P. Shanmugam, J.
1. The petitioner is an assessee under the Income-tax Act, 1961. A notice issued under Section 158BD of the Act by the Assistant Commissioner of Income-tax, Investigation Circle, Kottayam, is challenged in this writ petition.
2. Learned senior counsel, Mr. Ramachandran, made two submissions. According to him, the third respondent has no jurisdiction in the matter. He submits that exhibit R-3(A) notification enabling the Assistant Commissioner of Income-tax, Investigation Circle, to exercise jurisdiction for the connected cases/persons also, cannot apply to the case of the petitioner. The petitioner is an independent assessee and her case cannot be said to be connected with the assessment of her husband, Mr. M. K. Thankachan. The expression 'connected case' has no legal connotation and, therefore, unless the Assistant Commissioner records his satisfaction that undisclosed income belongs to the petitioner, he cannot proceed with the assess ment.
3. Learned senior standing counsel, Mr. Raveendranatha Menon, while countering the said argument has submitted that Section 127(3) is the direct answer to the point raised on behalf of the petitioner. According to this provision, no opportunity need be given to the assessee for a transfer from any Assessing Officer to any other Assessing Officer if the offices of all such officers are situated in the same city/locality or place. In this case, the file has been transferred from the Income-tax Officer, Ward-3, Kottayam, to the Assistant Commissioner of Income-tax, Investigation Circle, Kottayam. Exhibit R-3(A) notification empowers the Assistant Commissioner of Income-tax, Investigation Circle, having jurisdiction over the persons where action under Section 132 has been carried out, jurisdiction over connected persons also. Section 158BD of the Act authorises to proceed against any person other than the person with respect to whom search was made under Section 132 of the Act, if the officer is satisfied that any undisclosed income belongs to him or her. In the light of large volume of undisclosed income out of bank accounts in the name of the petitioner, the Assessing Officer has reasons to proceed under Chapter XIV-B of the Act. Hence, no opportunity need be given to the petitioner before such transfer.
4. The second and the main submission on behalf of the petitioner is that Chapter XIV-B is a special procedure for assessment of search cases and, therefore, a notice cannot be issued unless the Assessing Officer is objectively satisfied that the undisclosed income belongs to the petitioner. According to him, exhibit P-1 assessment order in reference to Mr. M.K. Thankachan, the husband of the petitioner, clearly admits that the bank accounts in the name of the petitioner is the undisclosed income of Mr. Thankachan in which case it is not open to the officer to come to the conclusion that the undisclosed income belongs to the petitioner. He also derives support from the statement filed on behalf of the respondents to the effect that no cash or jewellery was seized, but only certain records were seized from the premises as per panchanama. It is also stated that it is true that in the said assessment order it is observed that the bank accounts of the petitioner and the minor children are out of undisclosed income of her husband, Shri Thankachan. In the light of the specific stand of the Department, learned senior counsel submits that this special provision which deprives the assessee's statutory rights for an appeal and sufficient time, etc., should be strictly construed and there should be satisfaction of the Assessing Officer that the undisclosed income belongs to the petitioner. If so construed, the notice issued cannot stand the scrutiny of such satisfaction.
5. In reply, learned standing counsel submitted that it is true that theassessment order proceeded against the petitioner's husband to the effectthat the undisclosed bank accounts in the name of the petitioner is out ofthe undisclosed income of the assessee himself as the wife of Mr. Thankachan. The said order was passed because, Thankachan could not explainthe source of such bank account. Thankachan has gone in appeal. Until thematter reaches finality, the Department has to proceed as a protectiveassessment which is followed as a general practice. In support of his contention, he has referred to a decision of the Supreme Court in ITO v.Bachu Lal Kapoor : [1966]60ITR74(SC) . Their Lordships while holding that insuch circumstances, in reality, it is to arrive at the correct figure, observedas follows (page 80) :
'It was then forcibly brought to our notice that the said view would be subversive of the doctrine of 'double taxation'. It was said that as the orders of assessment on the individual members of the said family had become final, if the Income-tax Officer was permitted to assess the Hindu undivided family for the same assessment year, tax would be imposed on the same income twice over. It is true that the Act does not envisage taxation of the same income twice over 'on one passage of money in the form of one sort of income'. It is equally true that Section 14(1) of the Act expressly debars the imposition of tax on any part of the income of a Hindu undivided family received by its members. The fact that there is no provision in the Act dealing with a converse position does not affect the question, for the existence of such a converse position is legally impossible under the Act. So long as the Hindu undivided family exists, the individuals thereof cannot separately be assessed in respect of its income. None the less, if, under some mistake, such income was assessed to tax in the hands of the individual members, which should not have been done, when a proper assessment was made on the Hindu undivided family in respect of that income, the. Revenue had to make appropriate adjustments ; otherwise, the assessment made in respect of that income on the Hindu undivided family would be contrary to the provisions of the Act, particularly Section 14(1) of the Act. We, therefore, hold that if the assessment proceedings initiated under Section 34 of the Act culminate in the assessment of the Hindu undivided family, appropriate adjustments have to be made by the Income-tax Officer in respect of the tax realised by the Revenue in respect of that part of the income of the family assessed on the individuals of the said family. To do so is not to re-open the final orders of assessment, but in reality to arrive at the correct figure of tax payable by the Hindu undivided family.'
6. Learned senior counsel also submitted that the Department may not insist on the recovery of the tax related to such undisclosed income in the case of the petitioner until the matter reaches finality.
7. Exhibit P-2 notice calls upon the petitioner to prepare a true and correct return of a total income for the block period under Section 158B of the Act. The petitioner has filed her objection, and filed this original petition thereafter. According to the stand of the Department, since the Assessing Officer was satisfied that the undisclosed income belongs to the petitioner, assessment was made under Section 232 (sic) of the Act and notice under Section 158BD was issued. The total undisclosed income out of the various bank accounts standing in the name of the petitioner amounts to Rs. 1,15,23,005. The petitioner has not furnished the details called for in reference to them. As the petitioner's husband, M. K. Thankachan, has not explained the source of the money standing to the credit of the petitioner, the Assessing Officer had, issued a notice under Section 158BD. On the face of it, the amounts stood to the credit of the petitioner and that the petitioner's husband did not explain the source, the Assessing Officer's satisfaction that it belongs to the petitioner and that the issuing of notice cannot be faulted. Therefore, the said satisfaction cannot be held to be without any basis.
8. As rightly pointed out by counsel for the respondent, the Department has to safeguard the interests pf the Revenue and inasmuch as the petitioner's husband has gone in appeal and no finality has reached, the proceedings against the petitioner has to be taken in the facts and circumstances of the case.
9. Therefore, I do not find any grounds warranting interference with the initiation of proceedings under Section 158BD. For all these reasons, the original petition is liable to be dismissed. The original petition is accordingly dismissed.