Law:

Section:

SECTION 147(a) OF THE INCOME-TAX ACT, 1961 - REASSESSMENT - NON-DISCLOSURE OF PRIMARY FACTS - ACCOUNTS OF M'S FAMILY BUSINESS WERE MAINTAINED FROM DIWALI TO DIWALI - FOR ASSESSMENT YEAR 1953-54, M WAS ASSESSED IN STATUS OF KARTA OF HUF, WHICH WAS PARTIALLY PARTITIONED IN NOVEMBER 1953 - DOCUMENTS SEIZED DURING RAID ON M'S PREMISES IN 1966 REVEALED THAT ASSESSES MAINTAINED DUPLICATE SET OF ACCOUNT BOOKS AND THAT THERE WAS A DISCREPANCY OF RS. 1,02,807 IN OPENING BALANCE FOR ASSESSMENT YEAR 1954-55 AND, THEREFORE, THERE WAS A CORRESPONDING DISCREPANCY IN CLOSING BALANCE FOR ASSESSMENT YEAR 1953-54 - ITO, ACCORDINGLY, REOPENED ASSESSMENT OF FAMILY FOR ASSESSMENT YEAR 1953-54 - WHETHER REOPENING OF ASSESSMENT OF ASSESSMENT YEAR 1953-54 JUSTIFIED - HELD, ON FACTS, YES SECTION 148 OF THE INCOME-TAX ACT, 1961 - REASSESSMENT - ISSUE OF NOTICE - ASSESSMENT OF FAMILY BUSINESS OF M WAS REOPENED AFTER HUF'S PARTITION - IN THE NOTICE, HE WAS REQUIRED TO FILE RETURN ON BEHALF OF HUF FOR RELEVANT ASSESSMENT THOUGH HE WAS NOT DESCRIBED AS KARTA OF HUF IN THE NOTICE - WHETHER IMPUGNED NOTICE WAS VALID - HELD, ON FACTS, YES SECTION 283(1) OF THE INCOME-TAX ACT, 1961 - NOTICE - WHEN FAMILY IS DISRUPTED - WHETHER IN A CASE WHERE NOTICE OF DEMAND IS SERVED ON ERSTWHILE KARTA ALONE OF PARTITIONED HUF, ENTIRE ASSESSMENT WOULD BE VITIATED - HELD, NO Facts For the assessment year 1953-54, M was assessed in the capacity of karta of HUF. The accounts of M's family business were maintained from Diwali to Diwali. In November 1953, there was partial partition in the HUF consisting of M and his two sons and the family business was partitioned in three equal shares. The assessments in subsequent years were done in the status of individual. Documents seized during a raid conducted on M's premises on 16-12-1966, showed that assessee was maintaining duplicate set of account books. For the assessment year 1954-55, the opening balance was Rs. 4,51,648 according to the seized books, while the original return had shown the same as only Rs. 3,48,841, which was also the closing balance of 1953-54. The ITO proceeded on the basis that there was an apparent discrepancy on the footing that the closing…

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