahib Mir Osman Ali Khan Bahadur, H.E.H. the Nizam of Hyderabad, notices under section 148 of the Income-tax Act, 1961, stating that he had reasons to believe that income of the respondent chargeable to tax for the assessment years 1955-56, 1956-57, 1957-58 and 1958-59, had escaped assessment within the meaning of section 147 of the Act and proposing to reassess the income for the said assessment years. The respondent challenged the validity of the proceedings under section 147 sought to be initiated by filing four writ petitions in the High Court of Andhra Pradesh at Hyderabad. The High Court by the impugned judgme....
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....runnissa Begum, Laila Begum, Jani Begum and the minor children of the last two. In the aforesaid trust deeds the three ladies were described as wives of the respondent who was also referred to as the father of their minor children. In one of these documents, viz., the family pocket money trust deed, the description of Laila Begum and Jani Begum as wives was preceded by the expression " ladies of position ". Under section 16(3) of the Indian Income-tax Act of 1922, in computing the total income of any individual for the purposes of assessment, the income of the wife or minor child of the assessee arising from assets transferred by the husband to the wife or the minor child otherwise than for adequate consideration was to be included. There i....
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.... issued seeking to reopen the assessments under section 147 of the Act. After some correspondence with the Income-tax Officer, the authorised representatives of the respondent, M/s. S. G. Dastgir and Company, Chartered Accountants, filed supplemental returns for the aforesaid four years " without prejudice " to the respondent's right to question the validity of the notices. The supplemental returns merely affirmed the original returns filed by the respondent. By his letter dated April 15, 1964, addressed to M/s. Dastgir and Company, the Income-tax Officer stated the reasons for reopening the assessments under section 147(a). Referring to two subsequent trusts, named, Fern Hill and Race View created by the respondent on March 21, 1957, an....
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....e letter concluded by saying that it was established that the ladies and their children were the legal wives and legitimate children of the respondent. The common counter-affidavit affirmed by the Income-tax Officer in answer to the writ petitions was on similar lines to the aforesaid letter. Admittedly, Fern Hill and Race View Trust deeds, executed in 1957, were not produced before the Income-tax Officer when he made the original assessments for the four years in question. In the counter-affidavit it was alleged that these two trust deeds were " material and primary facts necessary for completing the assessments of the petitioner-assessee for the relevant assessment years " and it was submitted that if the said two documents had been di....
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....icer happened to discover for the first time. The three trust deeds of 1950 also contained the same description of these ladies and their children and the Income-tax Officer accepted the statement made by the respondent's financial adviser, Shri C. B. Taraporewala, seeking to explain why the ladies had been described as wives therein. It is true that the trust deeds of 1957 were not produced at the time of the original assessments, but we do not see what difference production of these two additional documents could have made which contain the same description of the ladies. Neither the letter addressed to the respondent's authorised representatives, M/s. S. G. Dastgir and Company, by the Income-tax Officer on April 15, 1964, nor the counter....
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....fact the ladies were the respondent's legally wedded wives. We are concerned only with the question whether the condition precedent to the exercise of jurisdiction under section 147 exists in this case ; we have found that it does not. Mr. Manchanda also contended that the High Court exercising jurisdiction under article 226 of the Constitution had no power to investigate whether on the material before him the Income-tax Officer was justified in proceeding under section 147 of the Income-tax Act, 1961. He relied, among others, on the following decisions in support of his contention : S. Narayanappa v. Commissioner of Income-tax, Kantamani Venkata Narayana and Sons v. First Additional Income-tax Officer, Commissioner of Income-tax v. A. R....