Court upholds Income-tax Officer's assessment, dismisses challenge on notice validity under Income-tax Act.

The court dismissed the petition challenging the validity of notices of demand issued by the Income-tax Officer without prior rectification orders under section 35(5) of the Indian Income-tax Act, 1922. The court held that the Income-tax Officer had properly included the share income in the assessment with consent and notice to the petitioner, fulfilling legal requirements. Additionally, the court found that the petitioner had sufficient notice and opportunity to be heard in the proceedings, emphasizing that lack of a written notice does not invalidate the order if the assessee is aware of the proceedings. The petition was rejected with costs.

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Issues:
1. Jurisdiction of the Income-tax Officer in issuing notices of demand under section 156 of the Income-tax Act, 1961 without rectification orders under section 35(5) of the Indian Income-tax Act, 1922.
2. Validity of notices of demand without proper notice as required by section 35 of the Indian Income-tax Act, 1922.

Analysis:

Issue 1:
The petition challenged the validity of the notices of demand issued by the Income-tax Officer without prior rectification orders under section 35(5) of the Indian Income-tax Act, 1922. The court found no substance in this contention. The Income-tax Officer had included the share income in the assessment with proper consent and notice to the petitioner. For the assessment years in question, rectification was made with the consent of the petitioner's counsel. The court noted that the necessary orders for rectification were passed under section 35(5), fulfilling the requirements of the law. Thus, the first point raised by the petitioner failed.

Issue 2:
The second contention was regarding the lack of notice as required by the first proviso to section 35(1) of the Indian Income-tax Act, 1922. The court emphasized that the purpose of the notice provision was to ensure the assessee's opportunity to be heard before any adverse order. In this case, the petitioner had knowledge of the proceedings and was given a reasonable opportunity to be heard. The court cited a precedent where the Supreme Court held that if the assessee is aware of the proceedings and has been given a chance to be heard, the absence of a written notice does not invalidate the order. The court concluded that the petitioner had sufficient notice and opportunity to be heard in the rectification proceedings. Therefore, the second point raised by the petitioner also failed.

In conclusion, the court dismissed the petition, finding no merit in the challenges raised by the petitioner. The petition was rejected with costs, including a hearing fee.

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