1978 (3) TMI 25 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the notice u/s 148 of the I.T. Act, 1961.
2. Vagueness of the notice and its implications on jurisdiction.

Summary:

Issue 1: Validity of the notice u/s 148 of the I.T. Act, 1961
The notice dated 18th March 1965, issued u/s 148 of the I.T. Act, 1961, sought to reopen the assessment for the year 1948-49. The notice was addressed to "M/s. Bhimraj Banshidhar of 180, Mahatma Gandhi Road, Calcutta." The petitioner contended that the notice was invalid as it did not specify whether it was addressed to the HUF or the registered partnership business, both of which had the same name and address. The court found that the notice was indeed vague and not a valid notice u/s 148 of the Act, relying on a similar precedent in Madanlal Chowdhury v. ITO.

Issue 2: Vagueness of the notice and its implications on jurisdiction
The court observed that both the HUF and the partnership firm were known to the income-tax department and were being assessed by the same ITO. The notice did not indicate which entity it was addressed to, making it vague. The revenue's argument that the acknowledgment slip contained the file number of the HUF was not an admitted position on affidavits, and thus, the court could not rely on it. The court held that the notice's vagueness rendered it invalid and incapable of being given effect to. Consequently, the order of assessment dated 31st March 1969, pursuant to the notice, was also quashed.

Conclusion:
The court issued a writ of mandamus directing the respondents to recall, cancel, and withdraw the notice dated 18th March 1965, and to forbear from giving effect to it in any manner. Additionally, a writ of certiorari was issued, quashing the order of assessment dated 31st March 1969. The application succeeded, and the rule was made absolute, with no order as to costs. The Division Bench upheld the judgment, agreeing that the notice was vague and invalid, thus dismissing the appeal with no order as to costs.