Law:

Section:

Section 147 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] - Income escaping assessment - General - Assessment year 1946-47 - Whether where a person, who is in receipt of and is controlling and managing income assessable to tax, files a return that return would be a valid and legal return for purpose of assessing that income - Held, yes - Notice under section 34 of 1922 Act was issued to assessee-HUF which was served on eldest male member of HUF, 'U' - 'U' had not attained majority at that time under Indian Majority Act, 1875 - 'U' filed return on behalf of HUF indicating that he was in charge of accounts and affairs of family and was in a position to file that return on behalf of assessee-HUF - Whether 'U' was de facto karta of assessee-HUF and at time when notice was served on him he had attained sufficient discretion for purpose of his being held to be an adult member of HUF for receiving notice under provisions of Act - Held, yes - Whether, therefore, notice was validly served on 'U' and return filed by him as karta of assessee HUF was legal and valid - Held, yes FACTS For the assessment year 1946-47, the karta 'S', filed a return of the assessee HUF and on the basis of that the assessment was completed. 'S' died and later on proceedings for the assessment year 1947-48 came up before the ITO and while dealing with those proceedings, he got definite information that income for the year 1946-47 had escaped assessment when the original assessment was made. He, therefore, issued a notice under section 34 which was addressed to the HUF. The notice was served on the eldest male member of the family 'U' who had become the karta of the family by that time. In response to the notice served on him, 'U' filed a return on 10-3-1948, and in that return described himself as the karta of the assessee family. The ITO did not accept the income shown in the return and computed the total income of the assessee. On appeal the AAC set aside the assessment. On appeal, by the revenue, the Tribunal held that on that date 'U' could not validly represent the assessee family. On these findings, the Tribunal quashed the tax which had been…

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