PARAMESWARA BALLAKURAYA Vs. COMMISSIONER OF AGRICULTURAL INCOME TAX

JUDGEMENT

(1.) On receipt of Annexure A-l, A-2 and A3 assessment orders dated 31-10-1977 respectively for the assessment years 1974-75, 1975-76 and 1976-77, the petitioner filed his objections in which he never raised a question as to whether the notice was bad for not having sent separate notices to him, one in his capacity as the manager of the H.U.F. properties, and the other as the trustee of the trust properties. He filed the return pursuant to the notice disclosing only the income from the properties held by him in his capacity as the manager of the H.U.F. properties, concealing the income derived by him in his capacity as the trustee of the trust properties. The main contention before the Agricultural Income Tax Officer was that he was entitled to exemption under S.4(3) of the Agricultural Income Tax Act, 1950 (the Act). The Agricultural Income Tax Officer who inspected the property issued a reassessment notice and completed the assessment without accepting his contention. In appeal and second appeal the assessee had lost. The Appellate Tribunal confirmed the assessment made by the Agricultural Income tax Officer, separately assessing the income from the agricultural properties held by the assessee: (1) in his capacity as the manager of the H.U.F. properties; and (2) as the trustee of the trust properties. The questions referred to this Court under S.60(3) of the Act read as follows:-

(2.) We may atonce dispose of the second question inasmuch as on the very face of it the contention of the assessee cannot be sustained. S.4(3)(a) of the Act reads

(3.) As far as the first question is concerned, there is no dispute that a notice under S.35 was received by the assessee who did not file any return for the respective years. There is also no dispute that he had been holding a large extent of agricultural lands. He was, by the notice, required to submit a return, inasmuch as in this case the income escaped was not discovered on information of the assessing authority, but on the fact that the assessee had not filed any return at all. So what he was required at all was to file a return of the income derived by him from his agricultural properties. No doubt, he could have shown separately the income derived by him in his different capacities, one as the manager of the H.U.F. properties and the other as the trustee of the trust properties. What he did was, to furnish the income with respect to the properties belonging to the H.U.F., without disclosing either he had other properties or that he was holding land in any other capacity. The Agricultural Income Tax Officer had been very careful in dealing with the assessee inasmuch as, instead of clubbing together the entire income, what he did was to assess him separately for the income derived from the H.U.F. properties and the income derived from the trust properties. We are not convinced that the proceedings were initiated invalidly for the reason that two separate notices had not been issued to the assessee calling upon him to file separate returns for the H.U.F. properties on the one hand, and the trust properties on the other. The assessee who did not care to file the return was alerted by Annexure A-l to A-3 to file the returns, and it was without disclosing that he was holding other properties also that he filed the return with respect to H.U.F. properties. The counsel for the assessee has sought to rely on the decisions reported in Commr, of Income Tax, Andhra Pradesh v. K. Adinarayana Murty ( 1967 (65) ITR 907 ) and Commr, of Income tax v. Saraswati Bai (Smt.) & others (1981 (23) CTR 330). These are cases which could be distinguished on facts. On the other hand, we find authority for the proposition that merely for the reason that there was defect in the notice issued, the assessment was not liable to be quashed (Mahabir Prasad Poddar v. I.T.O. (Cal.) 1976 (102) ITR 478 ). We also find support for this view taken in Mohd. Haneef v. Commissioner of Income Tax ( 1955 (27) ITR 441 )and Balchand v. Income Tax Officer ( 1969 (72) ITR 197 ).