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TMI Blog2012 (5) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... that the validity of notice U/s 148 without specifying the status of the assessee could not be saved under the provisions of Section 292-B of the Act?" The brief facts of the case which is necessary for answering the above two substantial questions of law are: A notice under Section 148 of the Act, 1961 was issued to the assessee namely:M/s Kant Travels 917, Daraganj, Allahabad on 12/8/1991, in response to which the assessee filed his statement on 05/9/1991 stating that he has already filed return on 17/5/1991 which may be treated in compliance to the above notice. The assessee appeared before the Assessing Officer. Notices under Section 143 (2) were issued, in response to which the assessee through his Advocate appeared before the Assessing Officer and assessment order was passed by the Assessing Officer on 16/11/1993, completing the assessment on total income of 1,56,040/-. The assessee filed an appeal before the CIT(Appeals) on 07/1/1994 against the assessment order dated 16/11/1993. The said appeal was dismissed by order dated 20/4/1994. In the appeal following four grounds were taken which are quoted below: "1. Because on the facts and circumstances produced on record. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the respondent submits that there being no valid notice issued under Section 148 of the Act, 1961, the entire proceedings are vitiated and void-abinitio. He submits that the assessing officer can assume jurisdiction to proceed with the assessment only when a valid notice is served. He submits that the assessee having earlier filed his return as a registered firm and the notice was issued to the assessee as an unregistered firm is invalid and no error has been committed by the Tribunal in setting-aside the assessment order. He further submits that the mere fact that no objection was raised by the assessee before the Assessing Officer or the CIT (Appeals) shall not validate the proceedings which were void-abinitio. He has placed reliance on the various judgments of this Court as well as of Calcutta High Court in Bhagwan Devi Saraogi Vs. Income-tax Officer, [1979] 118 ITR 0906, Sri Nath Suresh Chand Ram Naresh Vs. Commissioner of Income-tax, [2006] 280 ITR and Commissioner of Income-tax Vs. Ram Das Deokinandan Prasad (HUF), [2005] 277 ITR 0197. Shri S.D. Singh, learned counsel for the respondent further submits that Section 292-B of the Act, 1961 can cure only mista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ription of the assessee was not there in the notice issued under Section 148 of the Act, 1961. The assessee was addressed in the notice as M/s Kant Travels 917, Daraganj, Allahabad and the assessing officer proceeded to assess the assessee as an unregistered firm. The fact that the assessee participated in the proceedings and filed his statement referring to his return which has been earlier filed on 17/5/1991 clearly proves that there was no doubt about the identity of the assessee as was disclosed in the aforesaid notice. The assessee throughout participated in the proceedings treating to be a notice issued against the assessee. In the facts of the present case, the fact that the assessee was a registered firm and the notice did not mention it a registered firm is not of much consequence. Section 292-B of the Act, 1961 has been inserted by the Taxation Laws (Amendment) Act, 1975 which is to the following effect: " [Return of income, etc., not to be invalid on certain grounds. 292B. No return of income, assessment, notice, summons or other proceedings, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m whether registered or unregistered. The Tribunal took the view that notice is addressed in such a manner that it does not specify the status of the assessee and in view of the fact that the status of the assessee has not been specified, the notice is not valid in the eyes of law. Holding that the notice was valid, the appeal was allowed and the entire proceedings were set-aside. The status of the addressee in the notice under Section 148 of the Act, 1961 should be relevant when the notice is addressed to a different entity and the assessment is framed against another entity. However, when the entity to whom the notice is addressed and the entity against whom the assessment is framed is one, the notice cannot be said to be invalid. In the case of Commissioner of Income-Tax Vs. Ishwar Singh & Sons, 131 ITR 480, a notice under Section 148 of the Act, was issued to one Arjun Singh Johar, proprietor of M/s. Ishwar Singh and Sons which notice was served on one Sri Maheshwar Singh. Pursuant to that notice Sardar Sampuran Singh, younger brother of Arjun Singh, filed a return in the name of M/s Ishwar Singh and Sons, proprietor, Sardar Sampuran Singh and the assessment was made on the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong 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 referable to one assessee while the description of the status the other way would be referable to another assessee. Where such is the case, the description of the status may be indicative of the fact that a particular assessee is sought to be proceeded against and if sanction of the Commissioner is obtained for proceeding against that assessee, such sanction cannot be availed of for the purpose of initiating proceedings against another assessee who would be indicated by the description of the status the other way." Present is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the notice in the instant case is invalid and on the basis of the invalid notice the ITO does not acquire any jurisdiction to reopen the assessment and to proceed with the reassessment proceeding. The failure to issue a valid notice deprives the ITO of the jurisdiction conferred on him under the Act and the proceedings taken by the ITO in pursuance of an invalid notice must necessarily be illegal and void. In this view of the matter, I do not consider it necessary to decide the further question whether the sanction given by the Commissioner in the instant case was mechanical or not." There cannot be any dispute to the proposition as laid down above. The proceedings for re-assessment can be initiated only after service of valid notice. The notice in the above case had no indication that notice was given to the principal officer by an association of persons. On the said ground the notice was struck down. The said case is clearly distinguishable. In Commissioner of Income-tax Vs. Ram Das Deokinandan Prasad (supra) a notice was issued to the assessee in his individual capacity and the income was sought to be reassessed was that of the Hindu undivided family of which the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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