Judgment

SHAH, J. : M/s. Navanagar Transport and Industries Ltd.- hereinafter called the assessed -- is a company in which "the public are not substantially interested" within the meaning of S. 23-A of the Indian Income-tax Act, 1922. At the annual general meeting held on December 4, 1957, the Company declared Rs. 8,767 as dividend payable to the share-holders for the year Ending March 31, 1957. The Income-tax Officer, Special Investigation Circle, Ahmedabad, determined the taxable income of the assessee for the assessment year 1957-58 at Rs. 1,10769. Since the dividend declared by the Company was less than the statutory percentage of the total income of the Company, as reduced by the taxes specified in Cls. (a) and (b) of sub-s. (1) of S. 23-A, the Income-tax Officer issued a notice on November 15, 1961 calling upon the assessee to show cause why an order under S. 23-A should not be made for the assessment year 1957-58 and submitted the record to the Inspecting Assistant Commissioner seeking permission under sub-s. (8). The assessee then applied to the High Court of Gujarat under Art. 226 of the Constitution for a writ of mandamus restraining the Income-tax Officer from giving ef