JUDGMENT

Pathak, J. - The petitioner is a partnership firm carrying on business as bankers and cloth dealers. It had business dealings with B. R. Sons Ltd., at one time the selling agent of the Lakshmi Ratan Cotton Mills Company Ltd. In the course of those dealings the petitioner and B.R. Sons Ltd. maintained in their respective account books a running account of the transactions between them. On May 21, 1966, the Income Tax Officer issued a notice u/s 226(3)(i) of the Income Tax Act, 1961, to the petitioner stating that a sum of Rs. 22,89,281.97 was due from B. R. Sons Ltd. on account of Income Tax and allied dues and that the petitioner should forthwith pay to the Income Tax Officer any amount due to or held for B.R. Sons Ltd. up to the aforesaid amount. The petitioner was warned that if it failed to make payment it would be deemed to be an assessee in default and proceedings would be taken against it for realisation of the amount as if it were-in arrears of tax. On July 1, 1966, the petitioner replied that according to Us account books there was no credit balance in favour of B.R. Sons Ltd. and that, on the contrary, B.R. Sons Ltd. owed a large amount to the petitioner. On October 1, 1966, the Income Tax Officer requested the petitioner to file an affidavit in support of its contention that it did not owe any amount to B.R. Sons Ltd. Then, on December 14, 1966, the Income Tax Officer informed the petitioner that he had evidence to show that the petitioner still owed money to B.R. Sons Ltd. and he again directed the petitioner to make payment. The petitioner filed an affidavit sworn on December 22, 1966, by its accountant, one Shiv Kumar Arora, stating that as on May 24, 1966, the account of B. R. Sons Ltd. showed a debit of Rs. 76,436.23. The affidavit was accompanied by a letter which further stated that as on November 30, 1966, B.R. Sons Ltd. owed Rs. 1,06,244.82 to the petitioner. On December 31, 1966, the Income Tax Officer wrote to the petitioner pointing out that during the course of a search of Bihari Niwas (the address of the petitioner) account books in Hindi, Muriya and English pertaining to the year commencing July 1, 1965, had been seized, that according to the account of B.R. Sons Ltd. in the Muriya and English cash books payment amounting to Rs. 8,69,000 had been shown to B.R. Sons Ltd. while the original cash book in Hindi did not show any payment to that company and stated that from that material he had reason to believe that the affidavit was false in material particulars. The petitioner was held personally liable to the Income Tax Officer to the extent of its liability to B.R. Sons Ltd. on May 24, 1966, and was warned that if before January 10, 1967, the petitioner did not pay that amount it would be treated as an assessee in default u/s 226(3)(x) and recovery proceedings would be taken accordingly. In its reply of January 10, 1967, the petitioner reiterated its stand and relied on the affidavit. It further maintained that the cash books in English were the only authorised and regular books of the firm and there was no other rokar bahi of the firm. Thereafter, the Income Tax Officer, by his letter dated January 11, 1967, informed the petitioner that it was an assessee in default within the meaning of Section 226(3)(x) and coercive proceedings for realising the tax were now being taken. A copy of this letter was forwarded to the Tax Recovery Officer, Kanpur, for information and necessary action. On January 27, 1967, the Tax Recovery Officer issued an order to the petitioner under rule 48 of the Second Schedule to the Income Tax Act, 1961, attaching several immovable properties. On February 7, 1967, he issued a notice to the assessee for settling the sale proclamation in respect of the sale of immovable properties.

2. The petitioner has filed the present petition under article 226 of the Constitution praying for relief against the order dated January 11, 1967, of the Icome-tax Officer treating the petitioner a