assessee is in appeal before us against order dated 15-12-2004 of ld. CIT(A), Panchkula for assessment year 1996-97 on following grounds:- 1. That appellant denies his liability to be assessed in status of HUF granted and denies liability to be assessed at total income of Rs. 1,65,100 and accordingly denies his liability to pay tax, interest demanded thereon and ld. CIT(A) has erred in holding appellant liable to be assessed at income of Rs. 1,65,100. 2. That having regarding to facts and circumstances of ld. CIT(A) has erred in law and on facts in confirming action of Assessing Officer in framing impugned assessment upon appellant even though nothing was chargeable to tax upon him. 3. That having regard to facts and circumstances of ld. CIT(A) has erred to confirming action of Assessing Officer in framing impugned assessment under section 147 more so when statutory conditions prescribed were not complied with. 4. In any view of matter in any case, framing of impugned assessment under section 147 was bad in law and against facts of case. 5. That having regards to facts and circumstances of case, ld. CIT(A) has erred in law and on facts and confirming action of Assessing Officer in framing impugned assessment without serving notice and without giving opportunity. 6. That having regards to facts and circumstances of case, ld. CIT(A) has erred in law and on facts in confirming action of Assessing Officer not allowing deduction on account of section 54B. 7. In any view of matter and in any case, disallowance of investments made on purchase of agricultural land amounting to Rs. 6,00,000 was bad in law and against facts and circumstances. 8. That having regards to facts and circumstances of case, ld. CIT(A) has erred in law to confirm order of Assessing Officer and framing assessment in status of HUF and notice was issued under section 147/148 in status of individual. 9. That having regards to facts and circumstances of case, ld. CIT(A) has erred in law and on acts in upholding action of Assessing Officer in charging interest under sections 234A and 234B.' 2.The decision in this appeal basically depend upon two issues: 1. Liability to be assessed in status of HUF and not as individual whereas return was filed as individual. 2. Action of ld. CIT(A) in confirming order of Assessing Officer in status of HUF when notice was issued under section 147/148 in status of individual. 3.Before ld. CIT(A) it was submitted by assessee that assessment in this case was completed under section 143(3) of Act on income of Rs. 1,65,100 vide order dated 28-2-2002. assessment was made in status of HUF whereas notice was received under section 148 in name of Suraj Mal (Individual). If assessment was to be made in capacity of HUF, ld. Assessing Officer should have issued notice under section 148 to assessee in capacity of HUF. 4. Ld. CIT(A) called for report from Assessing Officer on above submission of assessee. ITO, Gurgaon vide his letter dated 26-7-2004 submitted his comments as under: ' main grounds of appeal, taken by assessee are as under:- (i) That assessment has made in status of HUF whereas notice was issued in name of Shri Suraj Mal (Ind.). (ii) Requested for rebate under section 54B. (iii) counter comments are as under:- notice under section 148 dated 22-12-2000 was issued to assessee for assessment year 1996-97 as he had sold agricultural lands situated at VPO Ishlampur, Gurgaon to some private builders. In compliance to notice under section 142(1) Shri R.P. Gupta, Advocate attended proceedings and filed return of income for assessment year 1996-97 on 2-4-2002 stating nil income and agricultural income of Rs. 40,000. Only during course of hearing Shri R.P. Gupta, Advocate and assessee submitted affidavit stating that he h d sold his ancestral agricultural land in VPO Ishlampur, Gurgaon for consideration of Rs. 9,59,540. Though assessee filed his return of income in status of individual but as per note sheet entry dated 22-2-2002 he was asked: You have claimed status of assessee as individual, whereas land sold were ancestral. Why status of HUF should not be taken. If HUF status is taken rebate under section 54B is not allowable. Shri R.P. Gupta, Advocate along with Shri Suraj Mal assessee attended on 28-2-2002 stated as under: Shri R.P. Gupta along with Shri Suraj Mal appeared. Written submissions filed. He has stated that status of assessee should be taken as HUF as land were ancestral. He agreed that rebate under section 54B is not allowable to HUF. In view of above, status of assessee was held as HUF and keeping in view Hon'ble Madras High Court judgment in case of CIT v. Devarajalu [1991] 191 ITR 211 (Mad.) rebate under section 54B was not allowed. In addition to above, land stated to have been purchased by assessee not in his own name, but in name of his sons. Accordingly rebate under section 54B is not allowable. It is further submitted that status of brother of assessee Shri Bharat Singh S/o Shri Shera, VPO Ishlampur, Gurgaon was assessed as HUF and in similar circumstances and appeal filed by assessee's brother was dismissed by ld. CIT(A), Faridabad vide his order dated 25-8-2003 in appeal No. 38/2002-03 [copy of order of ld. CIT(A), Faridabad, in case of Shri Bharat Singh S/o Shri Shera is placed on record]. decision in Bharat Singh is squarely applicable in this case. Since assessment has correctly been made in status of HUF, to which assessee agreed. appeal filed by assessee deserves to be dismissed.' 5. In reply, assessee's representative vide letter dated 6-12-2004 denied that assessee consented to status of HUF. It was requested that assessment may be framed in status of individual and if assessment has to be made in status of HUF, fresh notice be issued. 6. In his order dated 15-12-2004, ld. CIT(A) noted that there is no specific ground regarding notice having been issued in name of individual and assessment having been made in status of HUF but only issue is regarding disallowance of deductions under section 54B of Act. However, in his submissions, assessee raised issue that assessment was bad in law as notice was issued in status of individual whereas assessment was made in status of HUF. 7. Ld. CIT(A) while dealing with this issue has considered submissions of assessee and also reply of Assessing Officer. He has observed that at time of initiation of proceedings under section 148 of Act, it is not incumbent on Assessing Officer to be aware of all facts of case. What law requires from him is that at stage of initiation of proceedings under section 148, there is prima facie belief that income had escaped assessment. After considering decisions in Praful Chuni Lal Patel v. M.J. Makwana, Asstt. CIT [1999] 236 ITR 832 (Guj.), ITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 597 (SC), ITO v. Biju Patnaik [1991] 188 ITR 247 (SC) and Calcutta Discount Co. (P.) Ltd. v. ITO [1961] 41 ITR 191 (SC) and looking to facts of case ld. CIT(A) held as under:- 'In this case, there was information that land belonging to one Shri Suraj Mal had been sold and that income from capital gains in respect of this land has escaped assessment. assessee filed return and indeed showed income under head 'Capital gains' but declared its status as that of individual. At this stage while filing return or while filing challan assessee claimed status of individual. But, however, it was only during assessment proceedings that it came to knowledge of Assessing Officer that land was ancestral land and it was only after division of ancestral land that assessee had sold his share. And these facts are so special to present case that cases relied upon by counsel do not apply to facts of this case. At time of initiation of proceedings under section 148 it is not mandate of law that Assessing Officer should also have been aware of status in which he should be assessed. reasons clearly show that Assessing Officer was aware of income escaping assessment under head 'Capital gains' for lands belonging to one Shri Suraj Mal without mentioning status. action of Assessing Officer was well within parameters of law. It is also fact which is not being rebutted by counsel that assessee's brother Shri Bharat Singh s/o Shri Shera has filed his return of income in status of HUF as for sale of same ancestral land which were also sold by appellant in respect of land falling in his share. fact that both brothers had claimed status of HUF at time of issue of ITCC has also not been rebutted or refuted.' 8. Ld. CIT(A) further observed that assessee who had accepted agreed order, cannot be allowed to turn around and urge that such order was incorrect or unwarranted. In support ld. CIT(A) has placed reliance on decisions of Punjab & Haryana High Court in case of Kanshi Ram Wadhwa v. CIT [1982] 138 ITR 830 where court had observed as under:- '. . . It is matter of common knowledge that at time of final arguments assessee sometimes prefer to have agreed order passed by ITO and orders passed is sometimes not strictly in accordance with return.' '. . . Had assessee not consented to have agreed order of assessment, ITO would have perhaps held enquiry for determining his actual income for that year. assessee having derived benefit of agreed order cannot be allowed to turn round and urge that such order was incorrect or unwarranted.' 9. Ld. CIT(A), therefore, held that Assessing Officer was fully justified in holding status of assessee as that of HUF as against claim of status of individual. 10. Relying on decisions in CIT v. G.K. Devarajulu [1991] 191 ITR 211 (Mad.), 195 ITR 483 (Mad.) (sic) and Pravin Chand Mohin Kumar v. CIT [1994] 2 0 8 ITR 11 (Raj.), Ld. CIT(A) also held that assessee is not entitled to deduction under section 54B when status is that of HUF. 11. Before us, ld. counsel for assessee not only disputed orders of lower authorities, he also challenged that there was no valid notice to assessee and, hence, proceedings are void ab initio. It was submitted that notice dated 12-12-2000 at page 54 of paper book was in name of individual and property referred to therein does not belong to assessee. Even notice dated 29-11-2000 at page 56 of paper book was also issued to individual. Return dated 25-2-2002 at page 51 of paper book was also filed as individual. Therefore, assessment could not have been made in capacity of HUF. No notice was ever served in capacity of HUF. It was further submitted that ITAT has dealt with other cases relating to similar properties in respect of other assessee and assessment has been made in individual capacity. Our attention was drawn to order of ITAT/CIT(A)/Assessing Officer at pages 60-77 of paper book. 12. Ld. DR justified action of lower authorities submitting that notice under section 148 was validly issued. reasons were duly recorded as is evident from page 58 of paper book. With regard to specific query from Bench whether any notice was issued in name of HUF, ld. DR replied in negative but submitted that assessee had consented to assessment in status of HUF and, therefore, action of Assessing Officer is justified. In support, ld. DR placed reliance on decision in Munilal Shivnarain Kothari v. CIT [1984] 149 ITR 567 (Raj.). It was further submitted that even if there was any procedural defect, authorities are competent to rectify same. In support, ld. DR relied on decisions in Remfry & Sons v. CIT [2005] 276 ITR 1 (Delhi) and CIT v. Durga Prasad More [1969] 72 ITR 807 (SC). Ld. DR further submitted that order passed by ld. CIT(A) is well-reasoned. In assessee's brother's case also authorities have decided case on similar line which has acquired finality, and, hence, other cases cited by assessee are not relevant. 13. We have considered rival submissions and also perused documents on record. There is no denial of fact that notices were issued to individual and not to HUF. whole case depends on issue whether statement made by assessee before Assessing Officer that status of assessee should be taken as HUF as lands in question were ancestral can be acted upon or not. In this regard following minutes as recorded in order sheet, copy of which is available at pages 29 and 31 of paper book, are relevant: 'Shri R.P. Gupta, advocate appearing along with Shri Suraj Mal. Return of income declaring nil income filed and has shown agricultural income at Rs. 40,000. Written reply filed. You have claimed cost price as on 1-4-1981 at rate of Rs. 2.50 lakhs per acre. However, Addl. CIT, Faridabad in another case adopted rate at Rs. 2,00,000 per acre. Please explain why it should not be taken at Rs. 2 lakhs per acre. You have claimed status of assessee as individual whereas land sold were ancestral, why status of HUF should not be taken, if HUF status is taken than rebate under section 54B is not allowable. As regards construction of house, you are required to explain cost of constructions. Case adjourned to 28-2-2002. Shri R.P. Gupta, advocate along with Shri Suraj Mal appeared. Written submission filed. He has stated that status of assessee should be taken as HUF as lands were ancestral. As regards cost of land on 1-4-1981 he has no objection for taking it at Rs. 2,00,000 per acre as taken in other case of Shri Subh Ram, Vill. Ishlampur (Assessed by Addl. CIT, Spl. Range, Faridabad). He argues that rebate under section 54B is not allowable to HUF. For construction cost he has filed valuation report which at Rs. 3,54,000 + Rs. 3,38,000 = Rs. 6,92,000. But assessee claimed rebate in rebate under section 54B at Rs. 6,00,000. No bank interest or any other income admitted. Agricultural income has been shown at Rs. 40,000.' 14. It will be seen that assessee had consented to be assessed in status of HUF although notice was issued to assessee in capacity of individual. Had assessee not consented to assessment in status of HUF, Assessing Officer might have examined issue whether assessment has to be done in status of individual or in status of HUF. In such case, he might as well have issued notice to assessee in status of HUF. Having consented to assessment in status of HUF now assessee cannot be allowed to turn round and argue that such order was incorrect or unwarranted. Assessing Officer had first asked assessee on 22-2-2002 as to why assessment should not be made in status of HUF and then only on 28-2-2002, on his consent and that too in presence of his counsel Assessing Officer decided to proceed in assessment proceedings. 15. Ld. CIT(A) has rightly relied on decision in case of Kanshi Ram Wadhwa (supra) in this regard. Further where person has, by his declaration act or omission permitted another believe thing to be true and to act upon such belief, neither he nor his representative shall be allowed to deny its truth. Estoppel is rule of evidence and section 115 of Evidence Act recognizes this rule. basis of estoppel is that it would be unfair or unjust to allow party to depart from particular state of affair which another has taken to be correct. 16. None of cases copies of which have been placed in paper book at pages 60-77, are of any assistance to assessee as issue in question has not been discussed in those cases. Additionally, it is not disputed by assessee that under similar circumstances and in respect of same property brother of assessee, Shri Bharat Singh was also assessed in status of HUF and decision in his case is squarely applicable in case of assessee. 17. Looking at totality of facts and circumstances of case, we are of considered view that there is no infirmity or illegality in order passed by lower authorities. 18. We are, therefore, not inclined to interfere with order passed by ld. CIT(A). 19. In result, appeal filed by assessee is dismissed. Per P.K. Bansal, Accountant Member. - I have gone through proposed order of my learned brother, but I could not be able to agree with said proposed order of my learned brother both with regard to reasoning and conclusion arrived at. I, therefore, proposed to write my separate order along with reasoning. 2. brief facts of case are that Shri Suraj Mal and his brother Bharat Singh inherited agricultural land in Vill. Ishlampur, Distt. Gurgaon on death of their father intestate. As per assessment order, assessment proceedings in this case was initiated on 22-12-2000 by issue of notice under section 148 of Income-tax Act to Suraj Mal individual on basis of information that assessee sold his agricultural land measuring 18B-08B situated in village Ishlampur to company Kareshekh Builders (P.) Ltd. For consideration of Rs. 13.8 lakhs and 109B-110B to company Vaibhav Software & Estate (P.) Ltd. for consideration of Rs. 84,62,500 during period relevant to assessment year 1996-97 but neither copy of reasons recorded nor copy of notice was found on record as agreed by ld. DR before us. reasons for issuing notice were recorded on 29-11-2000 and notice was issued on 28-11-2000 in individual capacity as per photocopy at pages 58 and 56 of paper book respectively. Again on 12-12-2000 proceedings under section 148 were initiated in case of Suraj Mal individual by recording reasons on 12-12-2000. agricultural land referred to in reasons dated 12-12-2000 does not belong to assessee. No proceedings under section 148 has been initiated against assessee-HUF. Neither any reasons were recorded nor any notice under section 148 was served on assessee. Even ld. DR accepted this fact in Bar that there is no evidence in this regard in records of revenue. order sheet starts with issue of notice under section 142(1) on 5-2-2002 to Suraj Mal - Indl., asking him to file his return, who attended proceedings with his authorised representative on 13-2-2002 and 22-2-2002. On 22-2-2002 following proceedings were noted on order sheet as per copy filed before us:- ' Sh. R.P. Gupta, Advocate appeared along with Sh. Suraj Mal. Return of income declaring nil income filed and has shown agricultural income at Rs. 40,000. Written reply filed. You have claimed cost price as on 1-4-1981 at 40,000. Written reply filed. You have claimed cost price as on 1-4-1981 at rate of Rs. 2.5 lakhs per acre. However as Addl. CIT, FBD., in another case adopted value at Rs. 2,00,000 per acre, pl. explain why it should not be taken at Rs. 2 lakhs per acre. You have claimed status of assessee as individual whereas lands sold were ancestral, why status of HUF should not be taken. If HUF status is taken then rebate under section 54B is not allowable. As regards construction of house, you are required to explain cost of construction with index. Case adjourned to 28-2-2002.' As per record, return was filed by assessee in individual capacity on 25-2-2002 and same was initialled by ITO Ward 3 on 26-2-2002 copy of same is available at page 51 of paper book. No notice under section 143(2) was issued on this return. DR could not produce copy of return filed on 22-2-2002 as recorded by Assessing Officer in order sheet or copy of notice being served on assessee-individual or HUF capacity under section 143(2). impugned assessment was made on 28-2-2002 at determining total income of Rs. 1,65,100 by recording following notings on order sheet in status of HUF without recording any reasons to believe in case of assessee-HUF and without issuing any notice to assessee-HUF and on basis of return, evidence for filing of which are not on record:- '28-2-2002 Sh. R.P. Gupta, Adv., along with Sh. Suraj Mal appeared. Written submission filed. He has stated that status of assessee should be taken as HUF as lands were ancestral. As regards rate of land as on 1-4-1981, he has no objection for taking it at Rs. 2,00,000 per acre as taken in other case of Sh. Subha Ram, Vill. Ishlampur (assessed by Addl. CIT, Spl. Range, FBD.). He agrees that rebate under section 54B is not allowable to HUF for construction cost he has filed valuation report which is at Rs. 3,54,000 + 3,38,000= Rs. 6,92,000. But assessee claimed this rebate in return under section 54F at Rs. 6,00,000. No Bank interest or any other income admitted. Agril. Income has been shown at Rs. 40,000. These notings were duly signed by Shri R.P. Gupta, counsel and thumb impression of Sh. Suraj Mal was put up.' 3. assessee went in appeal before CIT(A). Before ld. CIT(A) it was submitted by assessee that assessment was made on Suraj Mal, HUF whereas notice was issued under section 148 in name of Suraj Mal (individual) s/o Shri Shera. If assessment was to be made in capacity of HUF, ld. Assessing Officer should have issued fresh notice under section 148 by recording reasons to assessee-HUF and in absence of such notice n o valid assessment in law could be made on assessee-HUF. It was also contended that no notice under section 143(2) or under section 148 was received or served on assessee. After calling for remand report from Assessing Officer. CIT(A) confirmed order of Assessing Officer on its validity by observing as under:- '18. When A.R. agreed, it meant that return etc., filed by him becomes that of HUF. Having once agreed, he therefore, cannot go back. 19. assessee who had accepted agreed order cannot be allowed to turn around and urge that such order was incorrect or unwarranted. In this regard reliance is also placed on Punjab & Haryana High Court decision in t h e case of Kanshi Ram Wadhwa v. CIT [1982] 138 ITR 830. Though this decision was given in regard to calculation of depreciation but principle laid down by High Court in this case applies squarely to assessee's case also. Lordships had observed in this case:- '. . . It is matter of common knowledge that at time of final arguments assessee sometimes prefer to have agreed order passed by Income- tax Officer and orders passed is sometimes not strictly in accordance with return.' '. . . Had assessee not consented to have agreed order of assessment, Income-tax Officer would have perhaps held enquiry for determining his actual income for that year. assessee having derived benefit of agreed order cannot be allowed to turn around and urge that such order was incorrect or unwarranted. . . .' 20. In view of above, there is no merit in contentions raised by assessee. Assessing Officer was fully justified in holding status of assessee as that of HUF as against claim of status of individual.' action of Assessing Officer denying relief under section 54B was also confirmed and thus appeal of assessee was dismissed. 4. Before us, ld. AR not only disputed orders of lower authorities, he also challenged that there was no initiation of proceedings under section 147 in case of assessee. Neither any valid notice was issued to assessee nor reasons were recorded in case of assessee-HUF and, hence, proceedings are void ab initio. According to him notices dated 28-11-2000 and 12-12-2000 were never served on assessee either in individual capacity or karta of HUF. As per copies, now given to assessee, both these notices appear at pages 54 and 56 of paper book, and even copy was made available to assessee after inspecting file at this stage. Copies of any other notice under section 148 was not available to assessee as there is no such notice dated 22-12-2000 as referred in assessment order. When Bench confirmed from ld. DR he was fair enough to concede that no notice dated 22-12-2000 is on record. Both notices dated 28-11-2000 and 12-12-2000 are addressed and issued to Shri Suraj Mal son of Shera. It was further submitted that even otherwise notice dated 28-11-2000 (page-56 of PB) could not have been issued, since reasons were recorded only on 29-11- 2000 (page 58 of paper book). Moreover reasons recorded indicate evasion of Rs. 68.54 lakhs and Rs. 13.80 lakhs respectively as against assessment was made only at income of Rs. 1.65 lakhs. Apparently reasons recorded relate to some other person of similar name. assessment order and remand report confirm all these facts. Therefore, assessment could not have been made under section 147 on basis of any of these notices, none of which was served on assessee. It is only notice under section 142(1) dated 5-2-2002 which was served on Suraj Mal not on assessee-HUF. Our attention was also brought to order sheet, copy of which is at pages 29 to 31 of paper book, which starts from 5-2-2002 and records proceedings dated 5/2, 13/2, 22/2 and 28/2/2002 only. It was vehemently submitted that no proceedings could be said to have taken place before that date. It was also denied that any return was filed on or before 25-2-2002. return was filed only on 25-2-2002, as admitted in assessment order itself in return was filed only on 25-2-2002, as admitted in assessment order itself in individual capacity and that assessee had attended only in response to notice under section 142(1) on 13-2-2002 and again on 22-2-2002 and finally on 28-2-2002 as is clear from order sheet. Thus question of any discussion on 22-2-2002 on return already filed and claim of status therein does not arise. No notice under section 143(2) was issued on return filed on 25-2- 2002. Even on that ground order passed under section 143(3) read with section 147 without issuing notice under section 143(2) is invalid. assessment order, remand report and order sheet contradict each other and n o valid order can be made on face of such contradictions and assumed facts. Regarding consent, ld. A.R. argued that there cannot be any consent against law, and any such order passed on basis of such consent is bad in law. A.R. of individual did not have any power of attorney from assessee-HUF. There has been no investigation on existence of such HUF o f late Shri Shera, on basis of which two brothers are stated to have formed their separate smaller HUFs. only meaning allotted to such consent could be that assessment is not to be made on individual and it may be made on HUF, but by issue of notice to HUF as specifically stated therein. Reliance was placed on judgments of Hon'ble Supreme Court in CIT v. K. Adinarayana Murthy [1967] 65 ITR 607, CWT v. Ridhkaran [1972] 84 ITR 705 (Raj.) and AAC v. B. Appaiah Naidu [1972] 84 ITR 259 (SC). On this ground also, it was vehemently argued that assessment is bad in law. 5. It was further submitted that issue of status of inherited property has been dealt with by ITAT in cases of Ishwar Singh S/o Rattan Singh & others (five brothers) relating to similar properties in respect of other assessee and assessment has been made in individual capacity in same village on same set of circumstances of inheritance and accepted by same Assessing Officer. Our attention was drawn to order of ITAT/CIT(A)/Assessing Officer at pages 60-77 of paper book, asserting that in case of Shri Ishwar Singh same Assessing Officer under same circumstance discussed in detail at page-3 (page-80) of paper book issue of status and came to conclusion that assessee had to be assessed only as individual, relying on several judgments of Supreme Court and High Courts quoted therein. It was further stated that in case of Bhim Singh learned CIT(A) relied on judgment of Hon'ble Punjab & Haryana High Court, 'that assessee is governed by customary law whereby status of HUF cannot be imposed on appellant. And this fact has been recognized by same Assessing Officer himself in case of Sh. Ram Singh and Sh. Chet Ram.' learned AR further relied on written submissions filed on 2-1-2006. 6. With regard to cost of acquisition, it was submitted that Hon'ble ITAT in case of Ishwar Singh set aside case to Assessing Officer to take value as on 1-4-1981 as taken by him/CIT(A) in similar other cases of same village, which it was urged, as per orders brought on record at pages 70 and 75, was Rs. 4 lakhs per acre. It was, therefore, contended that in this case also same value be adopted as on 1-4-1981. 7. ld. DR justified action of lower authorities submitting that notice under section 148 was validly issued. But when questioned by Bench, he agreed that there is no notice issued to assessee-HUF. Even there is no notice on record for initiating proceedings under section 148 on 22-12-2000. It was also conceded that no notice under section 143(2) was issued on return filed by assessee in individual capacity on 25-2-2002. reasons were duly recorded on 29-11-2000 as is evident from page 58 of paper book. With regard to specific query from Bench whether any notice was issued in name of HUF, ld. DR replied in negative but submitted that assessee had consented to assessment in status of HUF and, therefore, action of Assessing Officer is justified. In support, ld. DR placed reliance on decision of Munnilal Shivnarain Kothari's case (supra). It was further submitted that even if there was any procedural defect, authorities are competent to rectify same. In support, ld. DR relied on decisions of Remfry & Sons' case (supra) and that of Durga Prasad More's case (supra). Ld. DR further submitted that order passed by ld. CIT(A) is well-reasoned. 8. I have carefully considered rival submissions as well as case laws relied on before us from both sides. I have also gone through decisions of tax authorities. This is admitted fact that proceedings under section 147 were initiated in case of Suraj Mal individual on 22-12- 2000 as mentioned in assessment order and claimed by ld. DR but there is no evidence or material for same in file of revenue, which they produced before us and to which I verified. record only relate to initiation of proceedings under section 147 on 28-11-2000 and 12-12-2000 not in case of assessee but in case of individual. reasons for initiating even proceedings in individual case were recorded on 29-11-2000 that is after initiation of proceedings on 28-11-2000. Therefore, on that account itself assessment in our opinion is liable to be struck down as recording of reasons cannot take place after issuance of notice under section 148. Even no reasons as required under section 148(2) were recorded in case of assessee-HUF. No notice neither under section 148 or 143(2) or 142 was issued in case of assessee-HUF. assessee-HUF filed no return. proceedings under section 147 were initiated in case of Shri Suraj Mal in individual capacity although even no evidence for service of notice under section 148 on Shri Suraj Mal is available on record. return of income was filed on 25-2-2002 while Assessing Officer has mentioned in order sheet on 22-2-2002 that return of income declaring nil income was filed in case of Suraj Mal. No evidence was filed by ld. DR before us to prove that assessee either in individual or HUF capacity filed return on 22-2-2002 although ld. DR has brought assessment record. In my opinion, no valid assessment can be framed under section 143(3) on return which was never filed or if filed until and unless notice under section 143(2) is issued to assessee. I have seen order sheet and found that there is nothing on record for issuance of notice under section 143(2) either in respect of return which Assessing Officer presumed to have been filed on 22-2-2002 or in respect of return which was in reality filed on 25-2-2002. From this, it appears that assessment has been framed by Assessing Officer in manner avoiding all provisions of law to which he is duty bound to follow while framing assessment. Assessing Officer in our view should understand that he is exercising quasi-judicial power and in doing so he must act in fair and not partisan manner. Although it is part of his duty to ensure that no tax which is legitimately due from assessee should remain unrecovered, he must also at same time not act in manner as might indicate that he thought himself as if he is creater or framer of Income-tax Act forgetting that he is one of administrative authority created under said Act and in that process he ignores to comply with obligations which are entrusted on him under various provisions of Income-tax Act while passing assessment order. powers should not be exercised in manner that scales are weighted against assessee. Issuance of notice under section 143(2) is mandatory and foundation for passing order under section 143(3). It cannot be regarded to be irregularity, which could be cured. Non-issue of notice under section 143(2) before passing assessment order under section 143(3) is illegality. Since in this case, no notice under section 143(2) was issued to assessee in individual or HUF capacity, order passed under section 143(3) is nullity and accordingly I annul same on this basis also. Since both parties has argued at length and put extraneous labour on various issues arising in this appeal. Therefore, I would like to deal with other pleas being raised before us relating to legality of assessment order. 9. I now deal with issue whether consent of assessee in individual capacity will make assessment valid in this case specially when there is no initiation of proceedings under section 147 in case of assessee-HUF. There is no denial of fact that during course of proceedings in case of Shri Suraj Mal, Individual, counsel of Shri Suraj Mal individual along with karta of HUF agreed that assessment should be made on assessee-HUF. question arises whether such assessment on assessee-HUF is valid one or not. Relevant provisions of section 147 are as under:- '. . . If Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section, or recompute loss or depreciation allowance or any other allowance, as case may be, for assessment year concerned (hereinafter in this section and in sections 148 to 153 referred to as relevant assessment year): Provided that where assessment under sub-section (3) of section 143 or this section has been made for relevant assessment year, no action shall be taken under this section after expiry of four years from end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under section 139 or in response to notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year.' From reading of above, it is clear that Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Thus, reason to believe is necessary for reassessing or assessing assessee under section 147 of Income-tax Act. Reassessment means that assessee has already been assessed and is being assessed again. Assessment simply means that assessee has not already been assessed earlier and assessed for assessment year for first time. Proviso to this section is applicable, if assessment has been framed under section 143(3) or under section 147 and action is taken by Assessing Officer, after expiry of four years from end of relevant assessment year. Therefore, first requisite for exercising jurisdiction under section 147 is that there must be reasons to believe in case of assessee-HUF. ld. DR before us was fair enough to concede that no reasons to believe were found on record in case of assessee-HUF. case of MTNL v. Chairman, CBDT [2000] 246 ITR 173 (Delhi) of jurisdictional High Court is squarely applicable for reasons to believe to be main requisite to be complied with by Assessing Officer before initiating proceedings under section 147. view of Hon'ble High Court in MTNL's case (supra) is reproduced hereunder:- 'Section 147 authorises and permits Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. word 'reason' in phrase 'reason to believe' would mean cause or justification. If Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that income had escaped assessment. expression cannot be read to mean that Assessing Officer should have finally ascertained fact by legal evidence or conclusion. should have finally ascertained fact by legal evidence or conclusion. function of Assessing Officer is to administer statute with solicitude for public exchequer with inbuilt idea of fairness to taxpayers. As observed by Apex Court in Central Provinces Manganese Ore Co. Ltd. v. ITO 191 ITR 662, for initiation of action under section 147(a) (as provision stood at relevant time) fulfilment of two requisite conditions in that regard is essential. At that stage, final outcome of proceeding is not relevant. In other words, at initial stage, what required is 'reason to believe', but not established fact of escapement of income. At stage of issue of notice, only question is whether there was relevant material on which reasonable person could have formed requisite belief. Whether materials would conclusively prove escapement is not concern at that stage. This is so because formation of belief by Assessing Officer is within realm of subjective satisfaction [see ITO v. Selected Dalurband Coal Co. (P.) Ltd. 217 ITR 597 (SC); Raymond Woollen Mills Ltd. v. ITO 236 ITR 34 (SC)]. scope and effect of section 147 as substituted with effect from 1-4- 1989, as also sections 148 to 152 are substantially different from provisions as they stood prior to such substitution. Under old provisions of section 147, separate clauses (a) and (b) laid down circumstances under which income escaping assessment for past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied, firstly, Assessing Officer must have reason to believe that income, profits or gains chargeable to income-tax have escaped assessment, and, secondly, he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on part of assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions are conditions precedent to be satisfied before Assessing Officer could have jurisdiction to issue notices under section 148 read with section 147(a). But under substituted section 147, existence of only first condition suffices. In other words, if Assessing Officer for whatever reason has reason to believe that income has escaped assessment, it confers jurisdiction to reopen assessment. It is, however, to be noted that both conditions must be fulfilled, if case falls within ambit of proviso to section 147. case at hand is covered by main provision and not by proviso.' Hon'ble High Court considered provisions of section 147 prior to amendment and after amendment in case of Bawa Abhai Singh v. Dy. CIT [2002] 253 ITR 83 (Delhi) relied on by ld. DR, at page 88, it was clearly held: 'The crucial expression is 'reason to believe'. expression predicates that Assessing Officer must hold belief. . . by existence of reasons for holding such belief. In other words, it contemplates existence of reasons on which belief is founded and not merely belief in existence of reasons inducing belief. Such belief may not be based merely on reasons but it must be founded on information. As was observed in Ganga Saran & Sons (P.) Ltd. v. ITO 130 ITR 1 (SC), expression 'reason to believe' is ker than expression 'is satisfied'. belief entertained by Assessing Officer should not be irrational and arbitrary. To put it differently, it must be reasonable and must be based on reasons, which are material. In S. Narayanappa v. CIT 63 ITR 219, it was noted by Apex Court that expression 'reason to believe' in section 147 does not mean purely subjective satisfaction on part of Assessing Officer, belief must be held in good faith; it cannot be merely pretence. It is open to court to examine whether reasons for belief have rational nexus or relevant bearing to formation of belief and are not extraneous or irrelevant for purpose of section. To that limited extent, action of Assessing Officer in initiating proceedings under section 147 can be challenged in court of law.' It was further observed: 'Up to 31-3-1989, two conditions were required to be fulfilled to confer jurisdiction on Assessing Officer to act under section 147(b). They are (1) he must have information which comes into his possession subsequent to making of original assessment order, and (2) that information must lead to his belief that income chargeable to tax has escaped assessment, or that it has been under-assessed or assessed at too low rate or has been made subject of excessive relief. After 1-4-1989, position is somewhat different. Section 147 with effect from 1-4-1989, provides that where Assessing Officer h s reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may apply provisions of sections 148 to 153. He may assess or reassess income, which has escaped assessment. It is to be noted that section 147 as it stands with effect from 1-4- 1989, not only merges clauses (a) and (b) of pre-amended section 147 but also brings about significant change in preliminary requirement of certain conditions mandatory in character before reassessment proceedings should be initiated in pre-amended section. conditions precedent for initiation of action under section 147(a) or 147(b) of pre-amended situation is highlighted above. amended provisions are contextually different and cumulative conditions spelt out in clause (a) or (b) of section 147 prior to its amendment, are not present in amended provision. only condition for action is that Assessing Officer should have reason to believe that income has escaped assessment, which belief can be reached in any manner and is not qualified by pre-condition of faith and true disclosure of material fact by assessee as contemplated in pre-amended section 147(a) of Act and Assessing Officer can under amended provisions legitimately reopen assessment in respect of income which has escaped assessment. Viewed in that angle power to reopen assessment is much wider under amended provision and can be exercised even after assessee has disclosed fully and truly all material facts. To similar view were conclusions of this court in Rakesh Aggarwal v. ACT 225 ITR 496, it is to be noted at this juncture that twin conditions must be fulfilled if case is one, which is covered by proviso to section 147 operative with effect from 1-4-1989.' 10. expression 'reason to believe' as used in section 148 connotes bona fide belief entertained in good faith by person of normal prudence that income has escaped assessment. Such belief should be founded on materials on record. belief should be rational and not arbitrary. Further section 148(2) makes it obligatory on part of Assessing Officer to record his reasons to believe before issuing notice under this section. Serving of notice on assessee is also mandatory under section 148(1) requiring assessee to furnish within such period as may be specified in notice, return of his income or income of any other person in respect of which he is assessable under this Act during previous year corresponding to relevant assessment year. Thus in view of provisions of sections 147 and 148, all following conditions must be satisfied for valid action being taken by Assessing Officer:- (a)The Assessing Officer must have reasons to believe that assessee has escaped income chargeable to tax. (b)The reasons to believe must be recorded by Assessing Officer prior to issuing of any notice to assessee. (c)Before making assessment, Assessing Officer must serve notice o n assessee requiring him to furnish return in accordance with provisions of section 148(1). 11. Looking to facts of case, I find that none of conditions as stipulated above has been complied with by Assessing Officer what to talk of complying with all conditions while passing order in case of assessee-HUF. Rather, this fact was conceded by ld. D.R. but he stressed that assessment order is valid because Shri Suraj Mal has given consent during course of assessment proceedings relating to individual, for being assessed in HUF capacity. Under section 2(31), Individual and Hindu Undivided Family are different persons and are regarded to be separate assessee. Conditions complied with in case of one assessee cannot be deemed to have been complied with in case of another assessee even if that another assessee agreed to it. This is settled proposition of law that there cannot be estoppels against statute. Initiation of valid proceeding is t h e foundation for passing valid assessment. I am of view that non- compliance of conditions as laid down in sections 147 and 148 are not mere irregularity but it is illegality which cannot be cured by consent of parties. irregularity can be cured but not illegality. 12. In case of Kanshi Ram Wadhwa (supra) as relied by CIT(A) and cited by ld. DR, issue was that assessee had agreed at particular amount of income after depreciation and subsequently assessee contended that depreciation was not actually allowed, on these facts it was held by Hon'ble Madhya Pradesh High Court 'Held, that assessee having derived benefit of agreed order of assessment, could not contend that ITO did not allow any depreciation during relevant assessment year. Tribunal was right in holding that depreciation was computed and allowed actually in year 1971- 72.' This case in our opinion will not help revenue because in that case assessee was same and he agreed for income during course of assessment proceedings, which was validly initiated. In case before us, there is no initiation of assessment proceedings against assessee-HUF and there is no question of agreeing to quantum of income. case of Munni Lal Shiv Narain Kothari (supra) pertains to assessment of AOP as firm, where under 1922 Act, ITO was given discretion under section 3 read with section 30 either to assess firm or its partners, AOP or members of associations individually, but now under Income-tax Act, 1961 such discretion is not available. Thus, this case relates to specific provisions of Act which empowers Assessing Officer to assess firm as AOP and cannot be applied generally for assessing any person in any other capacity or status. Further this case does not relate to assessment passed under section 143(3) read with section 147. Initiation of valid proceedings was not in dispute. Thus this case also in our opinion will not assist revenue. other case of Durga Prasad More (supra) relates to issue whether department is bound to locate source of receipt assessable as income. Question was if income liable to tax in India was earned by assessee department had not to prove source thereof. Once again this too did not relate to determination of status of assessee and validity of initiation of proceedings under section 147. Now coming to case of Remfry & Sons (supra), in this case Hon'ble High Court has dealt with meaning of 'illegality' which has been defined as contrary to law or unlawful and that it is distinguishable from irregularity, which has been defined as want of adherence to prescribed rule or mode of proceedings and consist of omitting to do what is necessary. word 'illegality' on other hand denotes complete defect in jurisdiction or proceedings. 'In this case assessee had not properly signed MOA and appeal was dismissed on this ground by CIT(A) and confirmed by ITAT, but High Court in light of above distinction held that non-signing of MOA was mere irregularity which was curable. It was not illegal or unlawful. This case in my opinion supports case of assessee not that of revenue. Because in absence of compliance of provisions of sections 147 and 148, I am of view that Assessing Officer does not have any jurisdiction and this tantamount to complete defect in jurisdiction and proceedings as has happened in this case. In cases of G.K. Devarajulu (supra), Pravin Chand Mohin Kumar (supra) and CIT v. R. Vijayakumar [1995] 214 ITR 483 (Mad.), limited issue was whether existing HUF who filed its returns as HUF were entitled to deduction under section 54B and Hon'ble Court decided against assessee but significant difference between individual and HUF by stating, 'that only individual can have parent and that HUF cannot have parent' and hence assessee or parent of his can only mean individual and thus deduction is not available to any other entity of assessment including HUF which is also separate and distinct entity under Act. Thus, this case also would support case of assessee that 'individual' and HUF are two distinct entities under Act with separate and distinct rights and obligations in accordance with provisions of Act. There is no provision in Act to make assessment on another person, i.e., HUF by converting return filed by individual. Yes, it could be done by initiating separate proceedings against HUF if Assessing Officer was of opinion that particular income belonged to HUF and was taxable in hands of HUF, which has not been done in this case. 13. Coming to case of K. Adinarayana Murthy (supra), on which ld. R has kly relied, facts in this case are that respondent was HUF. Subsequent to original assessment, ITO had information that respondent had done some procurement business and earned large profits which had escaped assessment for assessment year 1949-50. Since for assessment year 1954-55, ITO had taken status of respondent to be that of 'individual', he issued notice under section 34 of Income-tax Act on 22-3-1957 to reopen assessment for assessment year 1949-50 in status of individual, having taken sanction of CIT to make reassessment in that status. respondent, however, filed return in status of 'Hindu Undivided Family'. Pending proceedings AAC, in appeal against assessment for year 1954-55 held that status of respondent was that of HUF. Thereafter, ITO issued fresh notice under section 34 on 12-2-1958, to reassess income of respondent for year 1949-50 as 'HUF'. second return was duly filed pursuant to second notice and ITO made assessment on 16-8-1958. Both notices were, however, in identical terms. question was whether assessment made pursuant to second notice and second return, ignoring first return filed pursuant to first notice, was valid, Hon'ble Supreme Court on these facts held that since correct status of respondent was that of 'HUF' first notice issued in status of individual was illegal and without jurisdiction and t h e ITO could not have validly acted on return filed by respondent pursuant to that notice, notwithstanding that it was made in status of Hindu undivided family, and any assessment made on such return would have been invalid. ITO was entitled to ignore that return as being non est in law. second notice issued on 12-2-1958, was valid and return filed in response to that notice and assessment thereon were valid. This judgment in our opinion supports proposition of law that initiation of proceedings should be against assessee on which assessment order is passed. 14. In case of Ridhkaran (supra) Hon'ble Rajasthan High Court dealt with similar question as is before me. question was whether return filed as HUF in response to notice under section 14(2) of Wealth-tax Act can be assessed as individual without fresh return. Hon'ble High Court held that t h e Wealth-tax Officer is not competent to assess them in status of individuals without serving them with notices to file fresh returns as individual. 15. In case of B. Appaiah Naidu (supra) Hon'ble Supreme Court specifically answered question of 'time-barred assessment'. In this case assessment was made under Mysore Act on death of assessee in hands of legal representative 'S' where High Court held that there was no provisions corresponding to section 24B of Indian Income-tax Act, 1922 in Mysore Act to make assessment on legal representative and cancelled assessment. revenue wanted that assessee should therefore be given status of HUF (as envisaged by Mysore Act) because no reassessment could be made against family as it was barred by time. Supreme Court held, 'that since assessment was made in respect of Supreme Court held, 'that since assessment was made in respect of assessees' income on his legal representative in status of individual and not as karta of his HUF, department could not be permitted to change its case at stage before Supreme Court and contend that in reality assessee was family'. 16. In view of aforesaid discussion, I hold that conversion of status from individual to HUF and vice versa cannot take place on same return. For this fresh notice has to be issued to that assessee who is proposed to be assessed on income so evaded/escaped assessment. cases of voluntary return filed for first time under section 139(1), where status is to be determined for first time stand on totally different footing where claim itself is to be determined. In present case notice was issued to individual under section 148 and return also filed by individual and thus question of determination of status did not arise. If Assessing Officer was of opinion that notice had been wrongly issued to individual he had every right to issue fresh notice to HUF and proceed on that, and assess individual to nil income, which has not been done. Thus even on this ground also assessment on HUF fails. I, therefore, annul assessment passed by Assessing Officer on HUF. 17. Since I have cancelled assessment, other grounds taken by assessee will not survive. Further I may point out that in case of Rahul Kumar Bajaj v. ITO [1999] 69 ITD 1 (Nag.) (SB), in which it was held- ' . . . purpose of Tribunal is to render justice and not to negate it. In instant case, it was proved that three issues were before Tribunal. First issue, i.e., reopening of assessment, was paramount/nodal issue and other two issues were subsidiaries/alternative issues. first issue was admittedly decided by Tribunal in favour of assessee. Once jurisdictional issues were decided in favour of assessee, there was no requirement/necessity to decide other issues.' judgment of Special Bench is binding on us. 18. In result, appeal of assessee is allowed. REFERENCE UNDER SECTION 255(4) OF INCOME-TAX ACT ld. Judicial Member has proposed his order in case of Shri Suraj Mal, HUF, Faridabad in ITA No. 1125/Delhi/2005 to which ld. Accountant Member did not agree and has drafted his separate order. We, therefore, request your honour to refer following point/question of difference to Third Member. Point of difference '1. Whether on facts and circumstances of case, it can be said that there is valid initiation of proceedings under section 147 in case of assessee-HUF although no reasons to believe were recorded in case of assessee-HUF nor any notice was served to assessee-HUF?' 2. Whether there was valid service of notice under section 143(2) on assessee-HUF? 3. Whether on facts and circumstances of case, assessment order passed must he annulled or confirmed so far it relates to validity of proceedings initiated under section 147 and service of notice on assessee under section 143(2) is concerned? 4. Whether in facts and circumstances of case, Assessing Officer erred in framing assessment in status of HUF on basis of consent given by assessee although notices were issued in status of individual?' THIRD MEMBER ORDER Per Vimal Gandhi, President, as Third Member. - On account of difference between learned members of Income-tax Appellate Tribunal, 'F' Bench, New Delhi, this matter with following points of difference has been referred to me under section 255(4) of income-tax act:- ' 1. Whether on facts and circumstances of case, it can be said that there is valid initiation of proceedings under section 147 in case of assessee-HUF although no reason to believe were recorded in case of assessee-HUF nor any notice was served to assessee-HUF? 2. Whether there was valid service of notice under section 143(2) on assessee-HUF? 3. Whether on facts and circumstances of case, assessment order passed must be annulled or confirmed so far it relates to validity of proceedings initiated under section 147 and service of notice on assessee under section 143(2) is concerned? 4. Whether in facts and circumstances of case, Assessing Officer erred in framing assessment in status of HUF on basis of consent given by assessee although notices were issued in status of individual?' 2. facts of case are that assessee (exact status is matter of controversy) sold some land, in period relevant to assessment year 1996-97, on which, according to revenue, taxable capital gain had accrued. Assessing Officer accordingly initiated action to assess gain and issued notices under section 148 of Income-tax Act. First notice dated 28-11-2000 is alleged to have been issued by ITO, Ward-2, Gurgaon. However, reasons as per requirement of section 148(2) were found to be recorded on 29-11-2000. As notice could only be issued after recording reasons, above illegality appears to have been noticed and, therefore, second notice on 12-12-2000 was issued after recording reasons which are as under:-- ' 1. assessee is resident of Village Ishlampur, Gurgaon. 2. He has sold his agricultural land measuring 18B-08B to company Kareshekh Builders (P.) Ltd. during assessment year 1996-97 for Rs. 13,80,000. 3. land falls within 8 km of municipal limits of Gurgaon. Hence, as per notification dated 6-1-1994. It falls within definition of capital assessment per notification dated 6-1-1994. It falls within definition of capital assessment under section 2(14). 4. Hence, capital gain on above sale is leviable. 5. value of this land as on 1-4-1981 is estimated at Rs. 1 lakh per acre as per sales of that time because urbanization of Gurgaon and surrounding has started with effect from 1988-89 onward only. total cost of this land is worked out as under: - Estimated cost of land as on 1-4-1981 Rs. 9,20,000 Indexed cost of land Rs. 2,58,520 6. amount liable to capital gain is calculated as under:- Sale consideration Rs. 19,80,000 Less: Indexed cost Rs. 2,58,520 Net amount Rs. 11,21,480 Hence amount of Rs. 1,12,140 liable to capital gain at rate of 20 per cent has escaped assessment.' 3. assessee claimed that none of notices were served on him. In response to notice dated 28-12-2001 and 13-2-2002 under section 142(1), return was filed declaring nil income and agricultural income at Rs. 40,000 for rate purposes. 4. above return was filed in status of individual. In course of assessment proceedings, Assessing Officer records as under:- 'Shri R.P. Gupta, Adv. appearing along with Shri Suraj Mal. Return of income declaring nil income filed and has shown agricultural income at Rs. 40,000. Written reply filed. You have claimed cost price as on 1-4-1981 at rate of Rs. 2.50 lakhs, per acre. However, Addl. CIT, Faridabad in another case adopted rate at Rs. 2,00,000 per acre. Pl. explain why it should not be taken at Rs. 2 lakhs per acre. You have claimed status of assessee as individual whereas land sold were ancestral, why status of HUF should not be taken, if HUF status is taken then rebate under section 54B is not allowable. As regards construction of house, you are required to explain cost of constructions. Case adjourned to 28-2-2002. Shri R.P. Gupta, Adv. along with Shri Suraj Mal appeared. Written submission filed. He has stated that status of assessee should be taken as HUF as lands were ancestral. As regards cost of land on 1-4-1981 he has no objection for taking it at Rs. 2,00,000 per acre as taken in other case o f Shri Subh Ram, Vill. Ishlampur (assessed by Addl. CIT, Spl. Range, Faridabad). He argues that rebate under section 54B is not allowable to HUF. For construction cost he has filed valuation report which is at Rs. 3,54,000 + Rs. 3,38,000 = Rs. 6,92,000. But assessee claimed rebate in rebate under section 54B at Rs. 6,00,000. No bank interest or any other income admitted. Agricultural Income has been shown at Rs. 40,000.' 5. Assessing Officer accordingly completed assessment in status of HUF and took net assessable capital gain at Rs. 1,65,100 vide order dated 31-3-1996. 6. assessee impugned above assessment and in appeal before Commissioner of Income-tax (Appeals) and challenged validity of notices under section 148 of Income-tax Act. status in which assessment was made was also challenged. Ld. Commissioner of Income-tax (Appeals), after considering facts and circumstances of case, did not find any force in any of t h e contentions raised in appeal before her. Accordingly, appeal was dismissed. 7. challenge to assessment was then brought before Income- tax Appellate Tribunal. Apart from merit, assessee kly contested legality of initiation of proceedings under section 147/148 and status in which assessment was made. entire process was challenged as illegal and without jurisdiction. After hearing, ld. Members of Bench did not agree on order to be passed and issued dissenting proposed orders. 8. ld. AM, as per his proposed order, has taken view that assessment made in status of HUF without issuing any notice to assessee-HUF was bad in law. He has observed that if assessment was to be made in capacity of HUF, ld. Assessing Officer should have issued fresh notice to HUF after recording reasons under section 148 of Income-tax Act. Ld. AM noticed decision of Hon'ble Punjab & Haryana High Court in case of Kanshi Ram Wadhwa (supra) kly relied upon by revenue and held that same was distinguishable on facts. ld. AM further held that neither any valid notice was issued in this case to assessee nor reasons were recorded regarding escapement of income of HUF. Hence, proceedings against HUF were void ab initio. Moreover, he found that reasons recorded related to evasion of sum of Rs. 68.54 lakhs and Rs. 13.80 lakhs respectively against assessment in this case of made at income of Rs. 1.65 lakhs only. Apparently, reasons recorded relate to some other person of some other property. ld. AM further found that no notice was issued under section 143(2) of Income- tax Act on return filed on 25-2-2002. In opinion of ld. AM, entire proceedings of assessment were illegal. In present case, Assessing Officer further had 'no reason to believe that income had escaped assessment' to take action under section 147 of Act. matter was treated as covered against revenue as per decision of Delhi High Court in case of MTNL (supra). ld. AM also held that conditions of section 147/148 were not satisfied. Ld. AM relied upon decision in case of Ridhkaran (supra) where question was whether return filed as HUF could be assessed as individual without fresh return. Hon'ble High Court held that WTO is not competent to assess them in status of individual without serving them with notice to file fresh return as individual. ld. AM categorically held that conversion of status from individual to HUF and vice versa cannot take place on same return. In present case, notice was issued to individual under section 148 and return also filed by individual and, thus, question of determination of status did not arise. If Assessing Officer was of opinion that notice has wrongly been issued to individual, he had every right to issue fresh notice to HUF but no such action was taken. He, therefore, annulled assessment. ld. AM, also in penultimate paras of proposed order, relied upon decision of Special Bench in case of Rahul Kumar Bajaj (supra). 9. ld. JM did not agree with above view. He reproduced grounds raised by assessee before Tribunal. He noted that assessment was made in status of HUF although notice was received in name of Shri Suraj Mal individual under section 148 of Income-tax Act. For disposal of appeal, ld. J.M. noted entry dated 28-2-2002 in order sheet of Assessing Officer and held that assessee had consented to be assessed in status of HUF although notice was issued to assessee in individual capacity. Had assessee not consented to assessment in status of HUF, Assessing Officer might have examined issue of status and issued notice to assessee in that status. Having consented to assessment in status of HUF, now assessee cannot be allowed to turn around and argue that such order was incorrect or unwarranted. Assessing Officer had first obtained consent of assessee and, thereafter, proceeded to make assessment on 28-2-2002. ld. Commissioner of Income-tax (Appeals) in impugned order had rightly relied upon decision in case of Kanshi Ram Wadhwa (supra). He held that principle of Estoppel as Rule of Evidence and section 115 of Evidence Act recognizes this rule were applicable. basis of Estoppel is that it would be unfair and unjust to allow party to depart from particular state of affair, which another has taken to be correct. ld. JM upheld assessment and dismissed appeal in his proposed order. 10. Third Member case was fixed for hearing and Shri K.P. Garg, CA has been heard on behalf of appellant. Shri Durga Charan Das, CIT (DR) and Shri Amit Govil, Sr. DR have been heard for revenue. first question required to be considered is whether any legal and valid notice under section 148 was issued in this case. As already noted, first notice under section 148 was issued on 28-11-2000. But that is not notice which is relied upon or issued on 28-11-2000. But that is not notice which is relied upon or mentioned by Assessing Officer in assessment order. Apparently, this notice was issued without recording reasons under section 148(2) of Income- tax Act on 28-11-2000 whereas reasons were recorded day later, i.e., on 29- 11-2000. Perhaps, for above reasons, Assessing Officer ignored and issued second notice on 12-12-2000 (wrongly written as 22-12-2000 in assessment order). I have already noted reasons under section 148(2) of Income-tax Act for issuing said notice. said notice suffers from several legal infirmities. In first place, transaction noticed related to sale of some agricultural land sold to Kale Shekh Builders Pvt. Ltd. and not by assessee. Further sale consideration is taken at sum of Rs. 13,80,000. This is not transaction with which assessee was connected. So, notice was issued in respect of some other transaction carried by some other person. Secondly, notice is admittedly issued to assessee Suraj Mal, individual. No notice was issued to HUF in which status assessment was subsequently made. assessee has vehemently contended throughout that no notice under section 148 was served on assessee. There is neither any finding nor there is any material to refute claim of assessee. In above circumstance, it is difficult to hold that valid notice under section 148 of I.T. Act was issued in this case. 'Reason to believe that income had escaped assessment' was formed by taking transaction not carried by assessee. status in which notice was issued was also wrong as even as per Assessing Officer, land was ancestral and, therefore, notice should have been issued to assessee in status of HUF. Notices were issued without application of mind. 11. It is settled law that there must be valid reasons, material and circumstances leading to belief that income had escaped assessment. Any good or bad reason is not sufficient to sustain initiation of proceedings under section 147/148 as valid. Therefore, I agree with reasons given by ld. AM for holding that no valid proceedings were initiated in this case under section 147/148 of Income-tax Act. 12. other important question required to be considered is whether having initiated proceedings under section 147/148 of Income-tax Act in case of individual, could Assessing Officer make valid assessment in status of HUF without issuing any notice under section 148 of Income-tax Act. ld. AM has held view that this could not be done. ld. JM, on other hand, has approved action of revenue authorities by mainly relying upon decision of Hon'ble Punjab & Haryana High Court in case of Kanshi Ram Wadhwa (supra). 13. ld. JM has held view that assessee, having consented to assessment in status of HUF, cannot be allowed to turn around and argue that such order was incorrect or unwarranted. According to ld. JM, Principle of Estoppel is applicable in this case. In my view, Income-tax Act recognizes status of HUF different from individual status of karta of HUF. Two are treated as different legal entities. Therefore, it is necessary that notice under section 148 of Income-tax Act should be sent in correct status because jurisdiction to make assessment is assumed by issuing valid notice. Admittedly, in this case, it was sent to individual. assessment of HUF is taken to be justified on basis of decision of Hon'ble Punjab & Haryana High Court in case of Kanshi Ram Wadhwa (supra). head note of said case is as under:- 'The essence of scheme of Indian Income-tax Act is that depreciation is allowed, year after year, on actual cost of assets as reduced by depreciation actually allowed in earlier years. It follows, therefore, that even in case of assets acquired before previous year, where in past no depreciation was computed, actually allowed or carried forward, for no fault of assessee, 'written down value' may, under clause (b) of section 43(6) also, be 'the actual cost of assets to assessee'. profits under section 41(2) should be computed by deducting depreciation actually allowed under section 32 and not any notional depreciation allowable under section 32. Where assessment order for 1971-72 showed that assessee had agreed to his income being taken at particular figure, and that depreciation had been allowed as agreed to by assessee, and, for assessment year 1972- 73, assessee contended that no depreciation had been actually allowed in earlier year: Held, that assessee having derived benefit of agreed order of assessment, could not contend that ITO did not allow any depreciation during relevant assessment year. Tribunal was right in holding that depreciation was computed and allowed actually in 1971-72.' 14. It is clear from above that assessee had claimed depreciation on asset used by assessee in return for assessment year 1971-72. Subsequently, assessment for above year was made on agreed basis. In following assessment year 1972-73, assessee claimed that no depreciation was actually allowed to assessee. Therefore, for purposes of written down value, depreciation claimed for assessment year 1971-72 should not be deducted. This contention of assessee was rejected for reason given in head note. 15. aforesaid decision, in my view, has no application to facts of case and has rightly been distinguished by ld. AM. It is well-settled that Principle of Estoppel or res judicata do not apply to proceedings under Income-tax Act. Their Lordships of Punjab & Haryana High Court in case of Kanshi Ram Wadhwa (supra) did not hold that above principles are applicable to income-tax proceedings. It is also settled law that assessment under Income-tax Act has to be made in accordance with statutory provisions and not on agreement or consent of assessee. jurisdiction to make assessment can be assumed only on satisfaction of condition as prescribed under law. It cannot be conferred with consent of parties. Therefore, in my view, after having issued notice under section 148 of Income-tax Act to individual, ITO had no jurisdiction to assess HUF of assessee. He could assume jurisdiction by issuing valid notice under section 148 of Income-tax Act after satisfying conditions laid down under section 147. This was not done and, therefore, entire proceedings have rightly been held by ld. AM to be illegal and without jurisdiction. In case of K. Adinarayana Murty (supra), notice was issued by Assessing Officer to HUF but assessment was made in status of individual. Their Lordships observed as under:- 'Under scheme of Income-tax Act, 'individual' and 'Hindu Undivided Family' are treated as separate units of assessment and if notice under section 34 of Act is wrongly issued to assessee in status of individual and not in correct status of Hindu Undivided Family, notice is illegal and all proceedings taken under that notice are ultra vires and without jurisdiction.' 'Held, that since correct status of respondent was that of 'Hindu Undivided Family', first notice issued in status of individual was illegal and without jurisdiction and Income-tax Officer could not have validly acted on return filed by respondent pursuant to that notice, notwithstanding that it was made in status of Hindu Undivided Family, and any assessment made on such return would have been invalid. Income-tax Officer was entitled to ignore that return as non est in law. second notice issued on February 12, 1958, was valid and return filed in response to that notice and assessment thereon were valid.' [Emphasis supplied] 16. In case of B. Appaiah Naidu (supra), Their Lordships held as under:- 'Now coming to second question as noticed earlier, assessment was made in respect of income of Appaiah Naidu on his legal representative, his son Sriramamurthy, in status of individual and not as karta of his Hindu Undivided Family. department cannot now be permitted to change its case and contend that in reality assessee is Hindu Undivided Family.' 17. It is clear from above that department cannot be permitted to change status from individual to HUF. In first place, Assessing Officer had no jurisdiction to assess HUF as he did not issue any notice under section 147/148 in case of HUF. This defect of jurisdiction could not be cured by obtaining consent from assessee. Therefore, assessment has to be held to be without jurisdiction. It was rightly directed to be cancelled by ld. Accountant Member. 18. In light of above discussion on main questions, assessment cannot be sustained and has rightly been cancelled by ld. A.M. For aforesaid reasons, I agree with proposed order of ld. A.M. 19. Matter may now be placed before regular Bench for decision in accordance with law. ORDER Per A.D. Jain, Judicial Member. - In this case, learned third member has agreed with order passed by learned accountant member, whereby assessment has been cancelled. In accordace with said order passed by learned third member, assessment stands cancelled. 2. In result, appeal filed by assessee stands allowed. *** SURAJ MAL (HUF) v. INCOME TAX OFFICER