1963-VIL-41-CAL-DT

Equivalent Citation: [1965] 55 ITR 406 (Cal)

CALCUTTA HIGH COURT

IT REFERENCE NO. 20 OF 1960

Dated: 01.08.1963

SEWLAL DAGA

Vs

COMMISSIONER OF INCOME-TAX

For the Petitioner: S. Ray and Sohan L. Saraf

For the Respondent: B.L. Pal and Dr. D. Pal

Bench

S.P. MITRA AND K.C. SEN, JJ.

JUDGMENT

Shankar Prasad Mitra, J.-

This is a reference under section 66(1) of the Indian Income-tax Act, 1922. The assessment year is 1946-1947. The assessment was reopened under section 34. The original assessment was on Chandrabhan Johurmull in the status of an individual. He died in May, 1949. On the security of a fixed deposit of ₹ 25,000 standing in the name of one Luchminarain Maheswari, the assessee, Chandrabhan Johurmull, had obtained overdraft facilities.

A notice under section 34 was issued to Sewlal Daga, the assessee's son. In the notice, the assessee was described as "Messrs. Chandrabhan Johurmull (karta Sewlal Daga)." The notice did not state that it was being issued to Sewlal Daga as the legal representative of Chandrabhan Johurmull, deceased. On behalf of Sewlal Daga, it was contended before the income-tax authorities that the notice under section 34 was not served on him as the legal representative of the deceased, and, as such, it was illegal.

The Appellate Tribunal found that the assessee, in compliance with the notice, filed a return showing his status as "Chandrabhan Johurmull, deceased, represented by Sewlal Daga." According to the Tribunal, the assessee correctly understood the purpose for which the notice under section 34 was issued to him, and, in compliance with the notice, filed a return by showing himself to be the legal representative of his father. The Tribunal was of opinion that this was a case of waiver of the defect in the notice. It has taken note of the decision of the Bombay High Court in Commissioner of Income-tax v. Ramsukh Motilal [1955] 27 ITR 54 as also that of the court in Tarak Nath Bagchi v. Commissioner of Income-tax [1946] 14 ITR 319 . It has followed the decision of this court, and stated that the irregularities in a notice issued under section 34 could be waived by a party. The waiver in this case is evident by the filing of a return according to law without any protest in respect of the income concerned.

The following question of law has been referred to us for our opinion :

"Whether the notice under section 34 was issued according to law and whether the assessment had been properly made in pursuance of the said notice under section 34 of the Indian Income-tax Act ?"

The order of the Tribunal was passed, when there was a difference of opinion between the Bombay High Court and this court, and the Tribunal was bound to follow the decision of this court. But the controversy has now been set at rest by the observations of the Supreme Court in Y. Narayana Chetty v. Income-tax Officer, Nellore [1959] 35 ITR 388 ; [1959] Supp. 1 SCR 189. At page 392, Gajendra-gadkar J. states as follows :

"The argument is that the service of the requisite notice on the assessee is a condition precedent to the validity of any reassessment made under section 34 ; and if a valid notice is not issued as required, the proceedings taken by the Income-tax Officer in pursuance of an invalid notice and consequent orders of reassessment passed by him would be void and inoperative. In our opinion, this contention is well founded. The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid, then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void."

In view of these clear observations by the Supreme Court, I do not think there is any scope for any further argument in this matter. The notice which was issued and served in the instant case was obviously invalid and the proceedings before the Income-tax Officer were, consequently, illegal and void. The service of notice on the assessee was a condition precedent to the assumption of jurisdiction by the Income-tax Officer under section 34. No consent can confer jurisdiction upon a court if the court has no jurisdiction. The failure to give the requisite notice deprives the Income-tax Officer of his jurisdiction to assess under section 34.

The answer to the question framed is, therefore, in the negative.

The respondent will pay to the applicant the costs of this reference. Certified for counsel.

Sen J.-I agree.