Bhaskaran, C.J. - On receipt of Annexures A-1, A-2 and A-3 assessment orders dt. 31-10-1977 respectively for the asst. yr. 1974-75, 1975-76 and 1976-77, the petitioner filed his objections in which he never raised a question as to whether the notice was bad for not having sent separate notices to him, one in his capacity as the manager of the HUF properties, and the order as the trustee of the trust properties. He filed the return pursuant to the notice disclosing only the income from the properties held by him in his capacity as the manager of the HUF properties, concealing the income derived by him in his capacity as the trustee of the trust properties. The main contention before the Agrl. ITO was that he was entitled to exemption under s. 4(3) of the Agricultural Income-tax Act, 1950 (hereinafter referred to as the Act). The Agrl. ITO who inspected the property issued a reassessment notice and completed the assessment without accepting his contention. In appeal and second appeal the assessee had lost. The Appellate Tribunal confirmed the assessment made by the Agrl. ITO, separately assessing the income from the agricultural properties held by the assessee : (1) in his capacity as the manager of the HUF properties; and (2) as the trustee of the trust properties. The questions referred to this Court under s. (60) (3) of the Act read as follows :
'(1) Whether, on the facts and in the circumstances of the case, the assessments for the year 1974-75, 1975-76 and 1976-77 have been validly initiated under s. 35 of the Agrl. IT Act ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the trust is a private religious trust and is hit by cl. (a) of sub-s. (3) of s. 4 of the Agrl. IT Act ?'
2. We may at once dispose of the second question inasmuch as on the very face of it the contention of the assessee cannot be sustained. Sec. 4(3) (a) of the Act reads -
'4. Total agricultural income. -
(3) Nothing contained in cl. (b) or cl. (c) of sub-s. (1) shall operate so as to exclude from the total agricultural income of the previous year of the person in receipt thereof -
(a) any part of the agricultural income from the property held under trust for private religious purposes which does not enure for the benefit of the public.'
There is absolutely no contention much less evidence, to show that the properties held under trust would enure to the benefit of the public. Therefore, the second question has to be answered in the affirmative, i.e. in favour of the revenue and against the assessee and we do so.
3. As far as the first question is concerned, there is no dispute that a notice under s. 35 was received by the assessee who did not file any return for the respective years. There is also no dispute that he had been holding a large extent of agricultural lands. He was by the notice, required to submit a return, inasmuch as in this case the income escaped was not discovered. On information of the assessing authority, but on the fact that the assessee had not filed any return at all (sic). So what he was required at all was to file a return of the income derived by him from his agricultural properties. No doubt, he could have shown separately the income derived by him in his different capacities, one as the manager of the HUF properties and the other as the trustee of the trust properties. What he did was, to furnish the income with respect to the properties belonging to the HUF without disclosing either he had other properties or that he was holding land in any other capacity. The Agrl. ITO had been very careful in dealing with the assessee inasmuch as, instead of clubbing together the entire income, what he did was to assess him separately for the income derived from the HUF properties and the income derived from the trust properties.
We are not convinced that the proceedings were initiated invalidly for the reason that two separate notices had not been issued to the assessee calling upon him to file separate returns for the HUF properties on the one hand, and the trust properties on the other. The assessee who did not care to file the return was alerted by annexures A-1 to A-3 to file the returns, and it was without disclosing that he was holding other properties also that he filed the return with respect to HUF properties. The counsel for the assessee has sought to rely on the decisions reported in CIT v. K. Adinarayana Murty : 65ITR607(SC) and CIT v. Saraswati Bai (Smt.) . These are cases which could be distinguished on facts. On the other hand, we find authority for the proposition that merely for the reason that there was defect in the notice issued, the assessment was not liable to be quashed. - Mahabir Prasad Poddar v. ITO : 102ITR478(Cal) . We also find support for this view taken in Mohd. Haneef v. CIT : 27ITR447(All) and Balchand v. ITO : 72ITR197(SC) .
For the foregoing reasons, we answer question No. 1 also in the affirmative, i.e. in favour of the Revenue and against the assessee.