The Income-tax Officer has jurisdiction to issue a notice under section 148 of the Income-tax Act, 1961, even after the Appellate Assistant Commissioner had finalised the assessment, if the Income-tax Officer has reason to believe that income chargeable to tax has escaped assessment and the information in his possession was not before the Appellate Assistant Commissioner.

I.S.TIWANA, J.

1. The petitioner company, admittedly a 100% subsidiary of Oriental Carpet manufacturers (London) Ltd. impugns the notice dated March 27, 1976 (annexure P-1), purported to have been issued to it under section 148 of the Income-tax Act, 1961(for short "the Act"). It carries on the business of manufacturing and dealing in woollen and worsted fabrics, blankets, shawls, woollen and worsted yarns and carpets in Amritsar District. Its assessment of tax under the Act (section 143(3)) for the year 1967-68 was finalised by the Income-tax Officer, Amritsar, on October 14, 1968. It concededly was assessed at a lower rate of tax on account of the fact that it was a company in which the public was substantially interested within the meaning of section 2(18) of the Act or was a widely held company. Thereafter, the Income-tax Officer served it with a notice dated March 25, 1970, under section 148 of the Act and it filed its return under protest. During these reassessment proceedings, the Income-tax Officer, vide his order dated March 22, 1971 (annexure P-4), came to the conclusion that the word "public" as occurring in section 2(18) of the Act was confined to the Indian public and not to the entire mankind and thus even if it were to be accepted that O.C.M. Ltd., London, was a widely held company in which the public were substantially interested, that would not entitle the petitioner to be given a special treatment or to be assessed at the reduced rate of tax. This order of the Income-tax Officer was primarily based on another order of assessment pertaining to the petitioner for the assessment year 1966-67. The petitioner successfully impugned these orders of the Income-tax Officer before the Appellate Assistant Commissioner, who, disagreeing with the above-noted reasoning of the Income-tax Officer, canceled the said assessment orders. Still later, the petitioner was served with the present impugned notice, annexure P-1. It has been issued on the ground that the authorities under the Act have reasons to believe that the income of the petitioner for the assessment year 1967-68 had escaped assessment within the meaning of section 147 of the Act and it was proposed to reassess the same. The petitioner has been asked to deliver its return in the prescribed form. It has also been mentioned in this notice that the same was being issued by the Income-tax Officer after obtaining the necessary satisfaction of respondent No. 3, i.e., the commissioner of Income-tax, Amritsar. The petitioner, through its different communications, annexures P-6, P-7 and P-8, protested to the Income-tax Officer that the impugned notice had been issued without any basis as it had disclosed fully and truly all the material facts in its earlier return and in the absence of disclosure of any reasons or any other information, the respondent-Income-tax Officer could not proceed to reframe assessment against it. In reply to the above-noted communications, though the Income-tax Officer persistently asked the petitioner to disclose the list of the shareholders of its parent company, i.e., O.C.M. (London) Ltd., yet, vide letter dated November 13, 1979, respondent No. 2, i.e., the Inspecting Assistant Commissioner, Amritsar, informed the petitioner as follows :

"Enclosed please find certain extracts from the correspondence that passed between the auditors (M/s. Ford, Rhodes & Parks, Calcutta) and the management of the parent company, M/s. O.C.M., London (later known as M/s. Ralli International, London), inasmuch as the fact that it is a widely held company is not established. From the extracts, it will be seen that certain vital information revealing the nature of the shareholdings of the parent company was suppressed bef of the assessee : (a) either to make a return under section 139 for any assessment year, or

(b) to disclose fully and truly all material facts necessary for the assessment, income chargeable to tax has escaped assessment. According to the pet