3019.txt

The current document is an appeal by a partnership firm against the dismissal of their writ petition by the Patna High Court. The firm's income tax return was asked to be produced during an assessment proceeding, and they provided a statement listing creditors from whom they had borrowed on hundis during the accounting year in question. The Income Tax Officer (ITO) issued a notice under section 148 of the Indian Income Tax Act, 1961, proposing to reassess the firm's income for the assessment year 1960-61. The firm challenged the validity of the notice, arguing that it did not satisfy the requirements of section 151(2) of the Act, as the ITO had not recorded reasons for issuing the notice. The High Court dismissed the firm's petition, but the Supreme Court accepted the firm's contention that the notice was invalid due to the lack of reasons. The Supreme Court also criticized the ITO and the Commissioner for not fulfilling the requirements of sections 147 and 151(2) and for treating the duties imposed by these sections as of little importance. The appeal was allowed, and the impugned notice was quashed. The respondent was ordered to pay the costs of the appellant in both the Supreme Court and the High Court.