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Issues Involved:
1. Validity of service of notices under section 147(a) of the Income-tax Act, 1961, and section 34(1)(a) of the Indian Income-tax Act, 1922. 2. Validity of reassessment orders if the service of notices is deemed invalid. Issue-wise Detailed Analysis: 1. Validity of Service of Notices: The primary question was whether the notices under section 147(a) of the Income-tax Act, 1961, and section 34(1)(a) of the Indian Income-tax Act, 1922, were validly served upon the assessee-Hindu undivided family (HUF). The assessee, represented by its karta, contended that the notices were not served in the manner prescribed by section 282 of the Act and that the service upon the interim receiver was unauthorized. The court noted that the interim receivers were appointed by the District Judge, Saharanpur, to administer the properties of the assessee-HUF due to insolvency proceedings. The notices for the assessment years 1952-53 to 1955-56 were served on the interim official receiver, Dehradun, on January 8, 1960, and for the assessment year 1949-50, the notice was served on March 3, 1966. The interim receiver filed returns for the relevant years, which were later followed by returns filed by the karta. The Tribunal found that the interim receivers were in possession and administration of the properties of the assessee-HUF and that the notices were passed on to the assessee. The assessee did not initially object to the service of notices and filed returns in response. The Tribunal concluded that the service of notices on the interim receiver was valid and that the assessee was aware of the notices. 2. Validity of Reassessment Orders: If the service of notices was deemed invalid, the reassessment orders for the years 1949-50, 1952-53 to 1955-56 would be void. The court emphasized that service of notice is a condition precedent to a valid reassessment, as established by the Supreme Court in CIT v. Thayaballi Mulla Jeevaji Kapasi [1967] 66 ITR 147 and a Full Bench decision of the Allahabad High Court in Laxmi Narain Anand Prakash v. CST [1980] 46 STC 71. The court examined whether the service of notices on the interim receiver constituted valid service on the assessee. Section 282 of the Income-tax Act, 1961, prescribes the mode of service of notice, allowing service either by post or as if it were a summons issued by a court under the Code of Civil Procedure. The court held that the interim receivers, appointed with full powers of administration, were competent to receive notices on behalf of the assessee-HUF. The Tribunal's findings that the notices were passed on to the assessee and that the assessee filed returns in response further supported the validity of the service. The court rejected the assessee's contention that the interim receiver was appointed only with respect to the banking business of a partnership firm, Mansa Ram and Sons, and not the assessee-HUF. The court relied on the Tribunal's consistent findings that the interim receivers were appointed in respect of the business and properties of the assessee-HUF. The court also addressed the argument that if the service of notices was proper, the assessment should have been made upon the receivers as representative-assessee under section 160 of the 1961 Act. The court clarified that the notices were addressed to the HUF, not the receivers, and that the income of the assessment years concerned was not received by the receivers, making section 160 inapplicable. Conclusion: The court answered the first question in the affirmative, holding that the service of notices on the interim receiver was valid, thus in favor of the Revenue and against the assessee. Consequently, the second question regarding the validity of reassessment orders did not arise. The reference was answered accordingly, with no costs awarded.
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