Escaped assessment notice must disclose the statutory basis; dead-person and non-resident assessments were otherwise upheld.

Section 24B(2) was applied to a deceased assessee through his legal representative where the notice, though not expressly framed in representative capacity, was understood and acted on throughout that basis; the assessment was therefore not vitiated by that irregularity. A notice issued in the form of a Section 22(2) notice could not be converted into a valid Section 34 escaped-assessment notice unless the statutory basis for reopening was shown, and the assessment failed for want of a valid Section 34 notice. Section 42 was treated as additional machinery for assessing a non-resident and not as an exclusive requirement to proceed only through an appointed agent, so direct assessment without appointing an agent was not invalid.

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Issues: (i) whether the assessment of the deceased assessee complied with the requirements for assessing a dead person through his legal representative under Section 24B(2); (ii) whether the notice issued could be treated as a valid notice for escaped assessment under Section 34; and (iii) whether a non-resident whose income arose in British India could be assessed directly without appointing an agent under Section 43.

Issue (i): whether the assessment of the deceased assessee complied with the requirements for assessing a dead person through his legal representative under Section 24B(2).

Analysis: Section 24B(2) required service of notice on the executor, administrator, or other legal representative of the deceased and assessment of the deceased's income as if that representative were the assessee. The notice was addressed in a form that did not expressly describe the recipient in representative capacity, but the Tribunal found that the recipient was in fact the legal representative, that the notice and its purpose were understood, and that the proceedings were conducted throughout on that footing. The Court treated the defects as irregularities that did not, on these facts, vitiate the assessment under Section 24B.

Conclusion: The assessment was not held invalid for non-compliance with Section 24B(2).

Issue (ii): whether the notice issued could be treated as a valid notice for escaped assessment under Section 34.

Analysis: A notice under Section 34 need not be in any special form, but it must show that the Income-tax Officer bona fide considered that income had escaped assessment and must inform the assessee of the matter to be dealt with. The notice served in this case was issued in the form of a Section 22(2) notice and was not shown to have been issued as a notice under Section 34. The Court held that a belated notice in the form used here could not automatically be converted into a Section 34 notice merely because the assessment year had expired; the statutory condition of a valid Section 34 notice was not satisfied.

Conclusion: The notice was not a valid notice under Section 34, and the assessment failed on this ground.

Issue (iii): whether a non-resident whose income arose in British India could be assessed directly without appointing an agent under Section 43.

Analysis: Section 42 was treated as a charging provision with an additional machinery for assessment through an agent, not as excluding direct assessment where the non-resident was available and willing to comply. The Court followed the Bombay and Madras view that the provision did not impose an exclusive requirement to assess only through an appointed agent. The contrary Allahabad view was not accepted.

Conclusion: Direct assessment without appointing an agent was not invalid on this ground.

Final Conclusion: The reference was answered in a manner that left the assessment unsustainable because the absence of a valid Section 34 notice vitiated the assessment, while the objections based on Section 24B(2) and Section 43 were rejected.

Ratio Decidendi: A belated notice in the form of a Section 22(2) notice cannot be treated as a valid Section 34 notice unless the statutory basis for escaped assessment is shown, while Section 42 does not bar direct assessment of a non-resident where the provision operates as additional machinery and not an exclusive mode of assessment through an agent.

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