TMI Blog1970 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Officer, after obtaining the necessary satisfaction of the Commissioner and served on Mahabir Prosad Poddar on the 16th March, 1963. Mahabir Prosad filed his returns for all the aforesaid five years on the 18th October, 1963. Notices under section 142(1) in respect of the above years were served on 24th August, 1963. Thereafter, the premises of the petitioner were searched on the 1st October, 1964, and it is claimed in the petition that on 12th July, 1965, Mahabir Prosad as the karta of the Hindu undivided family applied under section 271(4A) to the Commissioner of Income-tax, West Bengal III, the respondent No. 4 herein, making a disclosure of the hitherto unassessed income of the Hindu undivided family and praying for a spread over of the tax payable in respect of the said disclosed income. It is further alleged in the petition that by his letter dated 26th August, 1966, addressed to Mahabir Prosad, the 1st respondent-Income-tax Officer informed him that the returns for the assessment years 1957-58 to 1963-64 had already been filed and for which the requisite notices under section 143(2) were being enclosed. It was further pointed out that no returns had been filed for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the impugned assessments. Prior to April, 1958, there was no income-tax file in the name of Mahabir Prosad, either in his individual capacity or as the karta of a Hindu undivided family as the department had no information that such an assessee with an assessable income existed. In 1961, information was received from the special investigation branch that during the period 1st April, 1958, to 31st March, 1959, a sum of Rs. 2,33,763.53 had been received by one Mahabir Prosad Poddar from India General Steam Navigation Rly. Co. Ltd., Calcutta, and a file in that name was started in December, 1961. From further investigation made by the special investigation branch it was ascertained that the total payments received by Mahabir Prosad during the calendar year 1959 amounted to Rs. 25,50,961. This information was conveyed to the respondent-Income-tax Officer in February, 1962, whereupon he started further inquiry. On or about the 13th December, 1962, the respondent-Income-tax Officer issued a notice under section 139(2) of the Act in the name of Mahabir Prosad for the assessment year 1962-63, and later Mahabir Prosad was examined under section 131 of the Act on 16th January, 1963. In h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 139(2) the assessee filed a return declaring his status as 'individual'. Later on he filed another return declaring his status as Hindu undivided family. The business which was said to have been carried on by the Hindu undivided family as well as the individual are the same. I have no objection to treat the assessee as Hindu undivided family on the basis of his own declaration. The status will, therefore, be taken as Hindu undivided family on the basis of revised admission made by the assessee." Dr. Pal for the petitioner contended that the impugned notices under section 148 were addressed to Mahabir Prosad as an inividual and in response to the said notices returns were filed in the status of an individual. The respondent-Income-tax Officer had, therefore, no jurisdiction to make an assessment in respect of the said notices in the status of a Hindu undivided family. As there is no dispute that originally the notices under section 148 were addressed to Mahabir Prosad as an individual it is not necessary to refer to certain authorities cited by Dr. Pal in support of his contention that the wording of the notices showed that they were issued to Mahabir Prosad as an indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the petitioner as a Hindu undivided family. Mr. D. K. Sen, learned counsel for the department, submitted that large sums of money were found to have been paid to Mahabir Prosad in the course of business without any assessments being made in respect of any income earned by that business. Enquiries revealed that an amount of over Rs. 35,00,000 had been amassed by Mahabir Prosad. Accordingly notices under section 34 were issued to Mahabir Prosad without indicating what the status of the assessee was as the department at that time had no knowledge as to who Mahabir Prosad was. In response to the said notices returns were filed showing the status as that of an individual and income was shown to be derived from the very same businesses which were later claimed to be the businesses of the Hindu undivided family. No claim was made in these returns that the income from the business belonged to the Hindu undivided family and not to the individual. Even at that stage when Mahabir Prosad was examined under section 139 in December, 1962, he did not claim that the business and income thereof belonged to the Hindu undivided family and not to him in an individual capacity. Mr. Sen further po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the case of the department. There is no dispute that enormous amounts of money had been received and considerable assets acquired by the petitioner in respect of which no tax has been paid and this application is a further attempt to avoid liability for payment of any tax due in respect of such receipts or such assets. In a very recent decision of the Gujarat High Court in Chooharmal Wadhuram v. Commissioner of Income-tax, the following observations at page 101 were made by that court : " But through some oversight the applications made by the Income-tax Officer to the Commissioner showed the status of the assessee as an association of persons. This was clearly a mistake and the question is whether this mistake had any invalidating consequence on the subsequent proceedings for assessment initiated by the Income-tax Officer after the grant of the sanction by the Commissioner. We do not think that the wrong description of the status of an assessee can have the effect of invalidating the proceedings for assessment initiated after obtaining the sanction of the Commissioner when the sanction is in terms granted to the initiation of proceedings against the assessee. If the status of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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