Law:

Section:

Section 148 of the Income-tax Act, 1961 [Corresponding to section 34(1) of the Indian Income-tax Act, 1922] - Income escaping assessment - Issue of notice for - Whether it is incumbent upon ITO to place his signature on notice issued under section 34 of 1922 Act - Held, yes - Whether section 34 of 1922 Act is couched in a mandatory form in public interest, hence there cannot be any question of waiver in respect of a breach of a provision under section 34 of 1922 Act - Held, yes FACTS The ITO issued a notice under section 34 of the 1922 Act to the assessee on the ground that certain income had escaped assessment. On receipt of the said notice the assessee filed his return, and thereafter an assessment was made by the ITO upon the basis of the said notice. Thereafter, the assessee being dissatisfied with the order, took the matter to the AAC where, for the first time, the assessee took the point that the notice under section 34 of the 1922 Act was bad in law inasmuch as it did not bear the signature of the ITO, for a proper notice under section 34 was a condition precedent in the exercise of jurisdiction by the ITO. The AAC as well as the Tribunal rejected the case of the assessee. On reference : HELD As per S. Datta, J:- The words "has reason to believe" in section 34(1) of the 1922 Act suggest the requirement of a written notice, though, by itself, it is not decisive. The words "serve on the assessee" in section 34 indicates the necessity of a written notice. The paragraph after clause (b ) in section 34 incorporates by reference the requirements of a notice under section 22(2) of the 1922 Act. Section 22 of the 1922 Act provides, inter alia, "may serve a notice" and "not being less than thirty days as may be specified in the notice." This again lends support to the view that a notice under section 22 must be in writing. Therefore, section 34(1) of 1922 Act makes it incumbent upon the ITO to give a notice in writing. A notice under section 34 of the 1922 Act cannot be issued mechanically or as a matter of routine, for it seeks, inter alia, to disturb the assessment already made and finalised. Hence, it imposes upon the ITO to apply his mind to the matter before…

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