The power of the Income-tax Officer under Section 131 of the Income-tax Act, 1961, to issue a notice for discovery and production of evidence can only be exercised if a proceeding is pending before him.

( 1 ) BEING aggrieved by issuance of a notice under Section 133 (6) of the Income tax Act, 1961, and a notice under Section 131 of the Income-lax Act, a writ petition was tiled before this court. By a judgment and order dated August 19, 1980, Mr. Justice Samarendra Chandra Deb, as his Lordship then was, was pleased to quash and set aside the notice under Section 131 issued by the Income-tax Officer and made the rule absolute, Therefrom the present appeal has been preferred by the Income-tax Officer, 'h' Ward, Companies, District IV, Calcutta. The only point which calls for determination in this appeal is whether the Income-tax Officer was justified in issuing a notice under Section 131 of the Income-tax Act. So far as the notice under Section 133 (6) of the said Act is concerned inasmuch as the said notice was addressed to the Grindlays Bank Ltd. 's principal officer in a separate proceeding the bank challenged the said notice. The rule in the said writ proceeding was made absolute in favour of the bank. No appeal had been preferred therefrom by the Income-tax Department. Under the circumstances, the learned trial court was only concerned with the notice that was served upon one J. J. O'gorman. From the said notice, it appears that the Income-tax Officer, 'h' Ward, C-IV, had issued the said notice in relation to the assessment year 1969-70. Admittedly, when such a notice was issued, no proceeding was pending in respect of the said assessment year. The said notice directed the writ petitioner to furnish particulars about the daily leave allowance and entertainment expenses. The Income-tax Appellate Tribunal after carefully considering the facts of the case and the rival arguments held that any allowance paid to the employee would be chargeable to tax in his hands and if an entertainment allowance is paid to an employee, it had to be included in the employee's taxable income. It was further held that if, in course of its business, the customers or other persons connected with the bank's business were entertained, such entertainment had to be through the officers of the bank and the officers having entertained some customers on behalf of the bank got reimbursed those expenses and such reimbursement could not constitute any benefit or perquisite in the hands of that officer. In spite of such finding by the Tribunal and in spite of the reference made to the High Court having been rejected, the Income-tax Officer also called for particulars of such entertainment expenses and allowances while considering the income of the assessee concerned. It appears that Section 131 of the Income-tax Act provides power regarding discovery, production of evidence, etc. In Sub-section (1) of Section 131, it has been specifically provided that the Income-tax Officer, Appellate Assistant Commissioner, Inspecting Assistant Commissioner, Commissioner (Appeals) and Commissioner shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters; namely :-- (a) discovery and inspection ; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath ; (c) compelling the production of books of account and other documents ; and (d) issuing commissions.

( 2 ) FROM a plain reading of the said section, it appears that the persons mentioned in the sub-section are vested with powers of a court as provided under the Code of Civil Procedure. Order XI of the Code of Civil Procedure empowers a court of discovery and inspection under various Rules of the Order and those rules are only applicable and could be exercised by a court in a pending suit. Under the circumstances, when similar powers have been given to the authorities concerned, as mentioned in Section 131 (1) of the Income-tax Act, as it has been given under the Code of Civil Procedure to a court, unless there was a proceeding pe