Pratap, J.:— The short question—with, as I understand, no precedent thereon of this Court—arising for determination in this Article 226 petition is:

Can, in the matter of an assessee's completed and concluded assessments, a summons under section 131(1) of the Income Tax Act (for short, the Act) be issued against him without there being in existence before the officer issuing the same a pending proceeding?

2. Facts are but few and simple. The first petitioner is a partnership firm engaged in the business of general merchants, exporters and importers of agricultural and other products. The second petitioner is a partner of the first petitioner-firm. The first petitioner (hereafter the assessee) is assessed to income-tax, the financial/accounting year in that behalf being the Samvat Year.

3. The assessee submitted its Income-tax returns for the assessment years 1972-1973, 1973-1974 and 1974-1975. Of these, for the assessment years 1972-1973 and 1973-1974 assessment orders were passed on 21st March, 1975 and 14th April, 1975 respectively. Appeals against these orders and further appeals therefrom to the Income-tax Appellate Tribunal were all disposed of finally. For the assessment year 1974-1975 the assessee did not receive any assessment order. And after 31st Match 1977 assessment proceedings for the said year became time barred. The Department also seems to have accepted this position vide its communication dated 25th October, 1978 to the assessee.

4. Subsequently, in May 1980 the assessee received from the first respondent (hereinafter the respondent) summons under section 131 of the Act calling upon the assessee to furnish information, documents and books of accounts on various points specified therein in respect of Samvat Years 2027, 2028 and 2029 corresponding to the very assessment years aforesaid 1972-1973, 1973-1974 and 1974-1975. In reply thereto, it was submitted that assessments for the assessment years 1972-1973 and 1973-1974 were completed long back in March/April 1975 and assessment for the assessment year 1974-1975 had long back become time barred. Consequently, as no proceedings were pending, there was no question of any summons as the one issued. It was further submitted that in any event the books and record relating to the assessment years in question were actually in possession of the respondent ever since January 1974 (when the same were impounded and still not returned). The respondent was himself thus possessed of the information, documents and records called for. In the circumstances, clarification was sought as to qua which proceedings, therefore, the summons was issued and why.

5. The assessee then received a letter along with a fresh summons stating that section 131 can be invoiced even where no proceedings were pending and-

“the purpose of the information called for was with a view to investigate the information with me whether the above assessment should be reopened u/s 147 or not”

6. In default, the assessee was threatened with fine under section 131(2) of the Act. Hence this petition.

7. Counsel for the assessee submitted that a summons under section 131 of the Act in relation to any particular assessment year can be issued only if proceedings relating to that year are pending before the authority. Section 131 cannot be invoked merely for obtaining documents and/or information in the manner of a fishing enquiry and/or to ascertain if any action could, if at all, be taken in future or for merely exploring possibility, if any, of reopening a concluded assessment. In reply Counsel for the respondent contended that section 131 can be invoked not only qua pending proceedings but also in relation to proceedings in future of in contemplation hereafter as also for holding an enquiry of sorts to consider if reassessment proceedings should or should not be initiated. It was in the alternative, submitted that at the most no summons can be issued to the assessed before issuance of notice under section 148 of the Act but it can be issued against any person other than the assessee.

8. Now, it may at once be stated that the present being a case of section 131-summons specifically to an assessee, it is not necessary nor proper to consider the validity of such summons to one who is not an assessee. Observations in that respect would, after all, be obiter. The alternative plea for the respondent that section 131 can be invoked for summoning any person other than an assessee need not, therefore, detain us in these proceedings. The same is best left open.

9. To better appreciate the rival contentions on the main question, a look initially at section 131 would be useful:

“131(1) The Income-tax Officer Appellate Assistant Commissioner, Inspecting Assistant Commissioner, Commissioner (Appeals) and Commissioner shall, for the purposes of this Act, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908 (5 of 1908) when trying a suit in respect of the following matters, namely:—

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath;

(c) compelling the production of books of account and other documents; and

(d) issuing commissions.

(1A) If the Assistant Director of Inspection has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his jurisdiction, then, for the purpose of making any enquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section (1) on the income-tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income-tax authority.

(2) Without prejudice to the provisions of any other law for the time being in force, where a person to whom a summon is issued either to attend to give evidence or produce books of account or other documents at a certain place and time, intentionally omits to attend or produce the books of account or documents at the place or time, the income-tax authority may impose upon him such fine not exceeding five hundred rupees as it thinks fit, and the fine so levied may be recovered in the manner provided in Chapter XVIII-D.

(3) Subject to any rules made in this behalf, any authority referred to in sub-section (1) or sub-section (1A) may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act;

Provided that an Income-tax Officer or an Assistant Director of Inspection shall not—

(a) impound any books of account or other documents without recording his reasons for so doing, or

(b) retail, in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Commissioner therefor.”

10. Coming now to the main question supra, it will be noticed that the officers mentioned in section 131(1) viz. the Income Tax Officer, Appellate Assistant Commissioner. Inspecting Assistant Commissioner, Commissioner (Appeals) and Commissioner are conferred with the same powers as are vested in a Court under the Code of Civil Procedure when trying a suit. The Code of Civil Procedure confers upon Court powers for the exercise whereof existence of a suit or a proceeding is a sine qua non. Pari materia, therefore, power in respect of matters mentioned it a sub-section (1) of section 131 viz. (a) discovery and inspection; (b) enforcing the attendance of any person and examining him on oath; (c) compelling the production of books of account and other documents; and (d) issuing commissions can be exercised only if a proceeding is pending before the concerned officer and not otherwise. For the exercise of such power existence or pendency of a proceeding is therefore, a must. It is nobody's case here that when the respondent issued the impugned summons any proceeding against the assessee was pending before him. Indeed, there was no proceeding at all then pending. There was no occasion, therefore, for any summons (as the one here impugned) to the assessee.

11. Moving ahead, it also requires to be noted that in 1975 the Taxation Laws (Amendment) Act, 1975 introduced sub-section (1A) in section 131. Under this sub-section if the Assistant Director of Inspection has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his jurisdiction, then, for an enquiry or investigation relating thereto, it shall be competent for him to exercise powers conferred under sub-section (1) of section 131—

“notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income-tax authority.”

12. Absence or this non-obstante clause in section 131(1) is significant. Reading section 131(1) and section 131(1A) together, it is obvious that whereas an officer mentioned in sub-section (1) can exercise powers thereunder only if a proceeding is pending before him, the officer mentioned in sub-section (1A) viz. the Assistant Director of Inspection can exercise such powers notwithstanding that no proceedings are pending before him or before any other officer. Distinction has thus been clearly maintained between the conditions necessary for the exercise of powers by these two categories of officers viz. those in sub-section (1) and the one in sub-section (1A) of section 131. Before the former there must be a pending proceeding; before the latter that need not be so. Existence of a pending proceeding is condition precedent for the exercise of powers under section 131(1); there is no such condition precedent under section 131(1A). If powers of (a) the Assistant Director of Inspection under section 131(1A) and (b) the officers under section 131(1) were both to be regardless of whether proceedings are or are not pending, there was then no reason for a separate and different statutory provision section 131(1A) specifically for the Assistant Director of Inspection. Purpose could have been well served by including the said officer viz. the Assistant Director of Inspection in section 131(1) itself as was, indeed, done in the case of other officers such as Inspecting Assistant Commissioner by the Finance Act, 1965 and Commissioner (Appeals) by the Finance Act, 1977. Unlike, therefore, the Assistant Director of Inspection acting under section 131(1A), the officers mentioned in section 131(1) cannot issue summons without there being in existence a pending proceeding which admittedly was not so in the instant case.

13. Again, under sub-section (3) of section 131, any authority referred to in sub-section (1) or sub-section (1A) of section 131 may impound and retain in its custody any books of accounts or other documents produced before it in any proceeding under this Act (emphasis supplied). Further still, Explanation (2) to section 132 of the Act also indicates that but for its artificial and extended definition of the word ‘proceeding’, proceeding would mean one actually pending and not one completed end concluded. Also relevant to the context is the form of the summons (under section 131(1) of the Act) which commences with the words:

“Whereas your attendance is required in connection with the proceedings under the Income-tax Act in your case.”

14. Framed and prescribed at and since about the time section 131(1) was enacted, this form constitutes, in a sense, a contemporaneous exposition aiding and assisting a correct interpretation of section 131(1). The form also assumes and presupposes the existence of a pending proceeding before the concerned officer.

15. There is yet another infirmity invalidating the impugned summons. The officer (respondent No. 1) issuing it has himself disclosed the reason for doing so. His letter of 30th October, 1980 inter alia states:

“The purpose of the information called for was with a view to investigate the information with me whether the above assessments should be reopened u/s 147 or not.”

16. It is obvious thus that the officer has yet to come to a stage where he can, within the meaning of section 147, be said to have “reason to believe” that income chargeable to tax has escaped assessment. He is still at a pre-reason to believe stage. There is a vital distinction be ween the pre-reason to believe stage (stage 1) and the post-reason to believe stage (stage 2). The impugned summons here, as the above letter indicates, is at stage 1 viz. pre-reason to believe stage. Section 131(1) does not confer power to compel (i) attendance of the assessee or (ii) production of documents at this stage, indeed, stage 1 or the pre-reason to believe stage connotes a purely administrative function of a unilateral character. At this stage, the assessee does not come into the picture at all. It is not the object of this provision to even at this stage compel an assessee to appear and produce evidence before the officer. It is for the officer to first decide whether he has reason to believe. And only if he decides that question in the affirmative, can he then initiate proceedings under section 147 and only thereupon he becomes entitled to invoke section 131(1). “Reason to believe” is not the same as “reason to doubt” or “reason to suspect”. Difference between the two concepts is vital and substantial. If power under section 131(1) is held to be exercisable at any time and at any stage, proceeding or no proceeding, pending or not pending, instituted or not instituted and regardless of whether there is or there is not reason to believe, it may as well result in mischief and/or likely abuse and/or arbitrariness. A completed assessment is a valuable right. It cannot be lightly ignored nor can it, at the mere whim of the officer, be put into jeopardy. To permit such a course would be akin to permitting entry into the penumbra of speculative uncertainty. For reopening an assessment, the Act sets down stringent conditions. The same must first be fulfilled before issuing summons to the assessee. A request simpliciter to the assessee to assist without anything more and without any consequence in default may stand upon an altogether different footing than a summons under section 131(1) with penalty in default of compliance therewith. Such, however, is not the case here.

17. Coming now to the cited authorities, I may at the outset state that Counsel for the respondents was unable to invite this Court's attention to any decided case contrary to the rulings relied upon by Counsel for the assessee.

18. On the contention that powers under section 131 are co-extensive with those of a Civil Court and that the same governs only pending proceedings, reference was made to a Division Bench ruling of the Calcutta High Court in 1(D.L Brahmachari v. New Central Jute Mills Co. Ltd.), (1978) 112 I.T.R 568 at page 573.

“From a perusal of section 131 of the Income-tax Act, we are of the opinion, that the power of the Income-tax Officer under that section is co-extensive with that of a Court trying a suit under section 30 of the Civil Procedure Code, read with rules 12, 14 and 15 of Order 11 of the Code. Section 131 empowers the officers mentioned in the section to act for the purpose of the Act, but that cannot be the limitation set out under section 131 imposed upon the powers of the officers mentioned in the said section to act in the terms of the said section. All statutory bodies must act for the purposes of the statute even though the term ‘for the purposes of the Act’ be not expressly stated. Secondly, it appears to us that the statutory power cannot be exercised without application of mind as urged by Mr. R.C Deb appearing on behalf of the respondent. If such powers are granted then such powers would be so naked that the section itself would become ultravires. Application of mind must be in regard to the question of relevancy of the documents to the lis involved in the matter before the Income-tax Officer. A Civil Court cannot order discovery, production or inspection of documents until it is of the opinion that such documents are relevant for the purpose of the issues involved in the suit pending before it. Similarly, it seems to us that the officers mentioned in section 131 of the Income-tax Act have been vested with powers to make the orders as mentioned therein provided they are satisfied that the orders made would be relevant for the purpose of deciding the case pending before them. If we hold otherwise we would be holding that section 131(1) has conferred naked and arbitrary powers upon such officers which would make the section itself liable to be struck down.”

19. On the meaning of the expression ‘proceeding’ and in support of the contention that pre-belief stage enquiry was only an administrative function, reference was made to a Division Bench ruling of the Calcutta High Court in 2(Competent Authority I.A.C v. Smt. B.R Choudhury), (1981) 131 I.T.R 578 at page 585:

“Under sub-section (1) of section 269c, before initiating proceedings for the acquisition of any immovable property which has been transferred, the competent authority must have reason to believe in regard to four matters, namely, (i) the immovable property has a fair market value exceeding Rs. 25000/-, (ii) the apparent consideration is less than such fair market value by more than 15% of the apparent consideration, (iii) the consideration as agreed to between the parties has not been truly stated in the instrument of transfer, and (iv) such untrue statement has been made with the object of evasion of taxes as mentioned in clauses (a) and (b). Sub-section (1) consists of two stages, the first one is for the formation of belief by the competent authority and the second one is for the initiation of proceedings. The second stage is dependent on the first. In other words, if there be no reason to believe in regard to the four matters specified above, there is no question of initiation of proceedings. It, therefore, follows that in the first stage there is no proceeding, but it relates to preparation for the initiation of proceedings. The boundary between the first stage and the second stage is the existence of materials on the basis of which the competent authority may form his belief and, in order to reach the second stage for the purpose of initiating proceedings for acquisition, the boundary has to be crossed. The presumption under sub-section (2) of section 269c can be made in any proceedings under Chapter XX-A under which section 269C has been placed. So the presumption is applicable to any proceeding that may be initiated at the second stage under sub-section (1) of section 269C. It will have no application at the first stage when the competent authority forms his belief on the basis of materials available to him for the simple reason, as stated already, that the first stage is preparatory to the initiation of a proceeding which is yet to be initiated. Really, in the first stage, the competent authority discharges some administrative functions in the matter of formation of belief on the subjective satisfaction on the basis of certain materials. When, however, a proceeding is initiated, he proceeds judicially.”

20. The above ruling of the Calcutta High Court was in appeal against—and affirming—a learned Single Judge's judgment reported in (1978) 112 I.T.R 111. This latter judgment was followed by this Court in 3(Unique Associates Co-operative Housing Limited v. Union of India), (1985) 152 I.T.R 114. And appeal against the same was, I am so told at the Bar, dismissed in limine by a Division Bench of this Court.

21. In support of the contention that Income-tax Officer has no right to make a preliminary enquiry before issuing notice under section 34 (same as section 147 of the present Act), and the assessee is not bound at this stage to produce his books or give any information or explanation, reliance was placed on a Division Bench ruling of the Allahabad High Court in 4(Gaya Ram Gabbu Lal v. Commissioner of Income Tax, U.P and Ajmer-Merwara), (1951) 19 I.T.R 114, which at page 121 holds thus:

“Income-tax Officer has no right to make a preliminary enquiry before issuing notice under section 34 and the assessee is not bound at that stage either to produce his books or to give any information or explanation. But if in the course of the performance of his usual duties, while assessing the income of other assessees or for other years of the assessee himself, definite facts come to the knowledge of the Income-tax Officer, which relate to year about which the assessment has already been concluded, the Income-tax Officer is not bound to shut his eyes to them nor is it necessary that when the Income-tax Officer gets some information he should not verify the correctness thereof or trace it out further so long as he can do it without calling upon the assessee either to supply him with facts or explanations or produce his book. Within those limits he may inform himself. Before notice can be issued the Income-tax Officer must be satisfied, and the satisfaction must be that of a reasonable man, (i.e, the definite information in his possession should lead to the conclusion) that income has escaped assessment.”

22. This principle has in substance been accepted also by the Calcutta High Court (per Sabyasachi Mukharji, J., as His Lordship of the Supreme Court then was) in 5(Prahladrai Agarwalla v. Income-tax Officer ‘E’ Ward District (1) Calcutta), (1973) 87 I.T.R, 655 at page 659:

“The correct position seems to me that the Income-tax Officers in particular cases have the right and indeed the duty to investigate. Such investigations might be done from all sources including the assessee. He cannot, however, in my opinion, compel the assessee to produce any evidence before a notice under section 148 has been issued. The notice of the 25th May, 1967, has to be judged in that light. I am of the opinion that there is no power on the part of the Income-tax Officer to compel the assessee to produce the particulars or to ask him to show cause why the assessment should not reopened.”

23. Such then being the emerging position on the authorities as also de hors the same it is but proper that in matters relating to income-tax, judicial interpretation is, as far as possible, consistent and uniform qua different High Courts. In this respect the general policy of the High Court has been as per the Division Bench ruling in 6(Commissioner of Income Tax, Bombay City v. Chimanlal J. Dalal & Co.), (1965) 57 I.T.R, 285 at page 290:

“Barring some exceptions, it has been the general policy laid down by this Court in income-tax matters that whatever our own view may be, we should follow the view taken by another High Court on the interpretation of a section. Chagla, C.J, though he disagreed with the view taken by the Madras High Court, followed that view in (Maneklal Chunilal & Sons Ltd. v. Commissioner of Income-tax. At page 385 of the report, Chagla, C.J, observed:

‘A Special Bench of the Madras High Court has taken the view favourable to the Commissioner and contrary to the view suggested by Mr. Palkhivala and in conformity with the uniform policy which we have laid down in income-tax matters, whatever our view may be, we must accept the view taken by another High Court on the interpretation of the section of a statute which is an all India statute’.

This is the practice of this Court, and as we have already stated, it has been generally followed by this Court, barring certain exceptions like where inadvertently the decision was not brought to its notice or where in the decision of the other Courts some relevant provision of law had been omitted to be considered.”

24. Similar in substance are the observations of another Division Bench of this Court in 7(Amarchand Agarwal v. Union of India), (1983) 142 I.T.R 410 at page 412:

“As far as this High Court is concerned, it is well settled that for the purposes of construing and applying central enactments, in particular Tax Acts such as the I.T Act, 1961, the High Court should as far as possible accept the decisions given on similar points by other High Courts.”

25. In all the circumstances, therefore, my answer to the question formulated at the commencement of this judgment is in the negative. It follows then that the first respondent had at this stage no authority in law to invoke section 131(1) of the Act against the assessee. He had consequently no power to issue the impugned summonses. The same have no sanction of law. These summonses are as good as non est and, no challenge, liable to be quashed.

Hence order:

20(a) This petition thus succeeds and the same is allowed. The impugned summonses dated 8th May 1980 (Exhibit A) and 30th October 1980 (Exhibit D) are both set aside and quashed.

(b) Rule is made absolute in terms of prayer (a) of the petition but, in the circumstances, with no order as to costs.

Rule made absolute.