Hegde,J.

(1) THIS is an appeal by special leave from the decision of the High court of Punjab. The High court dismissed the Writ Petition filed by the appellants primarily on the ground that they had adequate alternative remedy under the Income-tax law.

(2) THE gather of the-appellants SethMultani Mal Modi was a share-holder in the Modi Spinning & Weaving Mills Co. Ltd. On 5/03/1956 that company declared interim dividends to its shareholders. Under that declaration Seth Multani Mal Modi was entitled to Rs. 60,265.00 as interim dividends. The dividend warrants were despatcheded 21/06/1956 and the interim dividends declared were confirmed by the General Meeting of the company on 17/01/1957. Seth Multani Mal Modi died on 22/10/1957. Thereafter the assessment of Seth Multani Mal Modi for the assessment years 1956-57 and 1957-58 was taken up. There it was contended that the dividends referred to earlier must be considered as the income of Multani Mal Modi during the assessment year 1957-58. The Income Tax Officer rejected that contention and considered that income as. having been received during the assessment year 1956-57. The assessments orders for the years 1956-57 and 1957-58 were passed by the Income Tax Officer on 10/02/1958. In appeal the Assistant Appellate Commissioner held that income was not taxable in the ascessment year 1956-57, but it was taxable in the assessment year 1957-58. The tribunal upheld that decision. The resulting position was that dividend income stood excluded from the income for assessment for the year 1956-57 but at the same time it had not been taken into consideration in the assessment for the year 19,57-58. On 7/11/1958 the Income Tax Officer issued a notice under S. 34(1)(b) of the Income Tax Act, 1922 to appellant No. 2 seeking to re-assess the said dividend income in the year 1957-58. He also issued a notice under S. 22(2) of the 1922 Act calling for a fresh return within the time stipulated in the notice. No return was filed in response to that notice. On 28/10/1960 appellant No. 2 sent a telegram requesting for an adjournment. The adjournment asked for was refused and assessment was completed under S. 23(4) of the 1922 Act on 29/10/1960. Thereafter appellant No. 2 made an application under S. 27 of the Act of 192 2/12/1960 for setting aside that order but that was rejected. On appeal the A. A. C. set aside the assessment made, by his order dated 15/06/1963 on the ground that the notice issued under S. 34(1) (b) had not been served on appellant No. 2 and that it was necessary to issue notices to all the legal representatives of Multani Mal Modi. He directed that the Income Tax Officer may proceed to assess the assessees in accordance with law.

(3) ON 1/04/1962 the Income Tax Act, 1961 came into force. On 7/01/1964 the Income Tax Officer issued notices to the appellants under S. 148 of that Act. Aggrieved by those notices the appellants moved the High court under Article 226 of the Constitution praying that those notices be quashed, as according to them the Income Tax Officer was not competent to issue those notices. That petition came up for consideration before a single Judge of the High court. The learned Judge feeling that an important question of law arose for decision, referred writ petition to a Division bench. The division bench dismissed the writ petition mainly on the ground that the assessee had other adequate alternative remedy. Thereafter this appeal was brought after obtaining special leave from this court.

(4) THERE is no dispute that when the 1961 Act came into force, the proceedings initiated under S. 34(1) (b) of 1922 Act were pending. That being so, it was not open to the Income Tax Officer to issue notices under Section 148 of the 1961 Act (S. B. Jain, I. T. 0. v. Mahendra, (1972) 4 SCC 114: 1973 SCC (Tax) 604: (1972) 1 SCR 614). (See our decision in Civil No. 1981 of 1968 delivered today).

(5) MR. B. Sen, learned Counsel for t