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TaxTMI 
TaxTMI 
TaxTMI 
2004 (12) TMI 24
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....umstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the infirmity in the notices issued under section 148 of the Income-tax Act, 1961 was cured under section 292B of the above Act?" The facts of the case are as follows: The assessment years involved are the assessment years 1968-69 to 1976-77. The Tribunal in its order has held that the reassessment proceedings for the assessment years 1970-71 to 1976-77 are not valid and set aside the reassessment orders for these years with the direction to the Income-tax Officer to proceed to comply with the various provisions of section 171 of the Act. However, the service of the notice under section 148/139(2) for all these years was found valid and the jurisdiction for reassessment or assessment was correctly exercised by the Income-tax Officer. M/s. Munnalal Motilal was a Hindu undivided family of which Shri Munna Lal was the karta. This Hindu undivided family was duly assessed under the Act up to the assessment year 1966-67 vide GIR No. 711-M. Shri Moti Lal, the karta of the Hindu undivided family, died some time in the month of April, 1967. Thereafter the business which was carried on by M/s. Munnal....
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....cember 30, 1976, under section 151 of the Act. In the proposal submitted to the Commissioner of Income-tax, the Income-tax Officer recorded the reasons by describing the name of the assessee as "M/s. Sri Nath Suresh Chand Ram Naresh, karta Sri Nath, Mohalla Saraugi, Bara-banki". The status of the assessee was described as of Hindu undivided family. The Commissioner granted the sanction and notice under section 148 of the Act was issued on December 9, 1976, for the assessment years 1972-73 to 1975-76. Subsequently, a similar notices for the assessment years 1968-69 and 1969-70 were issued on January 28, 1977. A similar notices were issued for the assessment years 1970-71, 1971-72 on February 23, 1977. In the notice issued under section 148, the Income-tax Officer recorded the reasons "as return not filed". The above reassessment notices were duly served on Sri Suresh Chand, who filed returns declaring the incomes at nil figure. Along with the return he wrote a letter to the Income-tax Officer on April 3, 1977, stating that no business was being done in the name of the noticee, the notices were wrongly issued. However, it was stated that the returns were being filed in compliance wi....
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....partition has no relevance for income-tax purposes and such partition cannot be recognised in income-tax proceedings in the absence of an order recognizing the partition passed under the Act. In appeal the Appellate Assistant Commissioner confirmed this part of the order and he also took support from section 292B of the Act. In further appeal the Tribunal has confirmed this part of the assessment order and rejected the contention of the assessee that the reassessment notice was issued in the name of a wrong person and as such the entire proceedings are vitiated being without jurisdiction. However, the Tribunal has found force in the submission of the assessee that there was evidence to show that the claim of partition dated July 31, 1969, was made before the Income-tax Officer, which has not been enquired into. The Tribunal, accordingly, set aside the reassessment orders for the assessment years 1970-71 to 1976-77 and restored the matter to the file of the Income-tax Officer to proceed in the matter after complying with the provisions of section 171 of the Act and then reframe the assessment orders. Heard Shri Vikram Gulati, learned counsel for the assessee, and Shri Dhananjay Awa....
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....na Lal Moti Lal was not in dispute. The said Hindu undivided family continued even after the death of its then karta, namely, Moti Lal, although the assessee and its various members in their letters to the Income-tax Officer incorrectly described that the firm M/s. Munna Lal Moti Lal was dissolved in 1967, after the death of Moti Lal, but in the eyes of law, a Hindu undivided family is never dissolved on account of death of the karta and admittedly in the present case after the death of Moti Lal, the Hindu undivided family business was continued till the assessment year 1970-71 by Sri Nath as karta. The Tribunal has also observed that in the reassessment notice, the Hindu undivided family was named by the Income-tax Officer as M/s. Sri Nath Suresh Chand Ram Naresh, but he correctly stated the name of the karta as Sri Nath and no fault could be found out on the part of the Income-tax Officer for giving a different name. Reliance has been placed by the Tribunal in support of its finding on the cases of Mohammad Haneef v. CIT [1955] 27 ITR 447 (All) and Radhey Lal Balmukund, In re [1942] 10 ITR 131 (All). But these cases were rendered under the Indian Income-tax Act, 1922, and were no....
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....a particular assessee. The correct status of the assessee was that of a Hindu undivided family and since the notice was issued under section 34 of the old Income-tax Act to the assesses as an individual and for making assessment in that capacity, it was held that the proceedings taken under that notice were illegal and without jurisdiction. Under section 2(31) of the Act "person" includes an individual or a Hindu undivided family or company, firm, an association of person or body of individuals, whether incorporated or not, etc. They are distinct and different assessees and each one has a different legal entity so far as the Income-tax Act is concerned. The service of the prescribed notice on a particular assessee, who is to be assessed is a condition precedent to the validity of any assessment to be made under section 147 of the Act. It is the very foundation of the jurisdiction of the assessing authority. As indicated above, the Supreme Court in the case of CIT v. K. Adinarayana Murty [1967] 65 ITR 607 has held that if a notice has been issued to a person having been of a particular status as described in the notice, the reassessment proceedings assessing escaped income of a dif....
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....ord. The notice was intended to be issued to the assessee in the status of a Hindu undivided family but the notice was not addressed to the assessee-Hindu undivided family, an entity different from the assessee (individual) the notice issued to the assessee was vague and as such invalid. The vagueness of the notice, it was held, did not stand cured, because the Income-tax Officer at a latter stage informed the assessee that he was required to file his return in the status of Hindu undivided family. ITO v. Chandi Prasad Modi [1979] 119 ITR 340 (Cal) is an authority for the proposition that when the Income-tax Officer had full knowledge of the separate identity of two concerns but in spite of it there was neither anything in the notice nor otherwise to show to which of the two concerns, the partnership firm or the Hindu undivided family the notice was directed, it was held that as there was nothing to show whether the impugned notice was for the partnership or the Hindu undivided family, the impugned notice was vague and was invalid. The respondent in that case was a member of a Hindu undivided family, who carried on a joint family business under the name and style of Bhimraj Banshi....
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....of a valid notice under section 148 is the foundation for the initiation of reassessment proceedings and a condition precedent for the validity of the notice. A Full Bench decision of this court rendered under section 21 of the U.P. Sales Tax Act which is in pari material with section 147 of the Act says so. This has been so held in Laxmi Narain Anand Prakash v. CST [1980] UPTC 125; [1980] 46 STC 71 (All) [FB]. In this case the High Court has relied upon a number of cases relating to service of reassessment notice under the Income-tax Act including Bhagwan Devi Sarogi v. ITO [1979] 118 ITR 906 (Cal) and quoted the following passage from it: "... If the authority concerned does not acquire jurisdiction in the absence of a valid notice being served, the entire proceeding will be without jurisdiction and void, and even consent on the part of the assessee would confer no jurisdiction on the "Income-tax Officer." The Kerala High Court in P.N. Sasikumar v. CIT [1988] 170 ITR 80 has held that the issue of a notice under section 148 of the Income-tax Act, 1961, is a condition precedent to the validity of any assessment order to be passed under section 147 of the Act. It is also settled l....
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....ce did not contain the distinct signature of the Income-tax Officer. On this contention no finding was given by the Commissioner of Income-tax (Appeals). But the assessment itself was set aside by him on the grounds of want of initial jurisdiction. In the second appeal preferred by the Revenue, the Tribunal initially passed an order in favour of the assessee upholding the findings of the Commissioner of Income-tax (Appeals) as to non-maintainability of the provisions of section 147(b) and invalidity of the initiation of proceedings. Subsequently, the Tribunal, on a miscellaneous petition filed by the assessee pleading as regards the illegality of notice itself by reason of manner of signature of the issuing officer appearing on the notice came to the conclusion that the said notice does not bear the authentic signature of the issuing officer. The case was decided in this factual background. To say the least there is no similarity in between the facts of the case relied upon by learned counsel for the Revenue and the facts of the case in hand. In the case in hand there is no dispute with regard to the question that the reassessment notice was not signed by the officer concerned. The....