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 which quashed and set aside a notice dated 28th March, 1968 issued by the Income-tax Officer under Section 148 of the Indian Income-tax Act, 1961 seeking to reopen the assessment of the assessee for the assessment year 1959-60. The facts giving rise to the appeal are a little important and they may be briefly stated as follows.

2. Prior to March, 1947, one Deo Datt Sharma carried on business in Delhi in the name of Sharma Trading Company. The business was quite a prosperous one and the record shows that Deo Datt Sharma was making an average profit of about Rs. 36,000/- per year. In March, 1947, the assessee was incorporated as a private limited, company with Ganga Saran Sharma as its managing director and it took over the business of Sharma Trading Company as a going concern in consideration of allotment of 1703 shares in the share capital of the assessee to Deo Datt Sharma. The share capital of the assessee consisted of 8,500 shares out of which 1703 shares were allotted to Deo Datt Sharma, 5