9911796707
TMI Blog1982 (4) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ave any place of business or establishment or connection with India. Upto 1955, the appellant held all the shares of M/s. Turner Morrison Co. Ltd., a company incorporated under the, Indian Companies Act, 1913. Since 1956, the appellant No. 1 has been holding 51% shares in the Indian company. The appellant No, 2, B. N. Garg, was appointed a director of the appellant No. 1 for the purpose of looking after certain pending litigations in India. It appears that on the 6th December, 1974, the ITO, Company Dist. II, Calcutta, wrote a letter to the appellant No. 2 for and on behalf of the appellant No. 1 wherein it was stated that the income had escaped assessment in terms of cl. (a) of a. 147 and, therefore, appellant No. 2 was asked to show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed in the manner as follows: " To M/s. Hungerford Investment Trust Ltd. represented by Sri B.N. Garg., Director, 3, Park Mansion, Park St. Cal. The appellants challenged the said notice in an application made under art. 226 of the Constitution of India. It was mainly contended on behalf of the appellants (who were the petitioners in the court of the first instance) that the appellant No. 2 was not and/or could not be treated as a principal officer as defined in s. 2(35) of the I.T. Act, 1961 (hereinafter referred to as the " said Act "). Therefore, the notice under s. 148 was not properly served as required under s. 282 of the said Act. Inasmuch as there was no proper service of the said notice under s. 148, proceedings for reopenin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... administering the company. What is required in connection with the management or the administration of the company. In the facts and circumstances of this case, in my opinion, it cannot be said that the finding that the petitioner No. 2 was connected with the management or administration of petitioner No. 1 is based on no material or is wholly arbitrary. It is the Income-tax Officer's intention that is important on this aspect of the matter provided his intention was based upon some material.... It was then contended that before treating a person concerned as principal officer under section 2(35) of the Income-tax Act, 1961, the Income-tax Officer should determine that question upon hearing the submission or representation made by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson is treated as a principal officer under s. 2.(35)(b) he should be given a notice of the proposal or intention of the ITO so that he might make a representation before a final decision was taken by him; otherwise, it was merely an empty ritual. According to counsel, the condition laid down in the said sub-section is not an empty formality or empty ritual but a safeguard against a decision of the ITO which may affect a person concerned. It was also the submission of the counsel that on the materials there was nothing to show that Garg was connected with the management and administration of the company. Counsel for the appellant further submitted that the notice under s. 148 was addressed to Hungerford Investment Trust Ltd. represented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the question whether a person is a principal officer of the company should be determined in the assessment proceeding. The determination of the question of principal officer does not arise before the determination of the question of liability of the assessee. In the instant case, in our view, the learned judge of the court of first instance came to a correct finding. We respectfully agree with the findings of the learned judge of the court of first instance as also with the reasoning for such finding. The appellant No. 2 is the only director in India of the appellant-company. Excepting the appellant No. 2 there is no other person in India connected with the management or administration of the appellant-company. In the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that he is not the principal officer or that the association is not properly formed. The Income-tax Officer will then consider whether the person served is the principal officer and whether he has some connection or concern with the income sought to be assessed." In our opinion, counsel for the respondent rightly submitted that the objection, if any, to the notice expressing the intention to treat the person concerned as the principal officer of the assessee-company should be determined at the time of assessment. In the facts and circumstances of this case it cannot be said that the notice under s. 148 is invalid or without jurisdiction. For all the reasons stated above, this appeal is dismissed. There will, however, be no order as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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