Judgment

BHAGWATI, J.:- This appeal by certificate is directed against an order passed by a Division Bench of the High Court of Calcutta allowing an appeal against a decision of a single Judge dismissing the writ petition of the respondent. The facts giving rise to the appeal may be briefly stated as follows:

2. The respondent was assessed to income-tax for the assessment year 1959-60 and certain interest paid by the respondent to creditors from whom it claimed to have borrowed monies on hundis, was allowed as deductible expenditure. The assessment of the respondent was completed on 23rd Aug., 1960. On or about 25th January, 1968, however, a Notice was issued by the Income-tax Officer under Section 148 of the Income-tax Act, 1961 to re-open the assessment of the respondent for the assessment year 1959-60. The notice was obviously under Section 147 (a) since a period of four years had already elapsed from the close of the assessment year 1959-60 and no notice could be issued under Section 147 (b). The Income-tax Officer claimed that the transactions of loan represented by the hundis were bogus and no interest was paid by the respondent to any of the creditors shown in the hundis and i