1998 (4) TMI 32 - HC - Income Tax

Summary

Issues Involved:
1. Validity of service of notice u/s 148.
2. Validity of reassessment proceedings u/s 147.

Summary:

1. Validity of Service of Notice u/s 148:
The Tribunal recorded that the notice u/s 148 was served and acknowledged by an individual whose signature was not legible. The Tribunal found that similar notices under sections 210, 273, and 274 were served on the same individual and complied with. The Tribunal concluded that there was no exclusive agent, and multiple persons were acting as agents for the assessee. The Tribunal also noted that the assessee's representative requested time to file the return without objecting to the validity of the notice service. The Tribunal held the service of notice under section 148 as valid, referencing Order 5, Rule 12 of the Code of Civil Procedure, which allows service on an agent empowered to accept service. The Tribunal found that the assessee did not establish that the recipient of the notice was unauthorized. The Tribunal's decision was supported by cases such as CIT v. Bhanji Kanji's Shop [1968] 68 ITR 416 (Guj), Mahendra Kumar Agrawalla v. ITO [1976] 103 ITR 688 (Patna), and Dr. H. R. Rai v. CIT [1984] 145 ITR 809 (MP), which held that participation in reassessment proceedings without objection validated the service of notice.

2. Validity of Reassessment Proceedings u/s 147:
The Tribunal upheld the reassessment proceedings under section 147, finding that the credit entry of Rs. 50,000 on December 26, 1973, was unexplained. The Tribunal noted that there was no corresponding debit entry in the foreign firm's books and that the Income-tax Officer's enquiry with the bank revealed no remittance from abroad. The Tribunal concluded that the sum of Rs. 50,000 was assessable under the head "Other sources" as the assessee failed to provide a satisfactory explanation. The Tribunal's decision was supported by the finding that the reassessment notice was validly served, and the assessee's participation in the proceedings without raising objections further validated the reassessment.

Conclusion:
The Tribunal's decision was upheld, affirming that the notice under section 148 was validly served and the reassessment proceedings under section 147 were justified. The addition of Rs. 50,000 was deemed correct, and both questions of law were answered in the affirmative and against the assessee.