The Income Tax Officer has jurisdiction to proceed under Section 34 of the Income Tax Act, 1922, if he has "reason to believe" that certain facts specified in the Section exist in respect of a particular assessment, and this belief does not need to be based on sufficient legal evidence. However, there must be some 'prima facie' ground for the belief or opinion of the Income Tax Officer.

( 1 ) THIS is an application under Art, 226 of the Constitution for appropriate writs, for quashing of certain income-tax assessment proceeding taken against the petitioner under Section 34 of the Income Tax Act, 1922 as amended by Income Tax and Business Profits Tax (Amendment) Act 1948 (Act XLVIII (48) of 1948) and for prohibiting the Respondents from proceeding with the said assessment cases.

( 2 ) THE petitioner is a private limited company incorporated under the Companies Act. Its registered office is at 8 Clive Row, Calcutta.

( 3 ) THE petitioners' total income for the years 1942-1943, 1943-1944 and 1944-1945 were assessed to tax under Section 23 (3) of the Income Tax Act by Assessment Orders dated January 26, 1944, 12-2-1944 and February 15, 1945 respectively and the taxes demanded in respect of the said assessments were duly paid by the petitioner company.

( 4 ) BY three notices dated the 28-3-1951 issued under Section 34 of the Income Tax Act as amended by Act XLVIII (48) of 1948, the Income Tax Officer, Companies District I, Calcutta, called upon the petitioner to submit Returns of the petitioner's total income and total world income in respect of the said three previous years of assessment 1942-43, 1943-44 and 1944-45.

( 5 ) ON the 13th August 1951 the petitioner filed the Returns under protest.

( 6 ) THE petitioner challenges the jurisdiction of the Income Tax Officer to proceed with the reassessments on the ground that the necessary conditions precedent which must exist before the Income Tax Officer can assume jurisdiction to proceed under Section 34 of the Income Tax Act are absent in the present case and secondly on the ground that Section 34 as amended in 1948 has no application to the assessments for 1942-43, 1943-44 and 1944-45 as the amendment has no retrospective operation.

( 7 ) SECTION 34 of the Indian Income Tax 1922 as amended by Act XLVIII (48) of 1948 is as follows: 34. (1) If: (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if a notice issued under that sub-section: provided that: (i) the Income-tax Officer shall not issue a notice under this sub-section, unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such notice; (ii) the tax shall be chargeable at the rata at which it would have been charged had the income, profits or gains not escaped assessme