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Issues Involved:
1. Validity of the notice issued under Section 34 of the Income-tax Act. 2. Whether the Income-tax Officer had reasonable grounds to believe that the petitioner's income had escaped assessment. 3. Compliance with the conditions precedent for issuing notice under Section 34(1)(a). 4. Alleged vagueness and indefiniteness of the notice. 5. Jurisdiction of the Income-tax Officer under Section 34 of the Act. Detailed Analysis: 1. Validity of the Notice Issued under Section 34 of the Income-tax Act: The petitioner challenged the validity of the notice dated April 2, 1957, issued under Section 34 of the Income-tax Act, arguing that it was issued without reasonable grounds. The court found that the Income-tax Officer had sufficient information and reasons to believe that the petitioner's income had escaped assessment. The notice was issued after obtaining the necessary satisfaction of the Commissioner of Income-tax, Bombay City II, which is a requirement under the Act. 2. Reasonable Grounds to Believe Income Escaped Assessment: The petitioner argued that the Income-tax Officer could not have reasonably and honestly believed that the income had escaped assessment. However, the court noted that the Income-tax Officer had information about undisclosed bank accounts with substantial deposits, which were not explained satisfactorily by the petitioner. The Officer's belief was based on concrete information and further inquiries, justifying the issuance of the notice under Section 34. 3. Compliance with Conditions Precedent for Issuing Notice under Section 34(1)(a): The petitioner contended that the conditions precedent for issuing the notice under Section 34(1)(a) were not met, specifically the recording of reasons and the satisfaction of the Commissioner. The court found that the notice explicitly mentioned that it was issued after obtaining the necessary satisfaction of the Commissioner, and an affidavit in reply confirmed that the conditions precedent were satisfied. The court held that the petitioner failed to prove the total absence of jurisdiction of the Income-tax Officer on the face of the record. 4. Alleged Vagueness and Indefiniteness of the Notice: The petitioner argued that the notice was vague and indefinite as it did not specify the source of the escaped income and mentioned the assessment year incorrectly. The court held that there is no statutory requirement for the notice to mention the source of the escaped income. The phrase "income assessable to income-tax for the year ending 31st March, 1952, assessment year 1951-52" was found to be consistent with the Income-tax Act and Finance Act, referring to the assessment year and not the accounting year. The court concluded that the notice was not vague or indefinite and complied with the provisions of Section 22(2) of the Act. 5. Jurisdiction of the Income-tax Officer under Section 34 of the Act: The petitioner claimed that the notice was issued under sub-clause (b) of Section 34(1) and was therefore time-barred. The court found no basis for this assumption, determining that the notice was issued under sub-clause (a) of Section 34(1), which does not have a time limit for issuing notices. The court emphasized that the Income-tax Officer's subjective satisfaction is crucial for proceeding under Section 34(1)(a), and the petitioner failed to prove the Officer's lack of jurisdiction. Conclusion: The court dismissed the petition, holding that the notice issued under Section 34 of the Income-tax Act was valid, the Income-tax Officer had reasonable grounds to believe that the petitioner's income had escaped assessment, the conditions precedent for issuing the notice were met, the notice was not vague or indefinite, and the petitioner failed to prove the absence of jurisdiction of the Income-tax Officer. The rule was discharged, and the petition was dismissed with costs.
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