1970 (12) TMI 13 - HC - Income Tax

Summary

Issues Involved:
1. Validity of notices under section 148 of the Income-tax Act, 1961.
2. Jurisdiction of the Income-tax Officer to assess in the status of Hindu undivided family (HUF).
3. Legitimacy of revised returns filed by the petitioner.
4. Allegations of suppression of material facts and misrepresentation.

Detailed Analysis:

1. Validity of Notices under Section 148:
The petitioner, Mahabir Prosad Poddar, initially received notices under section 148 of the Income-tax Act, 1961, for the assessment years 1957-58 to 1961-62, requiring him to file returns as his income had escaped assessment. These notices were addressed to him as an individual. The petitioner filed returns in response to these notices, also in the status of an individual. The Income-tax Officer later assessed the petitioner in the status of a Hindu undivided family (HUF).

2. Jurisdiction of the Income-tax Officer:
The petitioner contended that the Income-tax Officer lacked jurisdiction to make assessments in the status of HUF when the notices were addressed to him as an individual. The petitioner relied on the Supreme Court decision in Commissioner of Income-tax v. K. Adinarayana Murty, arguing that the officer should have issued fresh notices if the original ones were found to be invalid. The court, however, found that the petitioner himself had filed revised returns in the status of HUF and that the officer had accepted these revised returns on their merits.

3. Legitimacy of Revised Returns:
The petitioner initially filed returns as an individual but later submitted revised returns showing the status as HUF. The Income-tax Officer accepted these revised returns and completed the assessments accordingly. The court noted that the petitioner did not claim the business income belonged to HUF until after the search and seizure in October 1964. The court also observed that the application for voluntary disclosure under section 271(4A) did not initially indicate it was on behalf of HUF, suggesting an interpolation in the petition.

4. Allegations of Suppression of Material Facts and Misrepresentation:
The court found that the petitioner had suppressed material facts and misrepresented certain details to obtain interim stay orders. The court noted that the petitioner had amassed significant wealth without paying due taxes and had filed revised returns to avoid tax liability. The court referred to a decision by the Gujarat High Court in Chooharmal Wadhuram v. Commissioner of Income-tax, emphasizing that a wrong description of status could be corrected during assessment proceedings and did not invalidate the proceedings.

Conclusion:
The court dismissed the petition, holding that the application was without merit and mala fide. It concluded that the Income-tax Officer had jurisdiction to assess the petitioner in the status of HUF based on the revised returns filed by the petitioner. The court discharged the rule, vacated any interim orders, and ordered the petitioner to pay costs to the respondents.