1965 (2) TMI 101 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the notice issued under Section 34 of the Income-tax Act.
2. Requirement of the notice to be in writing and signed by the Income-tax Officer.
3. Effect of the omission of the Income-tax Officer's signature on the notice.
4. Whether the defect in the notice can be waived by the assessee.

Detailed Analysis:

1. Validity of the Notice Issued Under Section 34 of the Income-tax Act:
The primary issue was whether the notice issued under Section 34 of the Income-tax Act, which was not signed by the Income-tax Officer, was valid. The court examined the statutory requirements and determined that a proper notice under Section 34 is a condition precedent to the exercise of jurisdiction by the Income-tax Officer. The court concluded that the notice must be in writing and bear the signature of the Income-tax Officer to be valid.

2. Requirement of the Notice to be in Writing and Signed by the Income-tax Officer:
The court analyzed the relevant statutory provisions, including Sections 34, 22, and 63 of the Income-tax Act, and Order 5, Rule 10 of the Civil Procedure Code. It was held that the words "serve on the assessee" in Section 34 indicate the necessity of a written notice. Additionally, the court stated that the words "Income-tax Officer" in the form should point out the person, which becomes definite when the Income-tax Officer puts his signature. Thus, the court concluded that Section 34 requires a notice to be in writing and signed by the Income-tax Officer.

3. Effect of the Omission of the Income-tax Officer's Signature on the Notice:
The court considered the implications of the omission of the Income-tax Officer's signature on the notice. It was held that the signature is an integral part of the notice, and its absence makes the notice invalid. The court emphasized that a notice without the signature lacks an essential and inseparable part, making it equivalent to no notice. The court cited various cases, including Commissioner of Income-tax v. Ramshukh Motilal and Narayana Chetty v. Income-tax Officer, to support the view that a valid notice is a mandatory requisite for assessment or reassessment under Section 34, going to the root of the jurisdiction.

4. Whether the Defect in the Notice Can be Waived by the Assessee:
The court examined whether the defect in the notice could be waived by the assessee. It was held that Section 34 is couched in a mandatory form in the public interest, and there cannot be any question of waiver in respect of a breach of a provision under Section 34. The court referred to the case of Narayana Chetty, which made it clear that the notice cannot be waived. The court also considered the possibility of the lawyer's knowledge and intentional relinquishment of the right on behalf of the client. It was concluded that the lawyer was not competent to waive the right without referring the matter to the client, and there was no evidence that the assessee had knowledge of the same.

Conclusion:
The court concluded that the notice under Section 34 of the Income-tax Act, 1922, to be proper, valid, and legal, requires the signature of the Income-tax Officer. Non-compliance with this requirement makes the notice and all subsequent proceedings void ab initio. The defect cannot be waived by the assessee, and the subsequent conduct of the assessee is irrelevant. The court answered in favor of the assessee and awarded costs of the application to the assessee.