TMI Blog1982 (9) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... finally recognised that partition. In those proceedings, all the members of the quondam joint family were noticed and fully heard. After the recognition of this partition, the ITO reopened the proceedings and reassessed the petitioners. This assessment was set aside by the AAC by order dated August 26, 1967. Thereafter, the ITO issued a notice to Balchand Malaiya alone under s. 148 of the I.T. Act, 1961, in response to which he returned an income of Rs. 35,697 for the assessment year 1946-47. This return was filed on May 30, 1973. The ITO, vide order dated July 8, 1974 (annex. B), reassessed the income of the HUF at Rs. 1,45,700. At the same time, it also apportioned the liability of all the petitioners, who were the members of the then HU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a return and on being reassessed, had filed an appeal challenging the reassessment, and as his further appeal is said to be still pending, this petition on his behalf, is not tenable. Clearly, he has a right of appeal against the order of reassessment. He availed of that right. We would, therefore, decline to interfere in these proceedings under art. 226 of the Constitution on his behalf. The argument based upon the absence of a notice of the reassessment and rectification proceedings resulting in reassessment of tax and apportionment of liability ex facie appears to be attractive. Indeed, on an earlier occasion, a Division Bench of this court was successfully persuaded to accept this argument in Miscellaneous Petition No. 15 of 1975, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ITO then served the karta a notice directing to make a return in respect of the escaped income, which return was submitted in response to that notice. The escaped income was then assessed and demand was made on the karta and also on two other members of the family. The contention before the High Court was that the proceedings were irregular both at the stage of initiation and at the stage of completion. The High Court, however, held that no prejudice could be demonstrated due to the irregularities and, therefore, upheld the assessment. The Supreme Court, on the question of want of notice to each member of the dividend family, held as follows (p. 596): " It does not appear necessary, when proceedings are initiated under section 34 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and sub-s. (6) of s. 171 cannot be construed as embracing a case where assessment of an HUF is made under the provisions of the old Act. At the same time, it has been held that " the substantive law to be applied for determining the liability to tax must necessarily be the law under the old Act, for that is the law which applied during the relevant assessment years and it is that law which must govern the liability of the parties ". Even if, therefore, it were to be held that sub-s. (6) of s. 171 was not attracted, liability could well be fixed under the substantive provision contained in s. 25A of the 1922 Act. If the argument put forward by the learned counsel for the petitioners is accepted, the result would be that the petitioners woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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