1978 (9) TMI 29 - HC - Income Tax

Summary

Issues:
1. Validity of service of notices for reassessment proceedings.
2. Interpretation of the terms "issued" and "served" in the context of tax laws.
3. Applicability of the decision in Seth Balkishan Das v. CIT.

Analysis:

1. Validity of service of notices for reassessment proceedings:
The case involved a dispute over the validity of the service of notices for reassessment proceedings against the assessee-firm. The Income Tax Officer (ITO) had issued notices for reassessment, but there were discrepancies in the service of these notices to the partners of the firm. The Tribunal remanded the matter to the ITO for further examination of evidence regarding the proper service of notices. The Tribunal did not provide a conclusive finding on this issue, leading to the application by the assessee for reference of questions to the court under section 256(2) of the Income Tax Act, 1961.

2. Interpretation of the terms "issued" and "served" in tax laws:
The High Court examined the interpretation of the terms "issued" and "served" in the context of tax laws. Referring to previous judgments, the Court highlighted that these terms are often used interchangeably. The Court cited cases where the Supreme Court had clarified that the term "issued" encompasses the entire process of sending notices as well as their service. Therefore, in the context of reassessment proceedings, the Court emphasized that the term "issued" should be understood to include the concept of "served."

3. Applicability of the decision in Seth Balkishan Das v. CIT:
The Court discussed the relevance of the decision in Seth Balkishan Das v. CIT, which was cited by the Tribunal. However, the Court noted that a later decision by the Punjab High Court in Tikka Khushwant Singh v. CIT had distinguished the earlier judgment in Seth Balkishan Das's case. The Court highlighted that the Punjab High Court in Tikka Khushwant's case had clarified that the terms "issued" and "served" are interchangeable in the context of tax laws, aligning with the interpretation provided by the Supreme Court in previous cases.

In conclusion, the High Court dismissed the application for reference, stating that at the current premature stage of the proceedings, no question of law had arisen that could be referred to the court under section 256(2) of the Income Tax Act, 1961. The Court affirmed the Tribunal's decision to remand the matter to the ITO for further examination, emphasizing the need for clarity on the proper service of notices in reassessment proceedings.