Judgment

SHAH, JJ.

( 1 ) M/s. Seth Brothers run a flour mill in the name and style of "imperial Flour Mills". From April 1, 195 3/03/1956 the business was carried on by M/s. Seth Brothers of which the partners were Baikunth Nath and Vishwa Nath. Between March 1956 and March 31, 1957, the business was carried on by Baikunth Nath and Vishwa Nath, Dr. Manmohan Nath, Mrs. Rama Rahi and Mrs Sushila Devi. On 7/04/1957 Mrs. Premlata was admitted as a partner. The partners were engaged in carrying on other business in the names of Seth Brothers (Private) Ltd. , Nath Brothers (Private) Ltd. , and Meerut Cold Storage and General Mills.

( 2 ) THE owners of the business were, year after year, assessed to income-tax in respect of the income arising in the course of the business. On 14/03/1963 the income-tax Officer, Meerut issued a notice under S. 148 of the Income-tax Act, 1961, intimating M/s. Seth Brothers that there was reason to believe that their income chargeable to tax had escaped assessment and it was proposed to re-assess this income for the assessment year 1954-55. In response to the notice Baikunth Nath and Vishwa Nath, filed a return under protest. In the meantime information was rec