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TMI Blog1989 (8) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment years 1969-70 to 1972-73 and 1975-76 and the Tribunal passed a common order dt. 29-12-83 in I.T.A. Nos. 1386 to 1390/Mds/83 etc. There were 25 appeals covered by that common order because appeals had been filed by the Revenue against the decision of the A.A.C. in appeals filed by different persons representing M/s Eswar Syndicate. The assessments in the case of M/s Eswar Syndicate were eventually set aside. 3. In the assessment order dt. 31-3-86 now under consideration, a reference is made to the aforesaid background and thereafter the I.T.O. has gone on to compute the total income at Rs. 1,30,400. This assessment was also confirmed by the C.I.T(A). Various contentions have been taken before us in appeal. Shri A. Krishnamurthy, the learned counsel appearing for Shri E. Sambandam and Shri K.V. Ramanna, submitted that the assessees whom he was representing did not receive any notice u/s 148. He submitted that they were all of a sudden served with an assessment order prior to which no opportunity had been afforded to them to state their case. The manner in which the assessments were made treating these persons as members of an Association of Persons, he submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 7. The learned Departmental Representative took us through the proposal submitted by the I.T.O. on 26-2-1982 to the Commissioner of Income-tax on the basis on which the Commissioner recorded the satisfaction for reopening the assessment. He in particular invited our attention to the reasons recorded and stated that in the reasons recorded it was clearly brought out that land had been plotted out and sold in the name of M/s Union Carbide Layout and, therefore, the reasons recorded on which the Commissioner of Income-tax gave his satisfaction were reasons which clearly led the I.T.O. to believe that income had escaped assessment and the requirements of sections 147, 148 and 151 were all satisfied. He, therefore, submitted that there was no infirmity in the assumption of jurisdiction. 8. The learned Departmental Representative went on to state that it may be there was no material to show that notice u/s 143 (2) was not issued in the present case, but that would be only a supervening infirmity and, therefore, if at all, the assessment would only require to be set aside to be redone. In reply, both the learned counsel submitted that the case was one where the assessment had to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that concern. This is clear from the Annexures-B, C, and D. Factually we are unable to agree that merely because there was a mention in the masons that the unregistered firm of M/s T.Venkatachalam, Smt. R.Padmini and Smt. K.Kamakshi carried on business in the name of Union Carbide Layout, the name of the assessee can be changed to M/s Union Carbide Layout in the status of an Association of Persons and further that it is an Association represented of not the three persons already mentioned as partners of the unregistered firm but six individuals of whom only one namely Sri Venkatachalam was common and the remaining five others were strangers. The facts, in our view, lead to the conclusions that proposal was submitted for initiating action u/s 147 in respect of a certain assessee. When the notice u/s 148 was issued, the name of the assessee was changed to the name of the business but the notices were clearly issued to only three partners who were considered to be partners of the unregistered firm in respect of which permission was sought for initiation of action u/s 147 and the notice was not issued to six persons who have been held by the I.T.O. to be members of an Association of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment could obviously be made only in the status of individual and not in the status of association of persons. But through some oversight the applications made by the Income-tax Officer to the Commissioner showed the status of the assessee as association of persons. This was clearly a mistake and the question is whether this mistake had any invalidating consequence on the subsequent proceedings for assessment initiated by the Income-tax Officer after the grant of the sanction by the Commissioner. We do not think that the wrong description of the status of an assessee can have the effect of invalidating the proceedings for assessment initiated after obtaining the sanction of the Commissioner when the sanction is in terms granted to the initiation of proceedings against the assessee. If the status of the assessee was wrongly described, it can always be corrected by the Income-tax Officer in the course of the assessment proceedings but that cannot affect the validity of the assessment proceedings. The position would of course be different where the status is so inextricably mixed up with the question as to who is the assessee that the description of the status one way would be referab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in respect of whom sanction was sought and approval obtained for initiating action u/s 147 was an unregistered firm which was an entirely different assessable entity, i.e., a separate unit of assessment from the Association of Persons, which is another assessable entity, i.e., another separate unit of assessment, recognized under the I.T. Act and the respect of which the assessment was made. This is not a case where there was a mere error due to oversight in mentioning the status as unregistered firm in seeking the permission of the Commissioner for initiating action u/s 147. The permission sought and granted was in respect of an entirely different assessee and the ratio of the judgment of the Supreme Court K. Adinarayana Murty's case squarely applies, and the initiation of proceedings u/s 148 in the status of an unregistered firm and not in the correct status of an Association of persons which, according to the I.T.O., was the assessable entity, would render the notice/notices u/s 148 issued in pursuance thereof illegal in so far as the present assessment is concerned and all proceedings taken under that notice, which culminated in the making of the present assessment on the As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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