Law:

Section:

Section 171, read with section 148 of the Income-tax Act, 1961 - Hindu undivided family - Assessment after partition - Assessment year 1955-56 - Whether where Hindu undivided family was not assessed to tax earlier, after partition it could not be assessed to tax as a Hindu undivided family - Held, yes - Whether, therefore, notice issued to said HUF under section 148 was to be quashed - Held, yes Section 148 of Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 1955-56 - Process server visited residence of assessee only once and stated that he could not find assessee and thus, affixed notice - Whether, on facts, there was no proper service of notice and, therefore, notice was to be quashed - Held, yes FACTS The petitioner carried on business which was started as proprietary concern by one 'G'. After 'G's death dispute arose among family members and partition suit came to be filed in 1957. In the partition suit, an arbitrator was appointed. The business was treated as part of joint family property to avoid the dissolute. In mutual and amicable settlement, the business was allotted to the petitioner. In 1968, the petitioner was served with notice under section 148 issued on the joint family. The petition challenged the notice invoking Article 226 of the Constitution. The petitioner also challenged the notice, apart from merit, on the ground that there was no proper service of notice. It was the case of the department that a notice under section 148 was served in respect of the said joint family on 31-3-1964, by affixation. HELD The partition suit was filed in February, 1957, and in June, 1958, the receiver in the said partition suit handed over the said properties to the petitioner. The notice under section 148 was served by affixation on the 31-3-1964. The said HUF was never assessed to tax before. This HUF was governed by the Dayabhaga system of Hindu law. The assessment sought to be re-opened was in respect of a year when undoubtedly there was a joint undivided family. Disruption was claimed to have taken place after the institution of the partition suit in 1957, that is to say, subsequent to the relevant accounting year…

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