Judgment

HEGDE, J. (on behalf of himself, Shah, C.J.I. and Grover, J.) :- This is an assessee s appeal by special leave against the judgment of the High Court of Patna dismissing in limine its writ petition under Articles 226 and 227 of the Constitution of India.

2. The assessee is having construction contracts under the Railways as well as the Government. It is a partnership firm. For the assessment year 1960-61, relevant to the accounting year l959-60, after the assessee submitted its income-tax return, it was asked by the Income-tax Officer during the income-tax assessment proceedings to produce before him its books of account and the other relevant papers. The assessee also produced before him a statement showing various creditors from whom it had borrowed on Hundis during the accounting year in question. In that statement it gave the full names and addresses of the alleged creditors. After enquiry, the assessee s total income was assessed at Rs. 69,886/-. On June 3, 1966, the lst respondent (Income-tax Officer, Ward A , Muzaffarpur) issued to the assessee a notice under Section 148 of the Indian Income-tax Act, 1961. The material portion of that notice reads as follows:

"Notice under Section 148 of the Income-tax Act, 1961.

Income-Tax Officer, Muzaffarpur

Dated, the 3-6-1966

To

M/s. Chugamal Rajpal, Muzaffarpur.

Whereas (I) have reason to believe that your income chargeable as income of 1960-1961 in respect of which you are assessable to tax for the assessment year 1919 has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961.

I therefore propose to re-assess the income for the said assessment year and I hereby require you to deliver to me within 30 days from the date of service of this notice a return in the prescribed form of your income assessable relevant to

The income of

the assessment year 1960-61 in respect of which you are assessable for the said assessment year.

2. The notice is being issued after obtaining the necessary satisfaction of the Commissioner of Income Tax. Bihar and Orissa, Patna.

Sd/- S. P. Chaliha

Income-Tax Officer,

Ward A, Muzaffarpur."

3. The assessee challenged the validity of that notice as well as the proceedings taken on the strength of that notice on various grounds. As we are accepting the contention of the assessee that the impugned notice is invalid inasmuch as it did not comply with the requirements of Section 151 (2) of the Act, we have not thought it necessary to examine the other contentions advanced on behalf of the assessee. In this case the notice was issued after four years but before eight years of the date of the original assessment.

4. Section 151 (2) of the Act reads:

"No notice shall be issued under Section 14 after the expiry of four years from the end of the relevant assessment year, unless the Commissioner is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice."

5. Section 148 prescribes:

"(1). Before making the assessment, re-assessment or re-computation under Section 147, the Income-tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section.

(2) The Income-tax- Officer shall before issuing any notice under this section, record his reasons for doing so."

6. Section 147 deals with Income escaping assessment. At this stage we need not refer to that section. We shall refer to that provision at a later stage. Section 139 (2) says:

"In the case of any person who, in the Income-tax Officer s opinion, is assessable under this Act. whether on his own total income or on the total income of any other person during the previous year, the Income-tax Officer may, before the end of the relevant assessment year, serve a notice upon him requiring him to furnish, within thirty days from t