Judgment

GUPTA, J. :- These are four appeals by certificate from a common Judgment of the High Court of Andhra Pradesh at Hyderabad by which the High Court directed the appellant, Income-tax Officer, Income-tax-cum-Wealth Tax Circle II, Hyderabad to refrain from proceeding against the respondent under Section 147 (a) of the Income-tax Act, 1961. The appellant had served on the respondent, Nawab Sahib Mir Osman Alikhan Bahadur, H. E. H., the Nizam of Hyderabad, notices under Section 148 of the Income-tax Act, 1961 stating that he had reasons to believe that income of the respondent chargeable to tax for the assessment years 1955-56, 1956-57, 1957-58 and 1958-59 had escaped assessment within the meaning of Section 147 of the Act and proposing to reassess the income for the said assessment years. The respondent challenged the validity of the proceedings under Section 147 sought to be initiated by filing four writ petitions in the High Court of Andhra Pradesh at Hyderabad. The High Court by the impugned Judgment allowed all the four petitions and prevented the Income-tax Officer from proceeding further under Section 147 of the Income-tax Act, 1961. In these appeals the appellant questions the correctness of the High Court s decision

2. The material facts are briefly these. Assessments for the aforesaid four years were completed respectively on March 18, 1958, March 19, 1958, July 20, 1958 and March 28, 1961 under the Income-tax Act of 1922. After the returns in respect of the said years were filed, the Income-tax Officer called upon the respondent to state his relationship with four ladies by putting three queries to him. The queries were as follows:

"(a) The rites and ceremonies attendant on legal marriages, according to Muslim law and how they were observed in the case of each of the four ladies viz., Dulhan Pasha Begum Saheba, Mazharunnisa Begum Saheba, Laila Begum Saheba and Jani Begum Saheba.

(b) What legal status is accorded to the children of Mazharunnisa Begum Saheba, Laila Begum Saheba and Jani Begum Saheba, vis-a-vis, the children of the late Dulhan Pasha Begum Saheba?

(c) Any other factors from the point of view of the religion which distinguished the status of late Dulhan Pasha Begum Saheba from the other three ladies."

3. It appears that on May 1, 1950, August 8, 1950 and December 29, 1950 the respondent had executed three trust deeds, described respectively as Family Trust, Miscellaneous Trust and Family Pocket Money Trust, for the benefit of Mazharunnissa Begum, Laila Begum, Jani Begum and the minor children of the last two. In the aforesaid trust deeds the three ladies were described as wives of the respondent who was also referred to as the father of their minor children. In one of these documents, viz., the Family Pocket Money Trust Deed, the description of Laila Begum and Jani Begum as wives was preceded by the expression "ladies of position." Under Section 16 (3) of the Income-tax Act of l922, in computing the total income of any individual for the purposes of assessment, the income of the wife or minor child of the assessee arising from assets transferred by the husband to the wife or the minor child otherwise than for adequate consideration was to be included. There is no dispute that these trust deeds were before the Income-tax Officer before he completed the assessments for the said four years.

4. On September 9, 1957 Shri C. B. Taraporawala, Financial Adviser and General Power of Attorney Agent of the respondent, filed a statement before the Income-tax Officer in reply to these queries. In this reply it was stated that the late Dulhan Pasha Begum Saheba was the only legally wedded wife of the respondent, that with the other three ladies the respondent had not gone through the essential formalities of a valid marriage under Mohammedan Law, that these three ladies who occupied high social position and who were received in his palace were "ladies of position" and in view of the special favours bestowed upon them the