The condition precedent for invoking the jurisdiction under Section 147(a) of the Income Tax Act, 1961, is that the ITO must have reason to believe that the income chargeable to tax has escaped assessment and that such "underassessment" has occurred by reason of either, (i) omission or failure on the part of an assessee to make a return of his income under Section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year.

( 1 ) THIS rule under Article 226 of of the Constitution is directed against the notice dated March 24, 1973, issued under Section 148 of the I. T. Act, 1961, for the assessment year 1964-65.

( 2 ) THE petitioner is a company. The assessment was made by the respondent No. 2 on March 1, 1965. Four years thereafter, another ITO suddenly issued a notice under Section 148 of the Act and accordingly the petitioner filed the return under protest. The said ITO passed an order imposing additional tax by holding that the petitioner was a company in which the public were not substantially interested, but his order was set aside by the Appellate Tribunal on July 22, 1972, on the ground that the ITO had no reason to believe that income chargeable to tax had escaped assessment and that the said proceeding either under Section 147 (a) or Section 147 (b) of the Act was illegal and without jurisdiction.

( 3 ) THEREAFTER, the respondent No. 1 read the said order of the Tribunal and submitted a report to the CIT for his permission to reopen the assessment under Section 147 (a) of the Act which was granted by the Commissioner. This report has been produced before me and in it the respondent No. 1 has stated that the memorandum and articles of association of the petitioner was not filed by the petitioner before the respondent No. 2 at the time of the original assessment or earlier. He has also stated that this document was filed only at the time of reassessment by the petitioner.

( 4 ) THE respondent No. 1 then issued the impugned notice by purporting to act under Section 147 (a) of the Act on the ground that he has reason to believe that by reason of the omission or failure on the part of the petitioner to disclose the memorandum and articles of association at the time of the original assessment the income chargeable to tax has escaped assessment.

( 5 ) MR. Suhas Sen, the learned counsel for the respondents, by relying on the decisions of the Supreme Court in the cases of S. Narayanappa v. CIT , Kantamani Venkata Narayana and Sons v. First Addl. ITO, Rajahmundry and Madhya Pradesh Industries Ltd. v. ITO, Nagpur [1970] 77 ITR 268, has argued that the above belief formed by respondent No. 1 cannot be questioned by the petitioner on whose behalf the decision of the Supreme Court in the case of Modi Spinning and Weaving Mills Co. Ltd. v. ITO , was cited to refute the above submission of Mr. Sen.

( 6 ) I do not propose to discuss the cases cited by Mr. Sen, for their Lordships of the Supreme Court have followed in these cases their own decision in the case of Calcutta Discount Co. Ltd. v. ITO , cited by Dr. Pal appearing for the petitioner. In this case it has been held that to confer jurisdiction under Section 34 of the Indian I. T. Act, 1922, the ITO must have reason to believe that the income, profits or gains chargeable to income-tax had been under-assessed and that he must have also reason to believe that such "underassessment" has occurred by reason of either, (i) omission or failure on the part of an assessee to make a return of his income under Section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year. There is no dispute between the learned counsel that the above law laid down by the Supreme Court also applies to Section 147 (a) of the I. T. Act, 1961.

( 7 ) NOW, Mr. A. K. Maitra, a director of another company, was the assistant accountant of the petitioner-company at the time the original assessment was made by respondent No. 2. Mr. Maitra has affirmed the petition by saying that the memorandum and articles of association of the peti- tioner was produced by him before respondent No. 2 at the time the original assessment was made by respondent No. 2 who was satisfied that the petitioner was a company in which the public were substantially interested and, accordingly, he had determined the tax at the rate applicable to the p