Valid service through authorised agent and full disclosure requirement sustain reassessment under income-tax law.

Service of an income-tax notice was treated as valid where it was served on the assessee's authorised munim, with the Tribunal finding that the notice had also reached the manager and adult family members; a belated objection raised only at the appellate stage did not invalidate service. Reassessment under section 34(1)(a) of the Income-tax Act, 1922 was also upheld because the assessee had not made a full and true disclosure of all primary facts, including facts relating to three cash credits. Mere entries in the books were not enough to satisfy the statutory disclosure requirement, so the reassessment proceedings were held valid.

---

---

Issues: (i) Whether service of the notice on the assessee's munim constituted valid service on the assessee. (ii) Whether action under section 34(1)(a) of the Income-tax Act, 1922 was legally valid on the facts of the case.

Issue (i): Whether service of the notice on the assessee's munim constituted valid service on the assessee.

Analysis: The finding of the Tribunal was that the notice was in fact served on the manager and adult members of the family, though the acknowledgment was signed by the munim, and that the munim was an authorised agent to receive notices on behalf of the assessee. The objection to service was also taken only at the appellate stage after the return had been filed without protest.

Conclusion: The service was valid and the objection failed; the issue was decided against the assessee.

Issue (ii): Whether action under section 34(1)(a) of the Income-tax Act, 1922 was legally valid on the facts of the case.

Analysis: Section 34(1)(a) could be invoked where income had escaped assessment because of omission or failure to disclose fully and truly all material facts necessary for the assessment. No primary facts were disclosed regarding the three cash credits introduced in the relevant financial year. Mere entries in the books did not amount to the disclosure required by the section, and the earlier Division Bench view on similar facts was followed. The authorities were therefore entitled to treat the reassessment proceedings as valid.

Conclusion: Action under section 34(1)(a) was valid and the issue was decided against the assessee.

Final Conclusion: The reference was answered in favour of the Revenue, with both referred questions answered against the assessee and costs awarded to the Commissioner.

Ratio Decidendi: For reassessment under section 34(1)(a) of the Income-tax Act, 1922, the assessee must make a full and true disclosure of all primary facts for the relevant assessment year, and mere book entries or a belated challenge to service do not defeat valid reassessment proceedings or service duly effected through an authorised agent.

---