Reassessment of partitioned Hindu family income remains valid under the assessment fiction, and notice defects may be waived by conduct.

Section 34 reassessment under the Indian Income-tax Act, 1922 could apply to escaped income of a Hindu undivided family even after partition and disruption, because Section 25A's deeming fiction continued the family for assessment purposes. The reassessment machinery was therefore capable of bringing the family income to tax notwithstanding that the original assessment had been made earlier and the partition claim arose later. A notice under Section 34 addressed to the former karta was not invalid merely because it did not specify the capacity in which he was proceeded against, where he understood the notice as relating to family income, responded without objection, and any defect was treated as waived.

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Issues: (i) Whether a reassessment under Section 34 of the Indian Income-tax Act, 1922 could be made in respect of income of a Hindu undivided family after the family had partitioned and ceased to exist as an undivided entity, by application of Section 25A. (ii) Whether a notice under Section 34 addressed to the former karta without specifying the capacity in which he was proceeded against was invalid.

Issue (i): Whether a reassessment under Section 34 of the Indian Income-tax Act, 1922 could be made in respect of income of a Hindu undivided family after the family had partitioned and ceased to exist as an undivided entity, by application of Section 25A.

Analysis: Section 25A was held to govern disrupted Hindu families whose income had been received while the family was undivided but had escaped assessment. The concluding words of Section 34 made the provisions of the Act applicable to reassessment proceedings as far as may be, and therefore attracted Section 25A as well. The fiction under Section 25A that the family continues for assessment purposes after partition was treated as applicable to supplemental assessments under Section 34, even though the original assessment had been made under Section 23 and the claim of partition arose later in the reassessment proceedings.

Conclusion: Yes. Section 25A applied to the reassessment under Section 34, and the escaped family income could validly be brought to tax after partition.

Issue (ii): Whether a notice under Section 34 addressed to the former karta without specifying the capacity in which he was proceeded against was invalid.

Analysis: The notice was addressed to the assessee, who understood it as relating to the family income and responded in that capacity without raising objection before the taxing authorities. Even on the footing that the family had been disrupted, service on him was valid because he was the person liable to pay the tax on the reassessment. Any defect in the notice, if present, was treated as irregular and waived by the assessee's conduct.

Conclusion: No. The notice was valid, and any irregularity stood waived.

Final Conclusion: The reassessment on the disrupted Hindu family was upheld and the reference was answered in favour of the revenue.

Ratio Decidendi: The reassessment machinery under Section 34 of the Indian Income-tax Act, 1922 can operate with the special rules governing partitioned Hindu undivided families under Section 25A, and a notice served on the person liable to pay the tax is not invalid merely because it does not expressly state the capacity in which he is proceeded against, where the assessee understands and acts upon it without objection.

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