( 1 ) IN this petition under Article 226 of the Constitution, the petitioner has prayed for a writ of certiorari or any other appropriate writ for quashing the notice dated 29. 8. 2000 (Annexure "a") under Section 158 BD of the Income-tax Act, 1961 (hereinafter referred to as "the Act") issued by the Joint Commissioner of Income-tax, Special Range-2, Rajkot, the sole respondent herein.

( 2 ) THE facts leading to filing of this petition, briefly stated and as averred by the petitioner, are as under :-2. 1 the petitioner is engaged in the business of ship breaking at Alang, District Bhavanagar. In the course of its regular business, the petitioner sells materials to various parties from time to time and its purchasers at times pay cash or at times by their own cheques drawn on their own bank accounts or at times the cheques are obtained from other concerned persons with whom they may have transactions. The petitioner is concerned with realization of the sale price whether the payment is made by one mode or the other. The petitioners accounts are audited under the Income-tax Act as well as under the Companies Act. The search was initiated under Section 132 of the Act in the case of M/s Mahendra S. Shah and Hemant C. Shah and their group concerns. These persons are not in any way connected with the petitioner and the petitioner does not have dealings with them by way of sale of goods or even otherwise. The said persons (hereinafter referred to as "the raidees") are engaged in the business of finance in the name of their various concerns, but the petitioner had not received any cheque issued by them at the instance of the purchasers of materials from the petitioner or even otherwise. It is further averred by the petitioner that the raidees might have made deposits with the petitioner but such deposits are by cheque, repayment is by cheque, interest payment is by cheque. The petitioner had deducted tax from interest. It is also the case of the petitioner that the deposit, interest payment, TDS and repayments are all shown in the books of accounts of the petitioner and that the petitioner has no other dealings with the raidees. On 29. 8. 2000, the Joint Commissioner of Income-tax, Special Range - 2, Rajkot, the respondent herein, issued notice under section 158bc read with Section 158bd of the Act stating that on perusal of the records of search proceedings in the cases of M/s Mahendra S. Shah and Hemant C. Shah and other group cases, the respondent was satisfied that undisclosed income belongs to the petitioner also and, therefore, the petitioner is required, in pursuance of the provisions of Section 158bc (a) (ii), to furnish the return in the prescribed form setting forth the petitioners total income including the undisclosed income for the block period between 1. 4. 1989 and 7. 12. 99. 2. 2 the petitioner has raised the following contentions in the petition :- (I) There are no facts which entitle the respondent to issue notice under Section 158bd, the condition precedent for which is satisfaction of undisclosed income belonging to any person other than the raided person. (II) The authorities have not come across any books of accounts, documents or assets belonging to the petitioner which would indicate that the petitioner had any undisclosed income. The condition precedent for applying Section 158bd is not satisfied. (III) All the transactions such as deposits, interest payments, TDS and repayments are duly and correctly recorded in the books of accounts of the petitioner which are audited and these are the only transactions of the petitioner with the raidees.

( 3 ) IN response to the notice, affidavit in reply is filed by Mr Harsh Prakash, Joint Commissioner of Income-tax, Rajkot, the respondent herein, stating as under :-"search and seizure action was carried out in the case of Shri Mahendra Himatlal Shah and Shri Hemant C. Shah, Bhavnagar u/s. 132 of the I. T. Act on 17. 12. 99. During the course of search pro