1964 (9) TMI 82 - HC - Income Tax

Summary

Issues involved:
1. Validity of notice served under section 34 of the Income-tax Act within the prescribed period.
2. Interpretation of the law regarding the service of notice under section 34 after the expiry of the 8-year period.
3. Jurisdiction of the court to consider a question of law not raised before the Tribunal.

Detailed Analysis:
1. The case involves a dispute regarding the service of a notice under section 34 of the Income-tax Act to a Hindu undivided family for the assessment year 1945-46. The notice was initially attempted to be served through affixture on 30th March, 1954, and later by registered post on 31st March, 1954. The validity of the service was challenged by the assessee, leading to a series of appeals. The Appellate Assistant Commissioner deemed the service defective, while the Income-tax Appellate Tribunal upheld the service as proper under Order V, rule 20, of the Code of Civil Procedure. The key issue was whether the service by affixture without pasting a copy on a conspicuous place was valid within the prescribed period.

2. The judgment referred to a Supreme Court decision regarding the interpretation of section 4 of the Indian Income-tax (Amendment) Act, 1959, which aimed to save the validity of notices issued under section 34(1)(a) even if served after the 8-year period. The Supreme Court rulings clarified that notices issued under section 34(1)(a) before or after April 1, 1956, could not be challenged based on the time limit of 8 years. The Commissioner of Income-tax relied on these decisions to argue that the notice served in this case could still be valid even after the prescribed period.

3. The judgment delved into the jurisdiction of the court to consider a question of law not raised before the Tribunal. It emphasized that the court's role is advisory, limited to questions referred by the Tribunal, and arising out of its order. The court can only address questions raised before or decided by the Tribunal. In this case, the court concluded that the new question raised by the Commissioner of Income-tax was neither raised nor considered by the Tribunal, precluding its consideration at this stage. The judgment highlighted the importance of adhering to the questions framed by the Tribunal in the context of advisory jurisdiction.

In conclusion, the High Court upheld the previous Bench decision and answered the referred question in the negative, emphasizing the limitations on raising new questions of law not previously addressed by the Tribunal. The judgment provided a comprehensive analysis of the issues surrounding the validity of the notice served under section 34 and the interpretation of relevant legal provisions and precedents.