( 1 ) THE primary issue involved in this writ proceeding is the nature of power of the income-tax authorities under Section 281 of the Income-tax Act, 1961 (referred to hereafter as "the Act" ). The issue arises in the following manner : the petitioner claims to be a relative of one Vishwanath More who gifted a relief bond to the petitioner. The relief bond was for Rs. 2 lakhs bearing interest at nine per cent. per annum payable annually from July, 1988, and was repayable on July 1, 1993. Vishwanath More executed a document on July 27, 1988, which stated, inter alia :"that the transfer formalities of the said relief bonds could be completed only after receipt of the said bonds from the said bank. When I shall execute deed of gift and hand over possession of the said bond to Mrs. Preeti Rungta. That I have divested myself from all the title, rights and interest on the said bonds and Mrs. Preeti Rungta shall be the absolute owner from this date and no person whatsoever has any right, title and/or interest of any kind whatsoever thereon. "

( 2 ) UNDER cover of a letter dated April 11, 1989, addressed to the Reserve Bank of India, the petitioner enclosed the certificate o