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Judgment
These petitions are directed against the Income Tax Officer for a writ of prohibition preventing him from proceeding further with the proceedings
initiated by him u/s 34 of Income Tax Act.
The first complaint of the petitioner is that the reasons which satisfied the Commissioner for sanctioning the proceedings u/s 34 of the Act were
not communicated to him, and, therefore, the proceedings are void.
The scheme of Section 34 of the Act is that, if the conditions of the main section are satisfied, a notice has to be issued to the assessee containing
all or any of the requirements which may be included in a notice under Sub-section (2) of 3. 22. But before issuing the notice, the proviso requires
that the officer should record his reasons for initiating action u/s 34 and obtain the sanction of the Commissioner who must be satisfied that the
action u/s 34 was justified. There is no requirement in any of the provisions of the Act or any section laying down as a condition for the initiation of
the proceedings that the reasons which Induced the Commissioner to accord sanction to proceed u/s 34 must also be communicated to the
assessee. The requirement regarding the communication of the reasons to the Commissioner is, in our opinion, intended to safeguard the interests
of the assessee against any hasty action on the part of the Income Tax Officer u/s 34 or an action without any justification. It is not intended by the
proviso that the reason should be communicated to the assessee. The satisfaction mentioned is the satisfaction of the Commissioner, and the
adequacy of the reasons is not a matter for consideration of the court, and it is not open to the assessee to agitate the question, that the reasons
were inadequate to sanction the initiation of the proceedings u/s 34 by the Commissioner.
The second point taken is that, even before issuing the notice under the section, the Income Tax Officer must make up his mind that he is going
to limit the assessment for a period of four years or eight years, and the notice Itself must clearly state the period for which reassessment would be
made. We do not construe the section in the manner suggested. All that the section requires is that the notice must be issued and the assessment
under Sub-section (3) of Section 34 is restricted to a period of four years in cases falling under Clause (b) of Section 34 & to eight years in cases
falling under Clause (a) of Sub-section (1), Section 34. It is, therefore, in our opinion, not necessary in the notice itself at the initial stage to indicate
whether the action is to be confined to a period of eight years or four years. After all the facts are investigated, it will be open to the Income Tax
Officer to make up his mind, having regard to the findings reached by him, whether the assessment should be restricted to eight years or four years.
It is not necessary for him even at the initial stage to indicate the period for which the assessment is going to be reconsidered.
These are the only two points that have been raised before us and we see no reason to issue a writ of prohibition as prayed for. The petitions
are dismissed with costs in one, W. P. No. 63 of 1953, Rs. 250.