Invalid Notices Under Income-tax Act Deemed Fatal; High Court Rules in Favor of Assessee

Commissioner Of Income-Tax Versus Bibhuti Bhusan Mallick

Commissioner Of Income-Tax Versus Bibhuti Bhusan Mallick - [1987] 165 ITR 107, 55 CTR 33, 26 TAXMANN 211 Issues involved: Validity of notices issued u/s 148 of the Income-tax Act, 1961 for assessment years 1959-60 and 1960-61.

Summary:
The case involved the assessment of Bibhuti Bhusan Mallick, a Hindu undivided family, for the years 1959-60 and 1960-61. The Income-tax Officer sought to reopen the assessments under section 147(a) of the Act and issued notices under section 148 in the name of Panchanan Mallick and Bibhuti Bhusan Mallick. The assessee objected to the validity of the notices, arguing they were not issued in the proper name and that all primary facts were disclosed during the original assessment. The Income-tax Officer overruled the objections, stating that the notices were served on the karta, Bibhuti Bhusan Mallick, and that the name discrepancy was a bona fide mistake. The Appellate Assistant Commissioner for 1959-60 found the notices invalid, while for 1960-61, another Commissioner upheld the validity based on business name consistency. The Tribunal later held that the notices were invalid, rendering the reassessment proceedings void and illegal. Various legal precedents were cited to support the invalidity of notices leading to void proceedings. The High Court concurred with the Tribunal's decision, affirming that the defective notices could not be cured by filing returns, thus rendering the reassessment invalid. The judgment favored the assessee, with no order as to costs.