TMI Blog1980 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... partners are, in respect of the share income derived by them from the, firm, being assessed as individuals, the remaining partners are, in respect of such share income, being assessed as members of their HUF. In due course, the firm was assessed to income-tax for the assessment year 1966-67, and for the same year, its partner, namely, Shri Sheo Mohan Lal, representing his HUF, was assessed to tax under the provisions of the W.T. Act. On 28th October, 1976, the main business premises of the firm, as also its show-rooms at Hotels Clerk, Shiraz and Holiday-Inn and the residential premises of its partners were searched by the I.T. authorities. As a result of the search, the I.T. authorities are said to have seized considerable amount of jewellery, etc., as also certain books of the firm. On 31st March, 1976, the ITO issued notices under s. 148 of the I.T. Act to the firm, M/s. Ganeshi Lal Sons, for reopening the firm's assessment for the year 1967-68, and requiring it to file a revised return of the income. Likewise, on the same day, the WTO issued notices under s. 17 of the W.T. Act to Sri Sheo Mohan Lal (HUF) and Shri Brij Mohan Lal for making fresh assessment of their wealt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, 1976. As, according to law, the petitioners had been served with the notices issued to them under s. 148 of the I.T. Act and s. 17 of the W.T. Act on 31st March, 1976, within eight years of the end of the assessment year 1967-68, the proceedings cannot be held to be barred by time. In this connection, respondents produced the original record before us. The record shows that apart from sending notices to the petitioners by registered post, the ITO/WTO made an effort to, as permitted by s. 233 of the I.T. Act, serve notices dated 29th March, 1976, for reopening their respective income-tax/wealth-tax assessments for the year 1967-68, in accordance with the procedure prescribed under the Code of Civil Procedure as well. On 31st March, 1976, the process-server, who went to serve the notices on the petitioners, reported that each and every person whom he met at the address mentioned in the notices refused to accept the same. The same day, the ITO directed the inspector to serve the notices upon the persons mentioned therein by affixation. The process-server then reported that, as directed by the ITO/WTO, the notices were, in the presence of the inspector, Sri Suman Gupta, affixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agents empowered to accept the same. It is also clear that the notices meant for M/s. Ganeshi Lal Sons could be served on any person who was a partner of the firm during the period relevant to the assessment year 1967-68. The record shows that an attempt was undoubtedly made by the process-server to serve the notices on the firm, M/s. Ganeshi Lal Sons, in the aforesaid manner but neither the partners of the firm nor any person authorised to receive notices on their behalf was willing or available to accept the same. It appears that when the process-server and the inspector went to the offices of M/s. Ganeshi Lal Sons they were informed that the partners were at their residences. The inspector and the process-server then went to the residences of the partners which were in the same compound and there also the partners were not available. Whereas some of the employees informed the inspector that the partners had gone out, some other employees told him that they were inside their house. The fact, however, remains that the partners of the firm, M/s. Ganeshi Lal Sons, including the petitioners, Sri Sheo Mohan Lal and Sri Brij Mohan Lal, on whom the notices under the I.T. Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1973] 89 ITR 136 (All) and urged that the notices cannot be held to be validly served upon the petitioners by affixation unless the ITO/WTO had examined the serving officer with a view to satisfy himself as to whether the circumstances justified affixation of notices and whether the service had been effected in accordance with the provisions contained in O. V of the CPC. Since the ITO/WTO did not examine either the inspector or the process-server, he could neither declare the notices to have been served nor can it be said that the notices have been served upon the petitioners on 31st March, 1976, within the period of limitation. We are unable to accept this submission. All that has been laid down in the aforesaid decision is that where the serving officer claims to have served the notice by affixation and he does not file an affidavit indicating the circumstances in which he had affixed the notices, it is obligatory upon the court to examine on oath the serving officer before declaring the service to be duly effected. It does not lay down that even in a case where the serving officer makes a statement on oath, the ITO is bound to examine the serving officer before holding the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners had gone out. On the other hand, some of the employees informed him that the partners were inside their houses. Facts of this case are, therefore, distinguishable and the petitioners cannot, derive any advantage from the observations made in the aforesaid judgment. Next case cited by the petitioners is the case of M. O. Thomas v. CIT [1963] 47 ITR 775. In this case, the Kerala High Court held that before notice sent otherwise than by post can be said to have been served on the assessee, it must be shown that the provisions of O. V of the CPC had been strictly observed. We have already indicated that in the case before us there has, in fact, been strict compliance with the provisions of O. V of the CPC. In Gopiram Agarwalla v. First Addl. ITO [1959] 37 ITR 493 (Cal), it was held that the mere fact that the serving officer did not find the party to be served with the notice at his address was not sufficient to establish that he could not be found. It must be shown not only that the serving officer went to a place at a reasonable time when he would be expected to be present but also that he was not found and proper and reasonable attempts were made to find him eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced before us the files which indicates the reasons why the ITO/WTO thought that the income/ wealth of the petitioners had for the year 1967-68, escaped assessment. According to the records produced by the respondents, search operations under s. 132 of the I.T. Act, 1961, was carried out and certain books of account of the firm were seized. Information was given to the ITO that M/s. Ganeshi Lal Sons were, during the previous year relevant to the assessment year 1967-68, alleged to have made certain cash sales to M/s. Barjeet and Company. One Sri Jitendra Narottam Das Shah, trading in the name of M/s. Barjeet and Company, filed an affidavit stating that purchases to the tune of Rs. 99,720 purported to have been made by him from M/s. Ganeshi Lal Sons were fictitious. A scrutiny of the balancesheet of the firm, filed at the time of the assessment, revealed that the name of the said Jitendra Narottam Das Shah did not appear therein. The name of the said party also did not appear in the details of over Rs. 10,000 filed by the assessee during the course of the assessment proceedings. This made the ITO believe that the alleged sales which had been shown by the firm, M/s. Ganes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 2,75,000 had escaped assessment because of undervaluation made by the valuer of Sri Brij Mohan Lal's property at the time of original assessment. In our opinion, there was material on the record on the basis of which the WTO could entertain a belief that a part of the wealth of the petitioner, Brij Mohan Lal, had escaped assessment and he had ample jurisdiction to issue notice under s. 17 of the W.T. Act. In the end, learned counsel for the petitioner, M/s. Ganeshi Lal Sons, invited our attention to s. 282(1) of the I.T. Act, which lays down that notice or requisition under the Act can be served on the person named therein either by post or as if it were a summons issued by a court under the Code of Civil Procedure and as provided in sub-s. (2) any such notice or requisition may, in the case of a firm, be addressed to any member of the firm. He contended that according to this section all notices meant for service on a firm must necessarily be addressed and served upon one or the other partner of the firm. The notices cannot be addressed to the firm itself, more so in the case of a dissolved firm (the petitioner claimed that the firm, as it stood prior to 1967-68, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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