Notice to karta sufficient in HUF reassessment; liability follows the substantive law applicable to the relevant assessment year.

In reassessment proceedings concerning a Hindu undivided family, notice to the karta was treated as sufficient representation of the family unit, so separate notice to each member was not required and the reassessment and apportionment were upheld. On the applicable assessment-year question, liability was to be determined under the substantive law governing that year; the later procedural provision under the Income-tax Act, 1961 did not prevent assessment where the corresponding pre-partition liability arose under the earlier regime. The challenge based on non-applicability of section 171 failed, and the writ petition was rejected.

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Issues: (i) whether reassessment and apportionment of tax liability of the members of a Hindu undivided family were invalid for want of notice to each member; and (ii) whether liability for the relevant assessment year could be fixed under section 171 of the Income-tax Act, 1961, or under section 25A of the Income-tax Act, 1922.

Issue (i): whether reassessment and apportionment of tax liability of the members of a Hindu undivided family were invalid for want of notice to each member.

Analysis: The assessment and reassessment related to income of the family for a period prior to partition. The karta had been served notice, had filed a return, and had pursued appellate remedies. The governing principle applied was that, in such proceedings, notice to every member of the family is not necessary when notice has been issued to the karta representing the family unit.

Conclusion: The reassessment and apportionment were not invalid for want of notice to each member; notice to the karta was sufficient.

Issue (ii): whether liability for the relevant assessment year could be fixed under section 171 of the Income-tax Act, 1961, or under section 25A of the Income-tax Act, 1922.

Analysis: The liability had to be determined by the substantive law applicable to the relevant assessment year. Even if section 171(6) of the Income-tax Act, 1961 was not attracted to an assessment made under the old regime, the liability could still be worked out under the substantive provision corresponding to the pre-partition assessment of a Hindu undivided family. An interpretation that would allow the assessees to escape assessment altogether was rejected.

Conclusion: The liability could be validly fixed on the basis of the applicable substantive law, and the challenge based on non-applicability of section 171 failed.

Final Conclusion: The challenge to the reassessment and apportionment was rejected, and the writ petition did not succeed.

Ratio Decidendi: In reassessment proceedings concerning a Hindu undivided family, notice to the karta is sufficient, and the liability for the relevant assessment year is governed by the substantive law applicable to that year, even if the later procedural provision is inapplicable.

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