Judgment of Division Bench

R.N Pyne, J.:— In this appeal, which is directed against a judgment and order of T.K Basu J. dated Sept. 5, 1972 (see p. 343 supra), we are concerned with the question of the validity of a notice dated 18th March, 1965, given under s. 148 of the I.T Act (hereinafter referred to as “the Act”) seeking to reopen the assessment of the respondent's firm for the assessment year 1948–49. The said notice was addressed by the appel-lant-ITO to “Messrs. Bhimraj Banshidhar of 180, Mahatma Gandhi Road, Calcutta.”

2. The respondent in an application made under art. 226 of the Constitution challenged the said notice on the ground, inter alia, that being vague the said notice was invalid. This contention was accepted by the court of first instance. Therefore, the only point that fell for consideration in the said application before the court of first instance and which also arises in the instant appeal is whether the said notice is vitiated due to any vagueness in the notice. To appreciate this point it is necessary to refer to certain relevant facts and they are briefly stated hereinafter.

3. The respondent was a member of an HUF and he carried on a joint family business under the name and style of “Bhimraj Banshidhar” at 180, Mahatma Gandhi Road, Calcutta. In July, 1947, there was a partial partition in the said joint family whereby the business of the family and the assets and liabilities pertaining to those businesses were partitioned among its members, namely, (1) Nagarmal Modi; (2) Chandi Prasad Modi; (3) Shankarlal Modi; (4) Ram Swarup Modi and (5) Jagmohan Modi. In the same month, the said members of the joint family formed a partnership under the name and style of “Messrs. Bhimraj Banshidhar” and carried on business at the same premises, namely, 180, Mahatma Gandhi Road, Calcutta. The fact of the partial partition and the constitution of the firm were accepted by the income-tax department and at all material times the same ITO continued to assess both the entities, namely, the HUF after partial partition and the partnership business which was a registered one. In July, 1956, the said firm was dissolved by mutual consent of the partners of the said firm. On and from July 11, 1956, two new partnership firms were constituted under two separate deeds of partnership both dated 11th July, 1956, as follows:

(a) “Messrs. Bhimraj Banshidhar” having its registered office and place of business at 2nd floor, 180, Mahatma Gandhi Road, Calcutta-7, consisting of Chandi Prasad Modi and Jagmohan Modi as partners;

(b) “Messrs. Bhimraj Nagarmal” having its head office and place of business on 2nd floor, 180, Mahatma Gandhi Road, Calcutta-7, consisting of Shankarlal Modi and Ram Swarup Modi as parners.

4. The said firm “Messrs. Bhimraj Banshidhar” was dissolved on June 26, 1968. By the deed of dissolution the appellant acquired absolute right, title and interest in the business, name, goodwill and assets and liabilities of the said firm of Messrs. Bhimraj Banshidhar and since then he has been carrying on business at 2nd floor of 180, Mahatma Gandhi Road, Calcutta-7, under the name and style of Messrs. Bhimraj Banshidhar as the sole proprietor thereof.

5. On or about March 23, 1965, the impugned notice dated March 18, 1965, issued by the said ITO under s. 148 of the Act for the assessment year 1948–49 was received in the said office at 2nd floor of the aforesaid premises. It is stated by the respondent that the said notice was addressed as follows:

Messrs. Bhimraj Banshidhar,

180, Mahatma Gandhi Road,

Calcutta.”

6. The respondent challenged the validity of the said notice in this hon'ble court in an application under art. 226 of the Constitution and by his judgment and order dated September 5, 1972 (see p. 343 supra), T.K Basu J. allowed the said application and struck down the said notice. The instant appeal is against the said judgment and order.

7. The learned judge of the court of first instance accepted the contention of the respondent (who was the petitioner in that court) that the said notice being vague was bad and invalid. The learned judge observed that both the entities, meaning thereby the HUF business of “Messrs. Bhimraj Banshidhar” as also the partnership carried on under the name and style of “Messrs. Bhimraj Banshidhar”, were not only known to the income-tax department at the material time but were being assessed by the same ITO and this fact was not specifically denied in the affidavit-in-opposition of Paresh Nath Ghose affirmed on 19th September, 1970, and filed on behalf of the department in the court of first instance. It was contended on behalf of the department before the learned judge of the court of first instance that the said notice was served by registered post and the acknowledgment slip contained the file number of the HUF. According to his Lordship, as, on the affidavit, it was not the admitted position, he could not rest his finding on that. Considering the facts and circumstances of the case and relying on an unreported judgment of Sabya-sachi Mukharji J. in the case of Madanlal Chowdhury v. ITO (Matter No. 495 of 1969) (since reported in [1979] 119 ITR 351 (infra)), his Lordship held that the impugned notice in the instant case was vague and not a valid one and, therefore, incapable of being given effect to. His Lordship, therefore, allowed the respondent's application and struck down the said notice.

8. Mainly same contentions, as were urged before the court of first instance, were urged on behalf of the parties before us in this appeal.

9. Counsel for the appellant, i.e, the revenue, contended that, in the facts and circumstances of this case, it cannot be said that the notice under s. 148 was vague. It has been contended that whether a notice is vague or not has to be decided by the fact whether the assessee is misled by such notice. It is the understanding of the assessee that has to be seen. It is submitted that the acknowledgment slip of the registered post by which the said notice was sent clearly showed the income-tax file number of the HUF. It was further submitted that as the partnership firm of “M/s. Bhimraj Banshidhar” was dissolved in the year 1947 and the said notice was given for reopening of the assessment for the assessment year 1948–49, it was clear that the impugned notice was for the HUF. Referring to para. 6 to the affidavit of Kanhaiyalal Sharma affirmed on the 2nd September, 1972, counsel submitted that Sharma had authority to receive notices on behalf of the HUF as also the partnership firm and in the instant case the notice was received and accepted by him and, in the facts and circumstances of this case, it was quite clear to the person receiving the notice that the same was intended for the HUF. It was also the contention of the counsel that non-mentioning of the status of the assessee would not vitiate the notice. In support of his above contentions counsel has relied on the various cases, to wit, In re Radhey Lal Balmukand, [1942] 10 ITR 131 (All), Mahabir Prasad Poddar v. ITO, [1976] 102 ITR 478 (Cal), Ealchand v. ITO, [1969] 72 ITR 197 (SC), CIT v. Aiinarayana Murthy, [1967] 65 ITR 607 (SC), Chooharmal Wadhuram v. CIT, [1968] 69 ITR 88 (Guj), Shewaram D. Bhatia v. Commissioner Of Income-Tax, Bombay City Ii., [1971] 82 ITR 638 (Bom), CIT v. Kurban Hussain, [1971] 82 ITR 821 (SC), CIT v. Swaminathan Chettiar, [1947] 15 ITR 430 (Mad), Mohd. Haneef v. Commissioner Of Income-Tax, [1955] 27 ITR 447 (All) and CIT v. Sudhir Kumar Laha, AIR 1965 Cal 476.

10. Counsel for the respondent contended that the said notice was vague because at the relevant time, i.e, when the notice was given there were two separate and distinct entities, a HUF business and a registered partnership business, both having the same name of “Bhimraj Banshidhar” and had the same business address, namely, 180, Mahatma Gandhi Road, Calcutta. It is stated that neither was it mentioned in the said notice as to whom it was addressed nor was there any mention of any income-tax file number in the notice to indicate as to whom it was directed. Therefore, it was not clear to whom the said notice was directed and as such the same was vague and invalid.

11. Counsel for the respondent has further submitted that a notice under s. 148 of the Act is unlike any other notice under the Act, namely, notice under s. 142(1) or s. 139(1) or (2) or s. 143(2) of the Act. It has also been submitted that the notice under s. 148 is the foundation of the jurisdiction which is to be assumed by the ITO for reopening of the assessment. Therefore, if the notice itself is invalid for any reason or the service of the notice is not in accordance with law, the jurisdiction pursuant to that notice cannot be validly assumed. According to counsel, in such cases, even the assessee's waiver of the defects in the notice would not confer any jurisdiction upon the ITO. It is also the submission of the counsel that the question in the instant case is not whether the assessee is prejudiced or misled by such an invalid notice but the real question is whether jurisdiction can be validly assumed pursuant to a notice which is in any way vague or suffers from any’ infirmity under the law. It is further submitted by the counsel that as the notice under s. 148 confers jurisdiction upon the ITO and it is the foundation of the proceedings sought to be initiated by the ITO any mistake in respect of any material position the notice would invalidate the same. According to counsel, the assesse position in the instant case is that neither the status of the assesse any file number or other fact is stated in the notice. There was noth. to indicate whether the said notice was intended for the HUF or partnership, both of whom at the relevant time carried on business under the name and style of “Bhimraj Banshidhar” at the same place, i.e, 180 Mahatma Gandhi Road, and were separately assessed and all these facts were known to the ITO. Therefore, according to counsel, no jurisdiction could be lawfully assumed pursuant to such an invalid notice. In support of his above contention counsel has referred to the cases of Kurbanhussein Ibrahimji Mithiborwala v. CIT, [1968] 68 ITR 407 (Guj), Shyam Sundar Bajaj v. ITO, [1973] 89 ITR 317 (Cal), Sewlal Daga v. CIT, [1965] 55 ITR 406 (Cal) Rama Devi Agarwalla v. CIT, [1979] 117 ITR 256 (Cal) and Bhagwan Devi Saraogi v. ITO, [1979] 118 ITR 906 (Cal).

12. Strong reliance was placed on behalf of the appellant on Mahabir Prasad Poddar's case, [1976] 102 ITR 478 (Cal). But, in our view, counsel for the respondent has rightly submitted that the case is distinguishable on facts from the instant case because in that case the notice was not challenged but only the assessment was challenged. Further, there was no determination of status of the assessee in that case. According to respondent's counsel, there are observations in that case which would, on the contrary, support the contention of his client in this appeal. It would appear from page 483 of the report that one of the questions that fell for determination in that case was whether, in the facts and circumstances of that case, the reassessment was without jurisdiction. On the question of the validity of the reassessment in that case it was observed thus (p. 485):

“The next question is whether the impugned assessment on the Hindu undivided family was wholly without jurisdiction. Counsel for the appellant contended before us that this was a reassessment and could have only been made after proper notices had been given of the reopening on the assessee. This proposition is undisputed. Counsel for the appellant further contended that before the assessment was reopened there should be an assumption of jurisdiction by the Income-tax Officer by service of proper and valid notice on the assessee. This proposition cannot, in our opinion, also be disputed. The question is, however, whether in the facts and in the circumstances of the case such notice can be deemed to have been given. On this aspect, it is important to remember that this was the first assessment only in the sense that there was no prior assessment of Mahabir Prasad either as an individual or as member or karta of any Hindu undivided family.”

13. In our view, as most of the cases cited at the Bar on behalf of the parties are distinguishable because of the peculiar facts of those cases, it is not necessary to deal with those cases, in any detail. It is well settled that the ITO's jurisdiction to reopen an assessment under s. 147 (s. 34 of the 1922 Act) would depend upon the issuance of a valid notice. If the notice issued by him is invalid for any reason then the entire proceedings that would be taken by him pursuant to such notice would be void for want of jurisdiction. The service of a valid notice is a condition precedent to the jurisdiction of the ITO to take further proceedings under s. 147 of the 1961 Act or s. 34 of the 1922 Act. See CIT v. Kurban Hussain Ibrahimji Mithiborwala, [1971] 82 ITR 821 (SC) and B.K Gooyee v. Commissioner Of Income-Tax, [1966] 62 ITR 109 (Cal).

14. In the case of Sewlal Daga v. CIT, [1965] 55 ITR 406 (Cal), which was relied upon by the court of first instance, it was held that the reassessment on the legal heirs and representatives of the deceased-assessee on the notice being served on a person as karta of the HUF was invalid. In the facts and circumstances of this case it has to be seen whether the notice under s. 148 of the Act suffers from any defect which makes it invalid. According to the court of first instance vagueness in the notice has vitiated the same. In our view, the above finding of the court of first instance is a correct finding. At the relevant time there were two concerns of the same name and at the same address. The ITO had full knowledge of the separate identity of the two concerns but in spite thereof there was neither anything in the notice nor otherwise to show to which of the two concerns, either the partnership firm or the HUF, the said notice was directed. The concerned ITO admittedly was aware of the separate entities of the two concerns. In our view, the fact of the mentioning of the file number of the HUF in the acknowledgment slip of the registered post by which the notice was sent cannot also be relied upon for deciding the case because that, as correctly pointed out by the learned judge of the court of the first instance, was not the admitted position on affidavits in this case. In a writ application, no finding should be arrived at on any disputed question of fact. As stated earlier, there was nothing to show whether the impugned notice was for the partnership or the HUF. In the facts and circumstances of this case, we are of the view that the impugned notice is vague. We are entirely in agreement with the decision of the learned judge of the court of first instance as also with his reasonings for his findings recorded in the judgment appealed against. This appeal, in our view, should fail. This appeal is, therefore, dismissed but there shall be no order as to costs.

Ghose, J.:— I agree.