S. ANANDA REDDY, J.

( 1 ) IN this writ petition, the petitioner-bank is assailing the notices issued under Section 10 and subsequent notices issued under Sections 8 (1) and 8 (2) of the Interest-tax Act, 1974, for the assessment years 1992-93, 1993-94 and 1994-95 and prayed for the issue of a writ of certiorari or any other appropriate writ calling for the records relating to the issue of the above notices and quash the said notices, holding that the issue of the said notices is illegal, without jurisdiction and contrary to the provisions of the Interest-tax Act.

( 2 ) THE petitioner is a nationalised bank. Its entire capital is owned by the Central Government. Under the provisions of the Interest-tax Act, 1974 (hereinafter referred to as "the Act"), the petitioner is obliged to file a return disclosing its chargeable interest to tax. Accordingly, the petitioner-bank filed its returns disclosing chargeable interest under the Act for the above three assessment years enclosing copies of its audited profit and loss account and balance-sheet. According to the petitioner, it had declared the full interest, which is chargeable to interest-tax in terms of charging Section 5, read with Section 2 (7) of the Act. In the above three returns, the petitioner-bank returned the interest income accrued on the loans and advances but without including the interest on securities. The said income as declared by the assessee and as accepted by the Assessing Officer while framing the assessment is as follows :

( 3 ) ACCORDING to the petitioner-bank, in pursuance of the returns filed for the above assessment years, the assessments were framed determining the tax liability under the said Act. However, subsequently, the Assessing Officer issued notices on 21/08/1997, purported to be under Section 10 of the Act, reopening the assessments for all the three years in question and the petitioner was directed to file return on the premise that the chargeable interest for the assessment years in question has escaped assessment and the petitioner-bank was called upon to file the returns. The petitioner, however, did not comply with the said notices but wrote a letter seeking withdrawal of the said notices. But the respondent without giving any reply to the letter of the petitioner dated 24/02/1998, issued notices under Sections 8 (1) and 8 (2) of the Act. Aggrieved by the said action of the respondent, the petitioner has approached this court.

( 4 ) ACCORDING to learned counsel for the petitioner, Section 4 of the Act is the charging section, while Section 5 explains the scope of the chargeable interest; and Section 2 (7) of the Act defines the term "interest", which means only interest on loans and advances made in India and also includes commitment charges on utilised portion of any credit sanctioned as well as discount charges on promissory notes and bills of exchange drawn or made in India. Relying upon the above terms, learned counsel contended that the term "chargeable interest" does not include the interest on securities or investments, such as debentures, etc. Learned counsel also contended that the provision of Section 10 has two clauses, i. e. , 10 (a) and 10 (b ). Both the clauses operate under different circumstances. As the Assessing Officer did not specify whether the notices issued were under Clause (a) or (b) of Section 10, the notices are vitiated even on that ground. It is contended that, however, the respondent has come up in the counter that the notices were issued under Section 10 (a) of the Act. In order to attract the provisions of Section 10 (a), the Assessing Officer must have reason to believe that chargeable interest for the assessment years in question has escaped assessment or has been under assessed and the same was as a result of the failure to disclose fully and truly all material facts necessary for the assessment. It is contended that there was no failure or omission on the part of the assessee to disclose any particulars. Acc

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