TMI Blog2005 (7) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing question under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "Act") relating to the assessment year 1986-87 for opinion to this court: "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally right in confirming the order of the learned Commissioner of Income-tax (Appeals) who held that the Assessing Officer was not having jurisdiction to make an assessment on AOP of two members?" The brief facts of the case are as follows: The assessing authority issued notice under section 148 of the Act to Sri Ashok Kumar Bharti, Sri Vijay Kumar Goel and Sri S.P. Garg the members of the AOP through Shri Ashok Kumar Bharti, 31, Phool Bagh Colony, Meerut, calling upon the assessee to furnish the return of "income of the AOP consisting of Shri Vijay Kumar Goel, Shri S.P. Garg and you". This notice is dated February 15, 1988. The return of income was filed on March 30, 1988, wherein income of Rs. 16,340 was disclosed. Assessment was completed by the Assessing Officer on March 30, 1988, on an income of Rs. 1,61,934 made on the AOPs comprising of two persons only, namely, Shri Ashok Kumar and Shri Vijay Kumar Goel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly when proper notice under section 148 of the Act had been issued. In the present case, the assessment order in the status of AOP consisting of Sri Ashok Kumar and Sri Vijay Kumar Goel was passed without any notice under section 148 of the Act inasmuch as the alleged notice issued under section 148 of the Act was not to the AOP consisting of Ashok Kumar and Vijay Kumar Goel, but to the AOP consisting of Ashok Kumar, Vijay Kumar Goel and S.P. Garg. He submitted that mere participation in the assessment proceedings could not validate the proceedings which are ab initio illegal and without jurisdiction for want of valid notice. In support of his contention, he relied upon the Full Bench decision of this court in the case of Laxmi Narain Anand Prakash v. CST reported in [1980] 46 STC 71 (All) [FB]; [1980] UPTC 125. He further submitted that the AOP is a separate legal entity taxable under the Income-tax Act. He submitted that an association of persons is constituted by more than one person with the object to earn profit, therefore, one person can form numbers of AOP along with various persons and each association of persons consisting of different members constitutes a separate legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court held that the service of the notice under section 21 which is equivalent to the notice under section 148 of the Act, is a condition precedent to assume jurisdiction and mere knowledge or participation in the proceedings will not validate the proceedings which are not proper. In the case of Sikri Brothers and Co. v. CST reported in [1979] UPTC 1490, this court held as follows: "Invalidity of the notice goes to the very root of the matter and when once it is found that the notice instead of being addressed to the dealer who was to be made liable for the escaped turnover was addressed to an entity which did not exist, whole proceeding stand vitiated in law. The defect in notice was fatal to assumption of jurisdiction by the Sales-tax Officer." In the case of Gokul Chand v. ITO reported in [1995] 211 ITR 738, the Division Bench of this court held that where a person has a dual capacity as an individual as well as karta of a Hindu undivided family, it is necessary to specifically mention in the notice of reassessment the capacity in which the assessee is sought to be reassessed. In the absence of status being mentioned in the notice it was held invalid. In the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." In view of the above principle of law laid down by the various courts, it is settled that the notice under section 148 of the Act is a jurisdictional notice and unless a proper and valid notice is issued and served, jurisdiction to make the assessment cannot be assumed. Notice under section 148 of the Act has been held as a condition precedent for a valid assessment. It has also been held that in the notice the correct status should be mentioned and if the person has a dual capacity, the correct status of the person against whom reassessment order is proposed to be made is to be mentioned in the notice under section 148 of the Act and in the absence of a notice to the assessee against whom reassessment order is proposed, the said order is held to be invalid. In the present case, the reassessment order was proposed to be made and has been made in the status of AOP consisting of Shri Ashok Kumar Bharti and Sri Vijay Kumar Goel, while admittedly, the notice was issued to the AOP consisting of Shri Ashok Kumar Bharti, Shri Vijay Kumar Goel and Shri S.P. Garg. A perusal of the assessment order also shows that the entire material which has been considered for making the reassessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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