9911796707
TMI Blog2004 (11) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is a Hindu undivided family and it derived income for the aforesaid assessment years from property and dealings in silver utensils and yarn. After completion of the assessment for the assessment years 1965-66 to 1972-73, the business premises of the assessee were searched. The Income-tax Officer on the basis of the documents and the articles found during the course of search, was of the view that the income of the assessee has escaped assessment and the business in the name of one Heeralal Burnwal was the benami business of the assessee. After obtaining sanction from the Commissioner of Income-tax, notices under section 147(a) of the Act were issued. The Income-tax Officer sought and was granted the approval for the reopening of the assessment in respect of the assessee in the status of Hindu undivided family. However, the notices issued to the assessee were addressed as follows: Shri Ram Lala Prasad, Pro. Ram Das Deokinandan Prasad, Hindi Bazar, Gorakhpur. The notices were served on Shri Ram Lala Prasad. He was also the karta of the assessee-Hindu undivided family. In compliance with the notices, returns were filed in the status of Hindu undivided family and the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Prasad, Hindu undivided family. The notices were issued to him as proprietor of Ram Das Deokinandan, who was required to file the return for his individual income as a proprietor. It took the view that the notices issued under section 148 of the Act were invalid and the reassessments were unsustainable as proper notices under section 148 were not served on the assessee. Heard counsel for the parties and perused the record. Learned standing counsel for the Revenue submitted that the approval was sought and was granted by the Commissioner of Income-tax in the status of Hindu undivided family. The assessee filed a return of Hindu undivided family and as such the initiation of reassessment proceedings were valid and the Income-tax Officer rightly exercised his jurisdiction to reassess the underassessed income of the Hindu undivided family. Learned standing counsel has placed reliance on the following cases: (1) CIT v. S. Raman Chettiar [1965] 55 ITR 630 (SC); (2) CIT v. Banarsilal Rajgarhia [1964] 51 ITR 659 (Patna); (3) Sajjan Kumar Saraf v. CIT [1978] 114 ITR 155 (Cal); and (4) Mahabir Prasad Poddar v. ITO [1976] 102 ITR 478 (Cal). Learned counsel for the assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p to the Tribunal. The appeal was allowed in part. Thereafter, after obtaining the sanction of the Commissioner of Income-tax (Appeals), the Income-tax Officer issued a notice purporting to be under section 34 of the Act in respect of the assessment year 1944-45. The court was considering the validity of this notice. In that connection, it was held by the Supreme Court in the above case that notice is not valid for the assessment year 1944-45. The observations made by the Supreme Court in the aforesaid judgment was with reference to the different context of facts. The said ruling has no application to the issue involved in the present reference. The Supreme Court interpreted section 22(3) of the old Income-tax Act. The next case relied upon by learned counsel for the Revenue is CIT v. Banarsilal Rajgarhia [1964] 51 ITR 659 (Patna). In that case the notice states that the income of the assessee for the year ending March 31, 1948, had escaped assessment and called upon him to submit a return. This notice was understood by the assessee as relating to the assessment year 1948-49. It was held by the Patna High Court that there was no violation of any condition precedent for assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment. On the facts of that case it was held by the Calcutta High Court that service of notice for reassessment without indicating the capacity could not invalidate proceedings as the status can be determined in the assessment proceedings. On a close reading of the judgment, it helps, on the facts the assessee in the present case rather than the Department. The legal proposition which is in favour of the assessee was accepted by the High Court but on account of special facts, indicated above, the writ petition was dismissed. Then learned counsel for the Revenue placed reliance upon Sajjan Kumar Saraf [1978] 114 ITR 155 (Cal). The said case has no bearing on the controversy involved in the present reference. It was not a case of reassessment proceedings. A notice was issued to a dead person and the return was filed within the specified time by a legal representative. It was held that where a return is filed by a legal representative in response to an invalid notice issued to the deceased, return would not be invalid. It was a case of regular assessment notice and was not with respect to the reassessment proceedings. Therefore, it has hardly any application to the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining to the assessment year 1946-47. Subsequently, the Income-tax Officer informed him that the notice dated September 29, 1962, related to his Hindu undivided family and he should instead of the return of his individual income, file the return of the income of his Hindu undivided family. A question arose whether the proceeding initiated under section 147(a) against the Hindu undivided family was in accordance with law. The court answered it in the negative. It took the view that notice issued under section 34 of the Act to the Hindu undivided family on September 29, 1962, was vague and as such invalid. The vagueness of the said notice did not stand cure because the Income-tax Officer at a later stage informed the assessee that he was to file his return in the status of Hindu undivided family. Learned counsel for the Revenue has not advanced any argument that the finding of the Tribunal that notice under section 148 of the Act was meant for the karta of the Hindu undivided family and not in his individual capacity. The only point urged by learned counsel for the Revenue was that since the assessee has filed a return of the Hindu undivided family and the income sought to be reass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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