C.I.T.AMRITSAR vs. RAJBIR SINGH

Income Tax Reference No. 15 of 2000 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Reference Nos. 15 of 2000 Date of decision: 6.12.2010 The Commissioner of Income Tax Amritsar --- Petitioner Versus Rajbir Singh Karta of Ch. Kesho Dass (HUF), Pathankot --- Respondent CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present: Mr. Sukant Gupta, Standing Counsel for the Revenue Mr. Salil Kapoor, Mr. Saurabh Kapoor and Mr. Ankit Gupta, Advocates for the respondent. --- AJAY KUMAR MITTAL, J. This order will dispose of three References, Income Tax Reference Nos. 15 to 17 of 2000 as the same question of law is involved therein. The facts have been taken from Income Tax Reference No. 15 of 2000. In this reference under Section 256(2) of the Income-tax Act, 1961 (for short “the Act’”), the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, (in short “the Tribunal”) on the direction of this Court, vide order dated 28.8.1997, arising out of ITA No. 350

Income Tax Reference No. 15 of 2000 2 (ASR/1991 at the instance of the Revenue, relating to assessment year 1977-78, has referred the following question of law, for the opinion of this Court: “Whether on the facts and in the circumstances of the case and also in the light of the provisions of Section 292B of the Income Tax Act, 1961, notice issued under section 148 of the Act was not invalid specially when the assessee had consciously and intentionally waived his right to object to the defect in the notice? The facts, in brief, necessary for adjudication and as narrated in the reference, are that no return of income had been filed by the assessee for the assessment years 1976-77, 1977-78 and 1978-79 within the time permissible under Section 139 of the Act. Later on, having come to know that certain income chargeable to tax had escaped assessment, the assessing officer initiated proceedings under Section 147(a) and issued notices under Section 148 on 18.3.1985. Thereafter, it was conveyed on behalf of the assessee vide his letter dated 10.12.1987 and also through his counsel Shri Anil Mahajan, Chartered Accountant, vide his letter dated 21.1.1988 and order sheet entry dated 4.2.1988, that the return of income already filed on 16.6.1982 in the capacity of HUF may be treated as return filed in compliance to notice under Section 148 dated 18.3.1985. Ultimately, assessments were completed under Section 144 read with Section 147, but the same were challenged by the assessee before the appellate authority on the ground that the notices issued under Section 148 did not specify the status of the assessee. The plea raised, in other words, was that it Income Tax Reference No. 15 of 2000 3 was not discernible from the notices, whether the notices under Section148 had been issued to the assessee in his individual capacity or in the capacity of HUF. The appellate authority held that the assessment had been completed in the status of HUF correctly. The Tribunal, however, cancelled the assessments by holding that the notices under Section 148 were totally vague and did not specify the status in which the returns were to be filed and such notices would not give rise to assume jurisdiction for framing valid assessment. The Commissioner of Income-tax {in short “the CIT”}, filed a Reference Application under Section 256(1) of the Act requesting the Tribunal to refer the aforesaid question of law for the opinion of this Court. The application was, however, dismissed by the Tribunal and the Revenue thereafter filed a petition under Section 256(2) of the Act and it was in that petition that this Court directed the Tribunal to refer the aforesaid question for its opinion, and it is how the same has been referred to.

We have heard learned counsel for the parties and have perused the record. Learned counsel for the Revenue submitted that notice under Section 148 of the Act were issued in the name of Kesho Dass and the learned counsel for the assessee had admitted and made a statement that the returns already filed by the assessee be treated to have been filed in response to notices issued under Section 148 of the Act in the status of Hindu Undivided Family (HUF). According to the learned counsel, once the assessee had filed returns in response to re-assessment notice under Section 148 in the status of HUF, he

Income Tax Reference No. 15 of 2000 4 could not take a plea that the notice issued by the assessing officer did not disclose the status of the assessee and was, thus, invalid. Alternatively, it was urged by the learned counsel that it was not a defect which could not be cured under Section 292B of the Act, and the reassessment proceedings had been validly initiated. It was also argued that no prejudice has been caused to the assessee by issuance of notice in which there was no specific mention of the status of the assessee. Reliance was placed on the judgments in Swaran Kanta v. Commissioner of Income Tax, (1989) 176 ITR 291 (Pb. & Hr.) and Deoria Oxygen Company v. Commissioner of Income Tax, (2007) 210 CTR Reports 509. Controverting the above submissions, learned counsel for the assessee submitted that the defect in the notice under Section 148 for re-assessment was a jurisdictional defect which could not be 460 (P&H) and Commissioner of Income Tax v. K. Adinarayana Murty, (1967) 65 ITR 607 (SC).

Income Tax Reference No. 15 of 2000 5 We have given our thoughtful consideration to the submissions of the learned counsel for the parties and find weight in the submissions made by the learned counsel for the Revenue.

Section 292B was incorporated by Taxation Law (Amendment) Act, 1975, w.e.f. 1.10.1975 which reads as under: “292B. No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice summons, or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.” The Section was inserted whereby no return of income, assessment, notice, summons or other proceeding shall be rendered invalid merely on account of any mistake, defect or omission where the return, assessment, notice, summons or other proceeding in substance and effect are in conformity with or according to the intention and purpose of the Act. By incorporating this provision, it has been made clear that purely technical objections carrying no substance shall not come in the way of validity of assessment proceedings etc. In other words, minor defects or irregularities in the circumstances aforesaid, would not negate the validity of the Income Tax Reference No. 15 of 2000 6 proceedings initiated by the assessing officer and the assessee would not be able to raise technical or venial defects in this regard. It has been recorded in the assessment order that the assessee vide letter dated 10.12.1987 and also his counsel, Shri Anil Mahajan, Chartered Accountant, vide his letter dated 21.1.1988 and had submitted that the return of income which had been filed on 16.6.1982 in the capacity of H.U.F. be treated to have been filed in pursuance to notice issued under Section 148 of the Act. In such a situation, learned counsel for the assessee was unable to point out any prejudice having been caused to the assessee. In the present facts and circumstances, notice issued under Section 148 of the Act by the assessing officer shall not render the proceedings invalid as the same are in substance and effect according to the intent and purpose of the Act falling under Section 292B of the Act and the proceedings cannot be held to be vitiated. In view of the aforesaid findings, the judgments on which reliance has been placed by the assessee have no applicability and do not support the case of the assessee. Resultantly, the question of law is answered in favour of the Revenue and against the assessee. The References stand disposed of. (AJAY KUMAR MITTAL) JUDGE (ADARSH KUMAR GOEL) December 6, 2010 JUDGE *rkmalik*

Income Tax Reference No. 15 of 2000 7