TMI Blog2004 (11) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the court was delivered by PRAKASH KRISHNA J.- The Income-tax Appellate Tribunal has referred the following two questions of law as per the direction of this court, under section 256(2) of the Income-tax Act, 1961, for opinion to this court for the assessment years 1965-66 to 1972-73: "(1) Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal could be said to be correct in deciding that the notice under section 148 of the Income-tax Act issued to the assessee-Hindu undivided family was not meant for it, but for the karta as an individual? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in annulling the assessment made by issue of notice under section 148 on the ground that no valid notice under section 148 was issued to the assessee-Hindu undivided family?" The assessee is a Hindu undivided family and it derived income for the aforesaid assessment years from property and dealings in silver utensils and yarn. After completion of the assessment for the assessment years 1965-66 to 1972-73, the business premises of the assessee were searched. The Income-tax Officer on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled in the status of Hindu undivided family, therefore, the notices were valid. For the assessment years 1968-69 and 1969-70, the Commissioner of Income-tax (Appeals) followed his earlier order and dismissed the appeals. The matter was taken up by the Department before the Appellate Tribunal for the assessment years 1965-66, 1970-71, 1971-72 and 1972-73 challenging the findings of the Commissioner of Income-tax (Appeals) that the notices issued under section 148 were invalid. The assessee also challenged the order of the Commissioner of Income-tax (Appeals) for the assessment years 1966-67, 1967-68, 1968-69 and 1969-70 regarding the validity of the notice issued under section 148 of the Act. The Tribunal came to the conclusion that the notices were issued to Shri Ram Lala Prasad in his individual capacity and were not issued to Shri Ram Lala Prasad as karta of Ram Das Deokinandan Prasad, Hindu undivided family. The notices were issued to him as proprietor of Ram Das Deokinandan, who was required to file the return for his individual income as a proprietor. It took the view that the notices issued under section 148 of the Act were invalid and the reassessments were unsustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 630 (SC), the question involved therein was a different one. The court in that case has posed the question involved in the case, in the following manner: "The short question which arises in this case is whether the return dated September 4, 1948, can be treated as a valid return under section 22(3) of the Act." The controversy in that case was under the old Income-tax Act and was with reference to section 22(3) of the Act. For the assessment years 1944-45 and 1945-46, the assessee did not file any return of income. The Income-tax Officer issued registered notices for both the assessment years under section 34 of the old Act. The assessee filed the return for the assessment years 1944-45 and 1945-46. The Income-tax Officer dropped the proceedings for the year 1944-45 as infructuous. But for the assessment year 1945-46 tax was levied, which was challenged in appeal. The matter travelled up to the Tribunal. The appeal was allowed in part. Thereafter, after obtaining the sanction of the Commissioner of Income-tax (Appeals), the Income-tax Officer issued a notice purporting to be under section 34 of the Act in respect of the assessment year 1944-45. The court was considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO [1976] 102 ITR 478 (Cal). In that case, the argument that in the reassessment notice it was not stated whether it was issued to the individual or a karta of the Hindu undivided family, therefore, the notice is invalid was repelled by the Calcutta High Court. The High Court took the view that this was the first year of the assessment and the assessee himself was taking a shifting stand. As a proposition of law, it accepted that reassessment could only be made after proper notice had been given of the reopening of the assessment to the assessee. But on the facts of that case, the High Court did not entertain the writ petition for the reason that the assessee himself was taking contradictory stands. In the facts of that case earlier the assessee filed a return in his individual capacity and thereafter filed a return that it was a Hindu undivided family. Indisputably, this was the first year of the assessment. On the facts of that case it was held by the Calcutta High Court that service of notice for reassessment without indicating the capacity could not invalidate proceedings as the status can be determined in the assessment proceedings. On a close reading of the judgment, it helps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made on the assessee-Hindu undivided family, as no notice had been issued to it under section 148 of the Act. In the case in hand the Tribunal, on the facts, has found that notice was issued to the assessee in his individual capacity and the income sought to be reassessed is that of the Hindu undivided family of which the assessee is a karta. Therefore, the case of Ishwar Singh and Sons [1981] 131 ITR 480 (All) is fully applicable to the present case and the notice to reassess the income of the assessee-Hindu undivided family is invalid. Consequently, the Income-tax Officer had no jurisdiction to pass the reassessment order against the assessee. A similar controversy came up for consideration before a Division Bench of this court in the case of Madan Lal Agarwal v. CIT [1983] 144 ITR 745. In this case the notice was issued to a person to file the return with respect to his individual income pertaining to the assessment year 1946-47. Subsequently, the Income-tax Officer informed him that the notice dated September 29, 1962, related to his Hindu undivided family and he should instead of the return of his individual income, file the return of the income of his Hindu undivided ..... X X X X Extracts X X X X X X X X Extracts X X X X
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