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Issues:
1. Jurisdiction of the Income-tax Officer to proceed under section 34 against the petitioner. 2. Validity of the notices issued under section 34 for the assessment years 1955-56, 1956-57, and 1957-58. 3. Interpretation of the Supreme Court decision in Lalji Haridas v. Income-tax Officer regarding assessments against two persons in respect of the same income. 4. Analysis of the decision in Joti Prasad Agarwal v. Income-tax Officer and its applicability to the present case. 5. Examination of the argument regarding the Income-tax Officer's reason to believe that the income belonged to the petitioner. 6. Consideration of the stage of the ongoing enquiry against the petitioner. 7. Assessment of the appropriateness of seeking remedy under article 226 of the Constitution. Jurisdiction of the Income-tax Officer: The petitioner argued that the Income-tax Officer lacked jurisdiction to proceed under section 34 for the assessment years 1955-56, 1956-57, and 1957-58 after completing assessments against Raj Nath. The court rejected this argument, stating that the Income-tax Officer's pursuit of the matter indicated a valid reason to believe the income belonged to the petitioner, despite prior assessments. Validity of Notices under Section 34: The petitioner contested the validity of the notices issued under section 34, claiming errors in the wording regarding assessment years. The court dismissed this argument, finding no prejudice caused to the petitioner by the alleged errors in the notices. Interpretation of Supreme Court Decision - Lalji Haridas v. Income-tax Officer: The court analyzed the Lalji Haridas case, where the Supreme Court allowed enquiries against two persons for the same income. However, the court found this decision did not directly apply to the present case as the entities involved were distinct, with Raj Nath not being a partner in the petitioner firm. Analysis of Joti Prasad Agarwal v. Income-tax Officer: The court examined the Joti Prasad Agarwal case, which held that multiple assessments against the same entity were impermissible. However, the court distinguished this case as the entities involved here were separate individuals, not an association of persons or firm and partners. Income-tax Officer's Reason to Believe: The petitioner argued that the Income-tax Officer lacked reason to believe the income belonged to them after assessing Raj Nath. The court rejected this argument, stating that the Officer's continued pursuit indicated a valid belief justifying the proceedings. Stage of Ongoing Enquiry: The court noted that the enquiry against the petitioner was ongoing, making it premature to challenge the Income-tax Officer's reason to believe. The court suggested that the appropriate remedy was to await the conclusion of the enquiry and appeal any final order under section 34. Remedy under Article 226: The court dismissed the writ petition, emphasizing that bypassing remedies under the Income-tax Act through article 226 was not justified. Referring to the C. A. Abraham case, the court held that such attempts to shortcut the process were unwarranted. In conclusion, the court dismissed the petition with costs, highlighting the need to follow the prescribed remedies under the Act and await the conclusion of the ongoing enquiry against the petitioner.
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