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Issues Involved:
1. Validity of the notice under Section 34 addressed to a dissolved firm. 2. Validity of the service of the notice by affixing it on the premises. Issue-Wise Detailed Analysis: 1. Validity of the Notice Under Section 34 Addressed to a Dissolved Firm: The petitioner argued that the notice under Section 34 addressed to M/s. Motilal Somani & Co., a dissolved firm, was invalid. The petitioner contended that the notice should have been addressed to the partners who were partners at the relevant time for the assessment year 1949-50, as the dissolved firm was not liable to assessment. The court examined Section 26 of the Income-tax Act, which deals with changes in the constitution of a firm and succession in business. It was found that the business of M/s. Motilal Somani & Co. continued despite changes in the firm's constitution and was ultimately taken over by the petitioner as a sole proprietor. Therefore, the court held that there was a succession within the meaning of Section 26(2). The court further analyzed Section 34, which allows reopening of assessments if income has escaped assessment due to the assessee's omission or failure. The court stated that the relevant assessee for the purpose of Section 34 was the firm M/s. Motilal Somani & Co., as the income that escaped assessment was the firm's income for the assessment year 1949-50. Hence, the notice under Section 34 was validly addressed to M/s. Motilal Somani & Co. The petitioner also argued that Section 44, which deals with the discontinuance of business by a firm, should apply, making the partners liable for assessment. However, the court found no discontinuance of business, as the petitioner continued the same business as a sole proprietor. Thus, Section 44 was not applicable. The court concluded that the notice under Section 34 was valid both under Section 34 and Section 26(2), and the Income-tax Officer had jurisdiction to proceed with the assessment. 2. Validity of the Service of the Notice by Affixing it on the Premises: The petitioner contended that the service of the notice by affixing it on the premises was invalid. The court examined Section 63 of the Income-tax Act, which allows service of notices either by post or as if it were a summons issued by a court under the Code of Civil Procedure. The court noted that several attempts were made to serve the notice personally on the partners, including the petitioner, but were unsuccessful due to the lack of cooperation in providing addresses. The court referred to Order V, Rule 17 of the Code of Civil Procedure, which allows affixing a copy of the summons on the outer door or a conspicuous part of the house if the serving officer cannot find the defendant after using due diligence. The affidavits of the Income-tax Department's employee, Thade, stated that he took all reasonable steps to find the partners' addresses and, failing that, affixed the notice on the premises, which was the last known address of the firm and where the petitioner was carrying on business. The court held that the service was in accordance with the provisions of the Code of Civil Procedure and was valid. Conclusion: The court dismissed the petition, holding that the notice under Section 34 addressed to the dissolved firm was valid, and the service of the notice by affixing it on the premises was also valid. The petitioner was ordered to pay the costs of the petition.
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