HARISH AGRAWAL Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE material facts giving rise to this petition under Arts. 226 and 227 of the Constitution are as follows : THE petitioner is the karta of the HUF known as Harish Agrawal, HUF. THE petitioner voluntarily submitted return of his income in the status of HUF for the asst. yr. 1978-79. THE previous year having ended on 31st March, 1978. In the return the petitioner disclosed his income as Rs. 266 derived from the property, being 10 per cent share of the income from the property, held in co- ownership concern, Sadhna Enterprises as per computation of income. It is alleged that the respondent-ITO made enquiry into the aforesaid return. However, on 23rd March, 1981 the respondent sent a letter (Annex. `B') to the petitioner stating that as the above return is claimed to have been filed voluntarily by him declaring total income below the non-taxable maximum limit for the respective assessment year the same is not covered by any of the sub-Section of s. 139 of the IT Act, 1961 (`the Act'). THE same, therefore, could not be proceeded with for making of regular assessment. On the same day the respondent issued notice to the petitioner under s. 148 of the Act, stating therein that he had reason to believe that the pettioner's income in respect of which he is assessable for the asst. yr. 1978-79 has escaped assessment within the meaning of s. 147 of the Act. THE respondent proposed to assess the income for the said assessment year. THE petitioner was, therefore, required to deliver to the respondent, within 30 days from the date of the service of the said notice (Annex. `A'), a return in the prescribed form of his income in respect of which he was assessable for the said assessment year. THE petitioner has prayed that as the respondent had no jurisdiction to issue notice under s. 148 to him, the notice (Annex. `A') deserves to be quashed.

(2.) ALONG with the return the respondent filed a copy (Annex. R-3) of the proceedings dt. 23rd March, 1981 which contains reasons for issuance of notice under s. 148. In Annex. R-3 it is stated as follows :

(3.) THE decision of the Supreme Court in CIT vs. K. Adinarayan Murty (1967) 65 ITR 607 (SC) relied upon by the ITO for holding that if the assessment was framed on the basis of the return filed by the assessee it would be invalid, is not applicable to the present case and it was not relied upon by the learned counsel for the Department in support of the notice issued by the respondent under s.148. THE notice GIR No. H-201 dt. 23rd March, 1981 (Annex. `A') issued by the respondent under s. 148 to the petitioner, therefore, deserves to be quashed.