Per Shri R.N. Puri (Accountant Member) - The appeals filed by the assessee pertain to the assessment years 1971-72 to 1979-80. These appeals are directed against the orders dated 15-12-1986 of the CIT (Appeals) upholding the assessments of the assessee made by the Income-tax Officer under s. 147 of the IT Act, 1961, in respect of the above mentioned assessment years. The assessee is HUF in status.

2. In its appeals, the assessee has challenged the very legality of the assessments. It is contended that the assessments should be struck down as being invalid. It is stated that assumption of jurisdiction under s. 147 was not justified. It is also stated that the assessments made were bad in law on account of the fact that notices under s. 148 were invalid, having been issued after the expiry of the time limit prescribed for the issue of such notices. It was pointed out that the issue of a notice under s. 148 was a condition precedent to the validity of any assessment under s. 147 and if the notice issued under s. 148 was not valid, assessment was not legally sustainable. Another contention raised was that since the HUF had ceased to exist by the time the assessments came to be made, the assessments were bad in law, as law does not provide for making assessment on defunct HUF. It was stated that the HUF had disrupted on 8-5-1972. There is also dispute as to the applicability of the

provisions of s. 150(1) which lift the bar of limitation prescribed for the issue of notice under s. 148. The view of the department that, since the assessments are in consequence of or to give effect to the "finding" of the Hon’ble High Court of Karnataka in the case of Paramanand L. Bajaj v. CIT [1982] 135 ITR 673, the bar of limitation for issue of notice under s. 148 is lifted, is disputed.

3. Let the facts be stated. There had existed a HUF consisting of Paramanand L. Bajaj, his wife, three sons and two daughters. The three sons of Paramanand L. Bajaj are Devendra P. Bajaj, Vijay kumar P. Bajaj and Nandlal P. Bajaj. The assessment was being made on the HUF represented by its karta, Paramanand L. Bajaj. On 20-8-1956, Devendra P. Bajaj got separated from the family. Vijay kumar P. Bajaj got separated from the family on 22-12-1961. Nandlal P. Bajaj got separated from the family on 30-6-1963. Subsequently, it was claimed that there had taken place a re- union on 27-3-1971. The re-union was evidenced by an agreement signed by Paramanand L. Bajaj and his three sons on 27-3-1971. Clauses (1), (2) and (3) of the agreement read:

"Clause (1): The parties hereto do hereby affirm that they have reunited on 27th day of March, 1971, to form a Hindu Undivided family.

Clause (2): Any party to this agreement can throw either his self-acquired property or any property got by him on partition of the Hindu undivided family before this reunion into the said Hindu Undivided family.

Clause (3): The properties got by the parties to this agreement on partition prior to this reunion shall continue to be their respective separate properties unless thrown into the common hotchpot of the Hindu undivided family which has come into existence by virtue of this agreement."

On 30-3-1971, Paramanand L. Bajaj threw only the immovable properties of the smaller HUF consisting of himself, his wife and an unmarried daughter into the common hotchpot of the re-united family. As far as the movables were concerned, they were not brought by him to the fold of the reunited family. Devendra P. Bajaj, Vijay kumar P. Bajaj and Nandlal P. Bajaj, however, did not bring any of the properties which they had got on partition and which were still in their possession on the date of the agreement of the re-union, to the hotchpot of the re-united family.

4. The re-united family (the assessee) did not file any return for the assessment year 1971-72. This was presumably on account of the fact that the re-union had taken place on 27-3-1971, i.e., only a few days prior to the close of the previous year (the pr