1964 (4) TMI 118 - HC - Income Tax

Summary

Issues Involved:
1. Validity of notices served on K. Shivanna under section 148 of the Income-tax Act, 1961.
2. Validity of notices issued in the names of minor petitioners.
3. Question of reopening the assessment made on the petitioners.

Issue-wise Detailed Analysis:

1. Validity of Notices Served on K. Shivanna:

The court examined whether the notices served on K. Shivanna, a clerk of the petitioners' father, Nagappa, were in conformity with section 282 of the Income-tax Act, 1961. The procedure for service of notice is laid down in section 282, which allows service either by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908.

The court found that no notices were sent to the petitioners by post. Thus, it had to be determined if the notices served on K. Shivanna complied with the Civil Procedure Code. The relevant rules from Order V of the Civil Procedure Code were examined, particularly rules 9(1), 12, and 15.

- Rule 9(1): It was not established that K. Shivanna was an agent of the petitioners empowered to accept the notices.
- Rule 12: The revenue did not claim that it was impracticable to serve the notices on the petitioners or that the petitioners had an agent empowered to accept service.
- Rule 15: K. Shivanna could not be considered a member of the petitioners' family, and it was not claimed that the petitioners were absent.

The court concluded that the notices served on K. Shivanna were invalid as they did not meet the requirements of section 282(1) of the Income-tax Act or the relevant rules of the Civil Procedure Code.

2. Validity of Notices Issued in the Names of Minor Petitioners:

The court agreed with the petitioners' counsel that notices issued in the names of minors are invalid. Under the law, minors cannot sue or be sued directly; they must be represented by guardians or next friends. This position is supported by the decision of the Madras High Court in Ravith Bibi v. Agricultural Income-tax Officer, Dindigul [1964] 52 I.T.R. 471.

The court found that the notices issued to the minor petitioners were invalid, as they were not issued to their guardians.

3. Question of Reopening the Assessment:

Given the findings on the first two issues, the court did not find it necessary to pronounce on the third point regarding the reopening of the assessment. The court noted that the facts were undisputed: the petitioners in certain writ petitions were minors, and the notices were served on Shivanna, who was not an agent empowered to receive notices.

Conclusion:

The court allowed the petitions and directed the respondent not to proceed with the proceedings initiated against the petitioners based on the invalid notices issued under section 148 of the Income-tax Act. The court emphasized that an assessee is entitled to benefit from errors committed by the income-tax authorities and that there was no fraud played by the petitioners. The petitions were allowed without costs.