Law:

Section:

Section 148 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 1998-99 - Assessing Officer re-opened assessment of assessee under section 147 and issued notice - Husband of assessee had received notice - Thereafter, husband participated in assessment proceedings and Assessing Officer made reassessment - Appellate authority accepting submission of assessee that Assessing Officer was required to issue notice to assessee and receipt of notice by husband would not subserve purpose, set aside order of Assessing Officer - Whether impugned order was to be set aside on basis that notice on husband had been served and assessee herself had appeared in proceeding before Assessing Officer - Held, yes - Whether, however, as authorities had not dealt with case on merits, it was to be directed that Commissioner (Appeals) would deal with matter on merits of case - Held, yes CASES REFERRED TO Dr. H.R. Rai v. CIT [1984] 145 ITR 809 (MP) [Para 3], CIT v. Bhanji Kanji's Shop [1968] 68 ITR 416 (Guj.) [Para 3] and Thangam Textiles v. First ITO [1973] 90 ITR 412 (Mad.) [Para 3]. Rohit Arya for the Appellant. Sumit Nema for the Respondent. JUDGMENT Dipak Misra, J. - In this appeal preferred under section 260A of the Income-tax Act, 1961 ('the Act'), the substantial question of law that has been posed by the Revenue for consideration is whether, on the facts and circumstances of the case, the Tribunal was justified in confirming the order of the Commissioner of Income-tax (Appeals) who had held that reassessment was invalid as there had been no personal notice on the assessee under section 148 of the Income-tax Act, 1961, though as a matter of fact the notice was served on the husband of the assessee and the assessee had participated in the proceeding before the Assessing Officer? 2. A short resume of facts is necessitous. The respondent-assessee filed the return for the assessment year 1998-99 declaring the income of Rs. 28,850. The Assessing Officer on the basis of the information from the State Bank of Indore at Chhatarpur came to know that there is huge difference in the stock shown by the bank authorities and the stock shown by the…

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