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JUDGMENT Khanna, J.-The question that has been raised in this petition is whether the Income-tax Officer can reject the explanation of an assessee in respect of any sums found credited in his books, on the ground that the nature and source of the said sum in the hands of the depositor in whose name the credit stands, has not been satisfactorily explained merely by the said depositor having declared it as his income in pursuance of the voluntary disclosure scheme set out in the Finance (No. 2) Act of 1965 (XV of 1965). The petition has been filed by three petitioners. Messrs. Jain Brothers, a partnership firm, is petitioner No. 3 and consists of two partners, Rattan Lal, petitioner No. 1, and Khazanchi Lal, petitioner No. 2. The firm is being assessed in the status of a registered firm under section 184 of the Income-tax Act, 1961, herein called "the 1961 Act", while petitioners Nos. 1 and 2 are being assessed in the status of individuals. The Income-tax Officer has been impleaded as respondent No. 1, while the Additional Commissioner of Income-tax is respondent No. 2. The Commissioner of Income-tax is respondent No. 3 and the Chairman, Central Board of Direct Taxes, is respondent No. 4. During the assessment year, ending on March 31, 1967, the petitioners filed returns of their income under section 139 of the 1961 Act. The Income-tax Officer, respondent No. 1, completed the assessments under section 143 of the 1961 Act and while framing the assessment of petitioner No. 3 added back a sum of Rs. 30,000 as income from undisclosed sources. This sum related to three credits standing in the firm's books in the names of Narinder Kumar Jain, son of Rattan Lal, petitioner No. 1 (Rs. 10,000), Smt. Dil Behari Jain, wife of Rattan Lal (Rs. 15,000), and Smt. Chandravati Jain, wife of Khazanchi Lal, petitioner No. 2 (Rs. 5,000), as loans advanced to the firm. On being asked, the petitioners explained that these amounts belonged to the aforesaid three creditors or depositors, which had been duly declared by them under the voluntary disclosure scheme under the Finance Act and income-tax has been paid in respect thereof and that these amounts were later deposited by the…

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