T.K. Basu, J.
1. In this application, the petitioner, Manik Chand Nahata, challenges a notice under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), in respect of the assessment year 1949-50. It appears that two notices in identical terms for the same assessment year had been issued, one on the 5th March, 1966, and the other on the 8th March, 1966.
2. At the time, the rule nisi was obtained, no reasons had been disclosed by the Income-tax Officer in respect of the impugned notices. The original petition contains the usual grounds of challenge stating that the conditions precedent to the exercise of power under Section 147 read with Section 148 of the Act had not been satisfied.
3. In the affidavit-in-opposition affirmed by Sebabrata Saha, the Income-tax Officer, 'K' Ward, District III(2), Calcutta, and affirmed on the 28th July, 1966, it is stated that the proceedings for reassessment for the assessment year 1949-50 was started against the petitioner on receipt of certain informations. Information was received that a sum of Rs. 72,513-7-6 was standing in the name of Sri Manik Chand Nahata in the books of account of Messrs. Hanutmull Budhmall. It is further stated that the assessee was summoned under Section 37 of the Income-tax Act, 1922, and thereafter, under Section 131 of the Act. According to the affidavit certain contradictions were found in the different statements made by the assessee. Paragraph 2 of the affidavit further proceeds to state as follows:
'In view of these facts On the basis of the material in my possession Ihad reason to believe and I bona fide believe that due to the failure and/oromission on the part of the assessee to file the return and disclose allmaterial facts relevant for the assessment, the income of the petitioner hasescaped assessment and/or has been under-assessed and as such proceedingsunder Section 147(a) of the Income-tax Act, 1961, have been initiated andnotice under Section 148 of the Income-tax Act was duly served afterfulfiling all conditions precedent.'
4. Before the main rule was heard the petitioner came up with an application for amendment of the petition by adding, inter alia, the followinggrounds: . -.
'For that in view of the fact that the alleged escaped income is less, than Rs. 1 lakh the rigfit to reopen and/or make the assessment and/or recompute the income of the petitioner for the relevant assessment year was barred under the Indian Income-tax Act, 1922, at the date when -the Income-tax Act, 1961, came into force, i.e., 1st April, 1962, and as such the Income-tax Officer has no competence, jurisdiction and/or authority to issue the notices under Section 148 of the Income-tax Act, 1961, in order to make an assessment and/or recompute the income which had become barred underthe Income-tax Act, 1922, at the date when the Income-tax Act, 1961, cameinto force.'
5. On the application for amendment I made the following order, byconsent of parties, on the 9th December, 1969 :
'The petitioner will be allowed to urge the grounds taken in this application at the time of the hearing of the main rule. Main rule to appear in the peremptory list for hearing on December 22, 1969. A/O if any by December 16, 1969, A/R if any by December 20, 1969. This order is without prejudice to the rights and contentions of the parties.'
6. It may be noted that no further affidavit-in-oppositiort was filed by therespondents pursuant to the leave granted by me while allowing theamendment application.
7. Dr. Debi Pal, appearing on behalf of the petitioner, draws my attention, in the first place, to Section 34 of the Indian Income-tax Act, 1922. The relevant portion of Section 34 is as follows:
'Provided that the Income-tax Officer shall not issue, a notice under Clause (a) of Sub-section (1)-
(i) for any year prior to the year ending on the 31st day of March,1941: . . .
(ii) for any year, if eight years have elapsed after the expiry of that year, unless the income, profits or gains chargeable to income-tax which have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under this Act or the loss, or depreciation allowance which has been computed in excess, amount to, or are likely to amount to, one lakh of rupees or more in the aggregate, either for that year, or for that year and any other year or years after which or after each of which eight years have elapsed, not beings year or years ending before the 31st day of March, 1941.'
8. On the strength of the above provisions, Dr. Pal submits that the power of the Income-tax Officer to reopen the proceedings under Section 34(1)(a) of the old Act was fettered by one important limitation if eight years had elapsed after the expiry of the relevant assessment year. In such a case the Income-tax Officer could only issue a notice if the amount of escaped income was likely to be one lakh of rupees or more in the aggregate either for that year or for that year and any other year. Relying on the statements of the Income-tax Officer in paragraph 2 of the affidavit-in-opposition, Dr. Pal contends that taking the figure of escaped income at its highest it cannot exceed a sum of Rs. 72,513-7-6. My attention is drawn in this connection to a letter dated the 21st April, 1968, which was addressed by the petitioner to the Income-tax Officer, 'K' Ward, Distt. III(2), Calcutta, and which is annexure 'C' to the petition. From the letter it appears that in the relevant accounting year a sum of Rs. 53,983-12-3 was standing in thename of the petitioner in the books of Hanutmull Budhmall of 143, Cotton Street, Calcutta. That sum included a sum of Rs. 12,291-10-3 which had been standing in the books of Messrs. Hanutmull Harackchand in the earlier years and was transferred to the books of Hanutmull Budhmall in the relevant year of account. Therefore, according to the petitioner's contention, the total deposit in his name in the books of Hanutmull Budhmall including the interest of Rs. 2,692-2-0 comes to Rs. 41,692-2-0 only. Dr. Pal pointed out that the sum of Rs. 72,513-7-6 which is mentioned in paragraph 2 of the affidavit of the Income-tax Officer consists ,of the sum of Rs. 53,983-12-3 together with subsequent interest accrued thereon upto the date when the information with regard to the deposit was alleged to have been received by the Income-tax Officer. According to Dr. Pal even if the entire amount of Rs. 72,513-7-6 is construed to be the escaped income of the petitioner in the relevant year of account, it falls short of the sum of one lakh rupees. Consequently, accordingly to the provisions of Section 34 of the Indian Income-tax Act, 1922, no action could have been taken by the Income-tax Officer beyond a period of eight years from the relevant assessment year. In other words, the proceedings for reassessment would have become time-barred under the provisions of the old Act on the 31st March, 1958.
9. According to Dr. Pal if proceedings for reassessment become time-barred under the provisions of the Indian Income-tax Act, 1922, before the new Income-tax Act, 1961, came into force, it cannot be revived by virtue of the provisions of the new Act. Reliance is placed in this connection on a decision of the Supreme Court in the case of J. P. Jani, Income-tax Officer v. Induprasad Devshanker Bhatt, : 72ITR595(SC) . In that case it was held that the Income-tax Officer cannot issue a notice under Section 148 of the Income-tax Act, 1961, in order to reopen the assessment of an assessee in a case where the right to reopen the assessment was harried under the 1922 Act at the date when the new Act came into force (i.e. 1st April, 1962). It was not permissible to construe Section 297(2)(d)(ii) of the new Act as reviving the right of the Income-tax Officer to reopen an assessment which was already barred under the old Act. Neither by express language nor by necessary implication does Section 297(2)(d)(ii) disclose that there was a revival of the right of the Income-tax Officer to reopen an assessment which was already barred under the old Act. The section is applicable only to those cases where the right of the Income-tax Officer to reopen the assessment was not barred under the repealed Act.
10. Mr. Dipak Sen, appearing on behalf of the revenue, was entirely unable to refer me to any material either in the affidavit of the Income-tax Officer or in the records of the file to establish that the amount of escaped income in the instant case could exceed one lakh of rupees. It was not seriously disputed that unless the escaped income amounted to rupees one lakh or more, the Income-tax Officer would have no right to reopen the proceedings under the old Act beyond the expiry of eight years from the relevant assessment year. Mr. Sen drew my attention to the language of Section 34 which uses the words 'amount to' or 'likely to amount to' a lakh of rupees or more. Mr. Sen sought to argue that it was open to the Income-tax Officer to reopen proceedings if he felt that in the course of investigation the amount of income that had escaped assessment was likely to exceed rupees one lakh in the aggregate.
11. In my view, this contention of Mr. Sen is without any merit. The expression 'likely to amount to', in my view, means that the Income-tax Officer must form some kind of belief or even a suspicion before the notice under Section 34 is issued that the amount of escaped income for the year or any other year may amount to rupees one lakh or more in the aggregate. The satisfaction or belief or suspicion must necessarily be tentative because after the final adjudication it may be found that no income had escaped assessment at all. This is the context and background in which the expression 'likely to amount' is to be construed. Mr. Sen did not contest the position that unless the factual basis, viz., that the amount of actual income was likely to exceed rupees one lakh, could be established, the revenue could not possibly get out of the mischief of the decision of the Supreme Court which I have mentioned above.
12. Since there is no material before me to hold, that the amount of escaped income in the instant case is likely to exceed rupees one lakh, I must hold that the decision of the Supreme Court is on all fours with the facts of the present case. Consequently, it must be held that since the right to reopen the proceedings was barred under the old Act before the new Act came into force, it could not be revived by the new Act. As such the notice under Section 148 of the Act, which is impugned in the present case, must be held to be illegal and invalid and must be struck down.
13. In the result, this application succeeds and the rule is made absolute. There will be a writ in the nature of mandamus directing the Income-tax Officer, the respondent No. 1, to forthwith recall, cancel and withdraw the notices dated the 5th March, 1966, and the 8th March, 1966, issued under Section 148 of the Income-tax Act, 1961, and a writ in the nature of prohibition restraining the respondents from giving effect to the notices in any manner whatsoever.
14. There will be no order as to costs.