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TMI Blog1979 (9) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... r for the issue of a writ of certiorari calling for the records of the Commr. of Agrl. I.T., Madras, the second respondent, relating to the order, dated November 8, 1976, made in Revision Petition No. 279 of 1976, confirming the order of the Agrl. ITO, Nagapattinam, the first respondent, dated January 4, 1975, made in GIR No. 272-R relating to the assessment year 1974-75. The petitioners-trusts, Ramaswami Mudaliar Kudumba Dharma Trust and Ramaswami Mudaliar Samaya Improvement Trust, are two different trusts and they have been given two GIR Nos. 271 and 272-R. We are concerned in these writ petitions with two extents of lands in S. No. 104, Keelakudi village, Nagapattinam Taluk, namely. 28.14 acres said to belong to Ramaswami Mudaliar Kudumba Trust (hereinafter referred to as Kudumba Trust) and 29.41 acres said to belong to Ramaswami Mudaliar Samaya Improvement Trust (hereinafter referred to as Samaya Improvement Trust). Under s. 4(b) of the T.N. Agrl. I.T. Act, 1955, as it originally stood, any agricultural income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in the case of property so held in part only for such pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 976. That order in so far as it relates to Samaya Improvement Trust for the assessment year 1973-74, had become final and has not been questioned in any of these two writ petitions. For the assessment year 1974-75, against the best judgment assessment order dated January 4, 1975, relating to Samaya Improvement Trust, Sambandamurthi Mudaliar filed a revision petition under s. 34 of the Act in R. P. No. 259 of 1976, before the Commr. of Agrl. I.T. and it was dismissed by an order dated November 8, 1976, and W. P. No. 495 of 1977, has been filed to quash that order. Section 35 of the Act reads thus: "Income escaping assessment.-If for any reason agricultural income chargeable to tax under this Act has escaped assessment in any financial year or has been assessed at too low a rate or has been under-assessed the Agricultural Income-tax Officer may, at any time, within five years of the end of that year serve on the person liable to pay the tax or, in the case of a company on the principal officer thereof a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 16 and may proceed to assess or reassess such income, and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of both the trusts is invalid in law ; (This ground has been raised only in the additional ground allowed to be raised in W.M.P. No. 5803 of 1979 dated September 18, 1979); (4) all the materials now relied upon in the impugned orders were already available to the assessing authority and a mere change of opinion is not a valid ground to reopen the assessment ; and (5) the amendment of s. 4(b) of the Act is invalid in law. It may be stated that ground Nos. 4 and 5 were not pressed by the learned counsel for the petitioners in the course of the argument. In the counter-affidavit it is contended that the service of notice is valid having regard to the provisions of s. 58 of the Act which lays down the manner of service of notice and says " (1) A notice or requisition under this Act may be served on the person therein named either by post or, as if it were a summons issued by a court under the Code of Civil Procedure, 1908 ; (2) Any such notice or requisition may, in the case of a firm, Hindu undivided family, an Aliyasanthana family or branch of a Marumakkattayam, tarwad or tavazhi be addressed to any member of the firm or to the manager, yajaman or karnavan, or any ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... randson, Chidambaranatha Mudaliar, and after him the eldest male member in the families of all the three sons of the testator should administer the trust. No other document has been produced to show that any change in the trusteeship has been effected to enable Chidambaranatha Mudaliar to function as the trustee for any of the two trusts even during the lifetime of his father, Sambandamoorthi. Therefore, the trustee for both the trusts, so long as Sambandamoorthi is alive, is Sambandamoorthi, by virtue of the terms of the will and s. 2(q) of the Act which defines " person " and says that it shall include a trustee holding or owning property by himself or for any other or partly for his own benefit and partly for another and by virtue of s. 2(e) of the Act which defines an " assessee ". No doubt, for the assessment years 1961-62, 1962-63, 1964-65, 1965-66, 1966-67 and 1967-68, Chidambaranatha Mudaliar had filed affidavits before the Agrl. ITO saying that he is the trustee of Kudumba Dharma Trust. But in 1968-69, Sambandamurthi has filed an affidavit saying that he is the trustee of the Kudumba Dharma Trust and on December 3, 1978, exemption had been granted to him by the Agrl. ITO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued calling upon the trusts to submit returns in Form No. 11, separately for each of the three assessment years. Separate returns were in fact submitted in respect of the two trusts in the previous years. The notice issued under s. 35 of the Act is for clubbing together the income of both the trusts. That is another reason why separate notices should have been sent to each of the trusts. The learned counsel for the petitioner submitted that a valid notice under s. 35 of the Act is a condition precedent to the reopening of the assessment for each of the years. In Narayana Chetty v. ITO [1959] 35 ITR 388, the Supreme Court held that the notice prescribed by s. 34 of the Indian I.T. Act, 1922, for the purpose of initiating reassessment proceedings is not a mere procedural requirement, that the service of the prescribed notice on the assessee is a condition precedent to the validity of any reassessment made under s. 34 and that if no notice is issued or if the notice issued is shown to be invalid then the proceedings taken by the ITO, without notice or in pursuance of an invalid notice, would be illegal and void. In CIT v. K. Adinarayana Murthy [1967] 65 ITR 607, the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 967. It has been found, in that case, that Balakrishna Pillai had no written authority to receive the notice and that there was no proper service of the notice under s. 148 of the I.T. Act, 1961, and the reassessment made under s. 147 of the Act could not be held to be valid. The notice under s. 35 of the Act in these cases is not valid on the ground that it had been addressed to Chidambaranathan and not to Sambandamoorthi who alone could be the trustee of both the trusts having regard to the provisions of the Will under which the trusts were constituted. The notice is invalid in law having regard to the fact that the assessee had not been called upon to submit the returns in Form No. II as required by s. 16(2) of the Act. The notice is invalid also on the ground that a single notice had been issued in respect Of both the trusts and in respect of the three assessment years though the trusts had been treated as separate entities in the previous years and two separate GIR numbers had been allotted to them. Since there was no valid notice under s. 35 of the Act, the order of reassessment made by the Agrl. ITO and confirmed by the Commr. of Agrl. I.T. was invalid in law. For the af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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