Law:

Section:

Section 148, read with section 143, 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 1955-56 and 1956-57 - Whether power to assess under section 23(3) of 1922 Act is wide enough and, determination of total income takes within its purview finding of nil income or more chargeable income than what has been returned - Held, yes - Assessee had been filing returns, one as an individual and other as a HUF and they were assessed as such - In relevant assessment year ITO found that income returned by assessee as an individual in fact belonged to joint family and assessed joint family accordingly - On returns filed as an individual ITO noted "N.A." - However, neither of those orders was communicated to assessee - AAC, on appeal, directed ITO to assess assessee in his individual capacity in respect of income clubbed with income of family - Treating this as information under section 34(1)(b) of 1922 Act, notices were served on assessee to charge income returned by him as an individual - Assessee's case was that as returns for two assessment years had not been disposed of, proceedings under section 34(1)(b) of 1922 Act were invalid - Whether returns of assessee as an individual were closed by valid and proper orders hence said returns could no more be considered as pending - Held, yes - Whether failure to serve notices of assessment orders had not effect of rendering them invalid - Held, yes - Whether, therefore, assessment made under section 34(1)(b) of 1922 Act was justified - Held, yes FACTS The assessee was the son of 'V'. Until 1939, they constituted a Hindu joint family. But in that year they became divided and the partition of the family was accepted by the revenue with effect from 1-4-1939. Thereafter, the father was assessed as an individual and the son in the status of a HUF 'V' died on 17-5-1941, leaving a will bequeathing his entire property to his son, assessee. Since the death of his father, assessee submitted returns, one as an individual and the other as a HUF, and they were assessed as such. He made similar returns for…

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