1963 (8) TMI 49 - HC - Income Tax

Summary

Issues:
Validity of notice under section 34 of the Indian Income-tax Act, 1922 and the legality of the assessment made pursuant to the said notice.

Analysis:
The case involved a reference under section 66(1) of the Indian Income-tax Act, 1922 for the assessment year 1946-1947, which was reopened under section 34. The original assessment was on an individual who had passed away. The notice under section 34 was issued to the deceased's son without explicitly stating that it was being issued to him as the legal representative of the deceased. The son contended that the notice was illegal as it was not served on him in his capacity as the legal representative. However, the Appellate Tribunal found that the son had filed a return on behalf of the deceased, acknowledging himself as the legal representative. The Tribunal considered this as a waiver of the defect in the notice, citing precedents from the Bombay High Court and the court's decision.

The question referred to the court was whether the notice under section 34 was issued according to law and if the assessment was properly made based on that notice. The court noted the difference of opinion between the Bombay High Court and itself, which was resolved by the Supreme Court's observations in a previous case. The Supreme Court emphasized that the service of a valid notice on the assessee is a prerequisite for any reassessment under section 34. If the notice is invalid or not served as required, the proceedings and subsequent orders of reassessment would be void and illegal. The court concurred with the Supreme Court's stance, stating that the notice in the present case was invalid, rendering the proceedings before the Income-tax Officer illegal and void. The court emphasized that the Income-tax Officer's jurisdiction to assess under section 34 is contingent upon the valid service of notice on the assessee.

In conclusion, the court held that the notice issued and served in this case was invalid, making the proceedings before the Income-tax Officer illegal and void. The court emphasized that the failure to provide the requisite notice deprived the Income-tax Officer of jurisdiction to assess under section 34. Therefore, the answer to the question posed was in the negative, and the respondent was directed to pay the costs of the reference.