Ajay K. Basu, J.
1. This is a rule issued by my learned brother, A. K. Sinha J., on 21st April, 1971, at the instance of the petitioner calling upon the respondent, inter alia, to show cause why the notice dated 30th March, 1971, issued under Section 148 of the Income-tax Act for the assessment year 1962-63 by the respondent, Income-tax Officer 'B' Ward, Central Salary Circle, should not be cancelled, withdrawn or rescinded.
2. The petitioner contends that the Income-tax Officer had assumed jurisdiction under Section 148 of the Act on the ground of reconsidering salary income of the petitioner to be taken on 'due basis'. In that event, the petitioner submits that on a thorough examination of the material produced by the petitioner at the time of the original assessment, the Income-tax Officer before making the assessment was fully satisfied about the said material. The petitioner, therefore, submits that the purported action of the respondent No. 1 to assess the salary income of the petitioner on 'due basis' and not on 'actual receipt basis' is amounting to and/or will amount to a mere change of opinion and, as such, the respondent No. 1 had no competence, jurisdiction or authority to initiate the purported reassessment proceeding under Section 148 of the Act.
3. The petitioner also contended that the purported notice under Section 148 of the Act dated 30th March, 1971, which was served upon the petitioner on the 1st April, 1971, as alleged by him, is barred by limitation and that the said notice for reassessment for the assessment 'year 1962-63, was issued in violation of Section 149 of the Act.
4. The petitioner also contended that the purported action of the respondent No. 1 in issuing the said notice dated 30th March, 1971, under Section 148 of the said Act which was received by the petitioner on the 1st April, 1971, is illegal, invalid and inoperative, inasmuch as the said notice has been issued without obtaining the necessary sanction of either the Commissioner of Income-tax or that of the Central Board of Direcr Taxes, as required under Section 151 of the said Act.
5. The petitioner also, inter alia, contended that the power under Section 148 of the new Act has been sought to be utilised as a mere cloak or pretence for making a fishing enquiry or investigation with the object of reviewing the previous order and, as such, the condition precedent fof the exercise of jurisdiction under Section 148 of the new Act did not exist.
6. The petitioner also contended that in any event there has been no omission or failure on the part of the petitioner to disclose fully and truly the material particulars of his income necessary for the assessment for the said year and, as Such, the said notice is illegal, invalid and inoperative as the conditions precedent for the assumption of jurisdiction by the respondent No. 1 under Section 148 of the new Act read with Section 147(a) of the said Act have not been satisfied.
7. In the affidavit-in-opposition the respondent No, 1 denied all these allegations in the petition and in paragraph 7 says :
'That the petitioner is guilty of suppression of material facts from this Hon'ble court. Against the order of assessment of the petitioner for the assessment year 1961-62, the petitioner preferred an appeal before the Appellate Assistant Commissioner of Income-tax. The said appeal was heard by the Appellate Assistant Commissioner of Income-tax, Range 'J', Calcutta, and by his order dated 20th March, 1967, the said Appellate Assistant Commissioner disposed of the said appeal holding, inter alia, that the salary income of the petitioner shall be taken on 'due basis' and not on 'receipt basis' as done by the assessing Income-tax Officer and held inter alia, that the salary income of the petitioner on 'due basis' for the assessment year 1961-62 should therefore be Rs. 8,271.00.'
8. Again in paragraph 17 the respondent says:
'That the action under Section 147 of the new Act has been taken by me to assess the salary income of the petitioner on 'due basis' in accordance with the decision of the Appellate Assistant Commissioner of Income-tax, Range 'J', dated 20th April, 1967, given in the appeal preferred by the petitioner for the assessment year 1961-62 inasmuch as the salary income of the petitioner as disclosed by the petitioner on 'due basis' for the assessment year 1962-63, was not included in the computation of the total income of the petitioner inasmuch as the respondent No. 2 in assessing the petitioner for the assessment year 1962-63 adopted the 'receipt basis'.'
9. The respondent also states that the said notice dated 30th March, 1971, was served on the petitioner on the same day, i.e., on the 30th March, 1971. The petitioner, however, in the acknowledgement of the said notice according to the respondent put the date of receipt thereof as 29th March, by mistake. Further, the respondent No. 1 also states in his affidavit at the end of paragraph 19 :
'I say that the said notice was served on the petitioner on March 30, 1971, but the petitioner wrongly put the date of receipt of the notice on the acknowledgement slip thereof as 29th March. I further say that necessary sanction of the competent authority was duly obtained before issuing the said notice but through inadvertence the said fact was not stated and/ or disclosed in the said notice.'
10. These are shortly the allegations and/or counter-allegations of the parties before me.
11. Though many points were taken in the petition Mr. Sanjoy Bhattacharya, advocate, appearing for the petitioner, mainly took the point that the notice of reopening the assessment order under Section 148 of the Income-tax Act is hopelessly barred by limitation and is also illegal and inoperative for want of proper sanction under Section 151 and is also of fishing nature and urged that the Income-tax Officer was guilty of mala fide conduct.
12. In support of this contention, Mr. Bhattacharya drew my attention to the original notice along with the envelope which was sent to his client by the department by registered post on 30th March, 1971, and was received by his client on 1st of April, 1971. The notice bore the date of 30th March, 1971, and the post mark of the sending post office also bore clearly the date of 30th March, 1971, on the enevelope, but the stamp mark of the receiving post office, as usual, is blurred but with some difficulty 'I' may be read, from which it may probably be inferred that it was received by the post office on the 1st of April, 1971. Apart from the receipt stamp it is quite likely that even in Calcutta the registered letters take more than a day to reach the addressee. Mr. Banerjee appearing for the income-tax department also does not seriously challenge the fact that the registered letter which was sent on 30th March, 1971, would have probably reached the addressee on the 1st of April, 1971. He, however, drew my attention to the fact that apart from the notice which was sent by registered post, another notice was served personally on the petitioner on the 30th March, 1971, but in the acknowledgement receipt it bears the date as 29th March, 1971, and according to Mr. Banerjee the date 29th March, 1971, on the acknowledgement receipt is a mistake and it should be 30th March, 1971. This acknowledgement receipt was seriously challenged by Mr. Bhattacharya and he drew my attention to certain overwritings and strenuously contended that the acknowledgement receipt does not bear the signature of his client or anybody on behalf of his client and, as such, according to Mr. Bhattacharya, this receipt is a spurious document and the notice dated 30th March, 1971, cannot possibly be received by anyone on the previous date, i.e., on the 29th of March, 1971, though it bears the date of 29th of March, 1971. According to him, this document is a suspicious document.
13. It is not disputed that if the notice was really received on the 1st of April, 1971, that would be beyond 8 years of the assessment year 1962-63 but if the notice that was served by hand is taken to be correct service then of course it will not be beyond 8 years. I asked the parties to produce both these documents--the original envelope with the notices which reached the petitioner by registered post and also the acknowledgement slip which was produced by Mr. Banerjee.
14. Mr. Bhattacharya further argued that in any event in the present case the requisite period of limitation is not 8 years under Section 147(a), but 4 years under Section 147(b). Section 149(1) says :
'(i) No notice under Section 148 shall be issued,-- (a) in cases falling under Clause (a) of Section 147-
(i) for the relevant assessment year, if eight years have elapsed from the end of that year, unless the case falls under Sub-clause (ii);.....
(b) in cases falling under Clause (b) of Section 147, at any time after the expiry of four years from the end of the relevant assessment year.
(2) The provisions of Sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151.'
15. Mr. Bhattacharya drew my attention to the order of the Income-tax Officer for the assessment year 1962-63, which says :
'The assessee has shown salary income from National Library on 'due basis' Assessee actually received no salary in the year under consideration, and, therefore, salary income is not taken into consideration in computing his total income for reasons stated in the assessment order for the assessment year 1961-62.'
16. Thus, it shows as in the previous year, the assessment order was madeon the 'actual receipt basis' and not on 'due basis'. This order wasmade on October 12, 1966, but the Appellate Assistant Commissioner on20th April, 1967, decided that for the year 1961-62 though the assessmentwas made under 'actual receipt basis' it should be done on the 'duebasis' and that was done on the 20th April, 1967. As stated by theIncome-tax Officer this decision of the Assistant Commissioner caused himto send the said impugned notice dated 30th March, 1971, which says :
'Whereas I have reason to believe that your income in respect of which you are assessable/chargeable to tax fo'r the assessment year 1962-63 has escaped assessment within the meaning of Section 147 of the Income-tax Act, 1961.....'
17. From the various authorities cited by Mr. Bhattacharya he contends that this 'reason to believe' is based on the information received by the Income-tax Officer by reason of the Assistant Commissioner's order and, therefore, it comes under Section 147(b) and not 147(a). The decisions cited by Mr. Bhattacharya say that in respect of information from the court's order the actual period would be 4 years and not 8 years. Mr. Bhattacharya says that in the original notice which was served on the petitioner and produced before me the sanction of the Commissioner was deleted. I find from the original notice that it is so. But Mr. Banerjee appearing for the department says that it was through inadvertence that this portion was deleted in the original notice and drew my attention to the submission made by the Income-tax Officer in paragraph 19 which says that through inadvertence that was deleted, as stated above. Mr. Banerjee however produced before me from the file the alleged sanction of the Commissioner of Income-tax which also according to the petitioner does not show that the Commissioner of Income-tax did actually apply his mind while according the sanction.
18. Mr. Banerjee also urged that the court should not consider about the validity of service of notice in the writ application which is a question of fact and also drew my attention to several authorities.
19. Mr. Banerjee refers to a case, Chhugamal Rajpal v. S. P. Chaliha, : 79ITR603(SC) . But in that case the Supreme Court held that the notice under Section 147 was invalid and I do not think that that case at all supports Mr. Banerjee. Another case which was referred to by him and also cited by Mr. Bhattacharya is the case of Panama Private Ltd. v. Income-tax Officer, Calcutta, : 82ITR205(Cal) . Mr. Banerjee strongly relies on a recent Supreme Court case. Commissioner of Income-tax v. Ramendra Nath Ghosh, : 82ITR888(SC) where their Lordships affirming the decision of the High Court, on the facts, held that:
'The service of the notice was not in accordance with the law and therefore it could not be said that the assessees had been given a proper opportunity to put forward their case as required under Section 33B of the Income-tax Act.'
20. But in the said judgment their Lordships also said :
'The question whether the assessees had been served in accordance with the law or not is essentially a question of fact. The Income-tax Act provides for an appeal against the order (under appeal) under Section 33B. Normally, the assessee should have gone up on appeal against the order under Section 33B. They should not have been allowed to invoke the extraordinary jurisdiction of the High Court.....It cannot be said that the High Court had no jurisdiction to entertain the writ petitions though it should not have exercised its discretion in favour of the assessee in view of the adequate alternative remedy they had.'
21. Mr. Bhattacharya appearing for the petitioner urged that under Section 147 of the Income-tax Act two contingencies are contemplated: (i) omission or failure on the part of the assessee, and (2) no omission or failure on the part of the assessee but in consequence of some information which came into his possession for which he may invoke the power of reopening. Now, in the present case, evidently the Income-tax Officer has based his action for reassessment on the basis of the decision of the Appellate Assistant Commissioner in respect of the assessment of the previous financial year, as stated by him in the affidavit. Now the decision of the Appellate Assistant Commissioner is a judicial decision and, as such, according to Mr. Bhattacharya, judicial decisions are informations and not failure or omission on the part of the assessee.
22. Mr. Bhattacharya further submits that the present case falls under Section 147(b) and not under Section 147(a) and so the prescribed period of limitation is 4 years. The first assessment in respect of 1962-63 was made on October 12, 1966, and the decision of the Appellate Assistant Commissioner was on April 20, 1967, and, therefore, the time has run out on October 12, 1970. To support his contention, Mr. Bhattacharya relied on several decisions. In a case, Jaganmohan Rao v. Commissioner of Income-tax, : 75ITR373(SC) the Supreme Court has held that the decision of the Privy Council which determined the rights of the parties constituted definite information within the meaning of Section 34 of the old Income-tax Act. The same view was expressed in Maharaj Kumar Kamal Singh v. Commissioner of Income-tax, : 35ITR1(SC) by the Supreme Court, where it held :
'The decision of the Privy Council was 'information' within the meaning of Section 34(1)(b) and that their decision justified the belief of the Income-tax Officer that part of the appellant's income had escaped assessment for the relevant year.
Two conditions must be satisfied before the Income-tax Officer can act under Section 34(1)(b): he must have information which comes into his possession subsequent to the making of the original assessment order, and that information must lead to his belief that income chargeable to tax has escaped assessment, has been under-assessed or assessed at too low a rate, or has been made the subject of excessive relief.'
23. In another case, Commissioner of Income-tax v. Burlop Dealers, : 79ITR609(SC) the Supreme Court has decided that:
'Where on the evidence and the materials produced during the original assessment proceedings the Income-tax Officer could have reached a conclusion other than the one which he has reached, a proceeding under Section 34(1)(a) of the Indian Income-tax Act, 1922, will not lie merely on the ground that the Income-tax Officer has raised an inference which he may later regard as erroneous.'
24. In the same judgment it is stated :
'We are of the view that under Section 34(1)(a) if the assessee has disclosed primary facts relevant to the assessment, he is under no obligation to instruct the Income-tax. Officer about the inference which the Income-tax Officer may raise from those facts. The terms of the Explanation to Section 34(1) also do not impose a more onerous obligation. Mere production of the books of account or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclosure within the meaning of Section 34(1), but where on the evidence and the materials produced the Income-tax Officer could have reached a conclusion other than the one which he has reached, a proceeding under Section 34(1)(a) will not lie merely on the ground that the Income-tax Officer has raised an inference which he may later regard as erroneous.'
25. Mr. Bhattacharya submits that whether the assessment will be made on the 'actual receipt basis' or on 'due basis' is a matter of inference for the Income-tax Officer and the assessee should not be made liable if the Income-tax Officer later changes his inference.
26. However, on the point of 'information', Mr. Bhattacharya cited another Supreme Court case, Assistant Controller of Estate Duty v. Nawab Sir Mir Osman Ali Khan Bahadur, : 72ITR376(SC) which says:
'The opinion of the Central Board of Revenue regarding the correct valuation of securities for purposes of estate duty, expressed in an appeal prepared by the accountable person, is 'information' within the meaning of Section 59 of the Estate Duty Act, 1953.'
27. Similar view was expressed by this court in a case, Panama Private Ltd. v. Income-tax Officer, Calcutta, about which I have already stated.
28. So, following the decisions, the present case falls under Clause (b) of Section 147 for which the period of limitation is 4 years.
29. On the point of sanction under Section 151 of the Income-tax Act, Mr. Bhattacharya's contention was that in this case there was no proper sanction as in the notice served on him and produced before me, the 2nd paragraph, which contemplates about sanction, was deleted. The Income-tax Officer has also stated in his affidavit that through inadvertence it was deleted. So he produced before me the original file where the Commissioner's signature appears bearing the date 30th March, 1971. In the cases Chhugamal Rajpal v. S. P. Chaliha and Commissioner of Income-tax v. Burlop Dealers the Supreme Court has said that if the Commissioner mechanically accorded sanction, that is not proper sanction. In the present case, as I have seen, there was only a rubber stamp above the signature of the Commissioner. About the notice as I have stated earlier, I asked the petitioner to produce before me the original envelope and the notice issued by the income-tax department and I also asked Mr. Banerjee to produce before me the said acknowledgment slip, I direct that these documents should be kept with the records of this case. On examining these documents I must candidly say that the acknowledgement slip appears to be somewhat suspect. Therefore, there was no proper service of notice on March 30, 1971, nor there was a proper sanction by the Commissioner of Income-tax and, in any event, in the facts of this case, Section 147(1)(b) applies, hence notice under Section 148 is barred by limitation and should be cancelled.
30. So, considering all the facts and circumstances of this case and considering the arguments of the learned advocates on behalf of the parties, I am of opinion that this rule should succeed and should be made absolute.
31. The rule is made absolute but I make no order as to costs,
Rule made absolute.