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TMI Blog1981 (4) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the ITO passed order under s. 154 r/w s. 155 of the Act rectifying the share income of the assessee. According to the ITO the correct share income from the firm was enhanced to Rs. 19,787 from Rs. 15,869 in the asst. yr. 1966-67 and was enhanced to Rs. 29,406 from Rs. 13,650. Thus, the ITO issued demand notices but unfortunately they could not be served on the assessee till 12th Feb., 1979 when the fresh copy of orders with demand notices were served on him personally. The rectification orders in both the cases for both the years were passed on 30th April, 1974. In appeal, the AAC rejected the plea of the assessee and dismissed both the appeals with the following observations: "I have gone through ITO's case records and find that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y while the law requires the rectification to be made within four years of the original assessments. Hence, we agree with the ld. counsel for the assessee that there was undue delay on the part of the Revenue authorities to have served the assessee with the demand notices after such a long delay and as such the demands created are not to be treated as legal both from equity point of view as well as from legal angle. In this respect, we may seek support from the decisions of their Lordships of the Supreme Court in the case of Banarsidevi Ors. vs. ITO reported in (1964) 53 ITR 100 (SC) and the decision of the Privy Council reported in (1934) 2 ITR 216 (PC) and (1938) 6 ITR 414 (PC) at page 423. In the last case, their Lordships of the Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand for income tax. Both of them held for this reason (amongst others) that the service of the Notice of Demand of 4th May, 1929, was illegal and inoperative to impose liability upon this respondents. Their Lordships do not find it necessary to express any opinion upon his point inasmuch as in their view and for the reasons which they will now proceed to give it does not call for determination in the present case. x x x x x Their Lordships are accordingly of the opinion that the order of 4th May, 1929 was one that the ITO had no power to make and that the second of the two questions to which they have referred must be answered in the affirmative." 3. Thus, respectfully following the same, we can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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