A notice under Section 148 of the Income Tax Act, 1961, must be clear and specific, and it should be addressed to the person in the capacity in which the notice is being served. The ITO must have materials to form the belief that there has been escapement of income and that such escapement of income was due to omission or failure on the part of the assessee.

SABYASACHI MUKHARJI, J.

( 1 ) THIS is an application challenging a notice under Section 148 of the I. T. Act, 1961. The notice appears at page 47, annex. "g". The notice was addressed to Messrs. Surajmal Behadurmull, I, Convent Road, Calcutta. The notice was in respect of the assessment year 1957-58. In the said assessment year, there were two HUFs by the said name for the two periods--one was for the period from November 14, 1955 to December 31, 1955, and the other was for the period from January 1, 1956 to November 2, 1956. During that period it is also said that there was disruption of the smaller HUF which formed into a partnership firm. That position, however, had not been accepted by the Tribunal. The notice having been issued, the partnership firm made an application challenging the notice. The income-tax department made a statement before T. K. Basu J. that the said notice was not intended to be used against the partnership firm. Two points were urged in support of this application; one was that the notice was vague and, as such, invalid. Secondly, it was contended that the ITO did not have materials to form any belief and he did not in fact form any belief. It was contended that from the notice it was not clear whether the notice was intended for the bigger HUF or the smaller HUF or partnership firm. The notice was not addressed to any person in any particular capacity. Reliance was placed on the Division Bench decision of this court in the case of Sewlal Daga v. CIT [1965] 55 ITR 406 (Cal ). Reliance was also placed on the unreported judgment of mine in Matter No. 542 of 1968, Shyam Sundar Bajaj v. ITO (It has been held by the Supreme Court that the service of the notice under Section 148 is a condition precedent for the initiation of the proceedings. It is, therefore, vital that a valid notice should be served. In the instant case, it does not appear in what capacity the notice was served nor is it clear from the notice itself whether the notice was being served on the bigger HUF or the smaller HUF. At that time, admittedly, during the relevant assessment year there were two HUFs and two assessment orders had been passed. It is not clear from the notice whose income was alleged to have escaped assessment. Reliance was also placed for this proposition on the decision of the Supreme Court in the case of CIT v. Kurban Hussain Ibrahimji Mithiborwala. Counsel for the respondent contended that the petitioner was in no way misled by the aforesaid notice. I am of the opinion that that is not a valid consideration. The question is not whether the petitioner was misled or not. The question is whether the notice was vague or not. The fact that the respondents had to make a statement before T. K. Basu J. to clarify the position that the notice was not intended to be used against the partnership firm indicated, in my opinion, that it was capable of being so construed and that itself is sufficient ground for holding that the notice was vague. Quite apart from that it is not clear, as mentioned hereinbefore, whether the notice was intended for the smaller HUF or the bigger HUF. On this ground, the notice is liable to be quashed.

( 2 ) IT was next contended that there were no materials before the ITO to form the belief and he did not in fact form any belief. Pursuant to the directions of this court one Sunil Kumar Banerjee affirmed an affidavit on behalf of the respondents wherein he has stated the reasons for reopening of the assessment. The reasons stated were that the petitioner had certain loan transactions with one Messrs. Srikishendas Ghanshyamdas who was a name-lender. The basis of the knowledge of the ITO that Srikishendas Ghanshyamdas was merely a name-lender and did not lend money has not been stated. It has not been further stated what enquiries, if any, were made to form the belief. It is not clear also from the materials that the ITO did form actually any belief that there was omission or failure on the part of the a

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