Law:

Section:

Section 148, read with sections 143 and 153 of the Income-tax Act, 1961 [Corresponding to section 34(1), read with section 23 of the Indian Income-tax Act, 1922] - Income escaping assessment - Issue of notice for - Assessment years 1943-44 and 1944-45 - Three assessees, namely, a firm, a HUF headed by 'L' and 'D' son of karta of said HUF filed returns separately for relevant assessment years but two of them namely firm and 'D' were not assessed to tax on ground that existence of alleged partnership was not recognised by authorities and whole income of firm was treated as income of joint family - Even when validity of partnership was upheld by Privy Council only adjustment made was in income of joint family and no assessment was made on firm or 'D' - However, when concealment of income was found, HUF, firm and 'D' were asked to file their returns in terms of notice under section 34(1) of 1922 Act - Tribunal while setting aside reassessment of firm upheld reassessment of HUF and 'D' on ground that said assessments could be treated as assessment under section 23 of 1922 Act - Whether, on facts, impugned assessments could not be said to be made under section 23 of 1922 Act within time under section 34(3) of 1922 Act but one under section 34(1)(a) hence not valid - Held, yes FACTS The references related to the assessments for the years 1943-44 and 1944-45, account years 1942-43 and 1943-44 of three assessees (1) a firm, (2) a Hindu undivided family and (3) D, the son of the karta of the Hindu undivided family. In 1936 a Hindu undivided family with two branches headed by brothers, L and C, disrupted and the branch of L became a Hindu undivided family. In connection with the assessment for 1938-39 it was represented to the ITO that a partnership had come into existence during the relevant accounting year, the partners consisting of the Hindu undivided family represented by L with a 0-14-0 share and the son of L, D with a 0-2-0 share, although at the same time, D was still said to be a member of the joint family. This partnership was said to have started the Textile Mills. The ITO did not accept the alleged partnership on the ground that no individual member of a Hindu…

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