TMI Blog2012 (5) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 1961 ) has been filed against the judgment and order of the Income Tax Appellate Tribunal (hereinafter called the Tribunal ) dated 19/9/2001 passed in ITA No. 1200/Alld./94 for the Assessment Year 1989-90. Appeal has been admitted on following two substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal is justified in upholding that the notice issued U/S 148 of the Act without specifying the status of the assessee is invalid in the eyes of law? 2. Whether on the facts and in the circumstances of the case, the Tribunal is justified in upholding that the validity of notice U/s 148 without specifying the status of the assessee could not be saved under the provisions of Section 292-B of the Act? The brief facts of the case which is necessary for answering the above two substantial questions of law are: A notice under Section 148 of the Act, 1961 was issued to the assessee namely:M/s Kant Travels 917, Daraganj, Allahabad on 12/8/1991, in response to which the assessee filed his statement on 05/9/1991 stating that he has already filed return on 17/5/1991 which may be treated in compliance to the above notice. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as without jurisdiction. Present is not a case where notice has been issued in favour of one assessee and the assessment has been framed against another assessee. The notice was issued against the firm and the assessment has been framed against the firm. In support of his submission, Shri Shambhu Chopra, learned counsel for the appellant has placed reliance on the judgments of Calcutta High Court and Punjab Haryana High Court in Swaran Kanta Vs. Commissioner of Income Tax, 176 ITR 291; Commissioner of Income Tax Vs. Rajbir Singh, 233 ITR 126 and Mulchand Rampuria Vs. Income-Tax Officer Anr,758 ITR 252. Shri S.D. Singh, learned counsel for the respondent submits that there being no valid notice issued under Section 148 of the Act, 1961, the entire proceedings are vitiated and void-abinitio. He submits that the assessing officer can assume jurisdiction to proceed with the assessment only when a valid notice is served. He submits that the assessee having earlier filed his return as a registered firm and the notice was issued to the assessee as an unregistered firm is invalid and no error has been committed by the Tribunal in setting-aside the assessment order. He further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the CIT (Appeals) regarding the validity of the notice issued under Section 148 of the Act, 1961. Even when the appeal was filed before the Tribunal no such objection was raised and the objection was raised only as an additional ground before the Tribunal challenging the validity of the notice issued under Section 148 of the Act, 1961. The assessment order also indicates that the assessee has been assessed as an unregistered firm which is clear from Column.5 of the assessment order dated 16/11/1993. The submission of Shri S.D. Singh, learned counsel for the respondent is that the assessee is a registered firm and the proper description of the assessee was not there in the notice issued under Section 148 of the Act, 1961. The assessee was addressed in the notice as M/s Kant Travels 917, Daraganj, Allahabad and the assessing officer proceeded to assess the assessee as an unregistered firm. The fact that the assessee participated in the proceedings and filed his statement referring to his return which has been earlier filed on 17/5/1991 clearly proves that there was no doubt about the identity of the assessee as was disclosed in the aforesaid notice. The assessee through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se clearly proves that the notice is in substance and effect in conformity with and according to the intent and purpose of the Act. The intent and purpose of the Act is to inform the assessee that income has escaped assessment. The provisions of Section 292-B of the Act, 1961 is fully attracted and present is not a case where notice under Section 148 can be said to be invalid. The Tribunal in its judgment dated 19/9/2001 has allowed the appeal on the sole ground that notice under Section 148 is not valid since it does not indicate that the notice is issued to a registered firm or to an individual who may be carrying the proprietary business or the firm whether registered or unregistered. The Tribunal took the view that notice is addressed in such a manner that it does not specify the status of the assessee and in view of the fact that the status of the assessee has not been specified, the notice is not valid in the eyes of law. Holding that the notice was valid, the appeal was allowed and the entire proceedings were set-aside. The status of the addressee in the notice under Section 148 of the Act, 1961 should be relevant when the notice is addressed to a different entity and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question was not valid in law. The question of status of assessee and correct description is a relevant factor, but the description of the status may or may not invalidate the proceedings. Sometimes, it may not invalidate the proceedings and can be saved under Section 292-B of the Act, 1961, and in some cases the invalidity may go to the very root of the proceedings. A Division Bench of the Calcutta High Court had considered the issue of status of the assessee in Mahabir Prasad Poddar Vs. Income-Tax Officer, B Ward, Distt. 1(2), Calcutta Ors, 102 ITR 478. Following was laid down at pages 489-490 which is quoted below: 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 the assessee was wrongly described, it can always be corrected by the Income-tax Officer in the course of the assessment proceedings, but that cannot affect the validity of the assessment proceedings. The position would of course be different wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce "is in substance and effect in conformity with or according to the intent and purpose of this Act." Now the cases cited by the learned counsel for the respondent needs to be considered. In the case of Bhagwan Devi Saraogi (supra) a notice was issued under Section 148 of the Act, 1961 to one Smt. B.D. Saraogi and others. The notice was challenged on the ground that it does not indicate whether B.D. Saraogi and others was a firm or an association of persons. Following was laid down at page 5 which is quoted below: As I have already observed in the instant case the notice does not even mention A.O.P. On the basis of the aforesaid decisions I must, therefore, hold that the notice in the instant case is invalid and on the basis of the invalid notice the ITO does not acquire any jurisdiction to reopen the assessment and to proceed with the reassessment proceeding. The failure to issue a valid notice deprives the ITO of the jurisdiction conferred on him under the Act and the proceedings taken by the ITO in pursuance of an invalid notice must necessarily be illegal and void. In this view of the matter, I do not consider it necessary to decide the further question whether the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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