Suhas Chandra Sen, J. - (1.) The assessee prayed for reference of as many as four questions of law under Section 256(1) of the Income-tax Act, 1961, but the Tribunal has referred only two questions which are as follows : "(1) Whether, on the facts and in the circumstances of the case, Hindusthan Steel Ltd., whose liability to pay the income-tax demand raised against Mr. L. Nemethy arose not under the operation of the Income-tax Act, 1961, but by virtue of the guarantee bond dated April 25, 1969, under Section 230(1), could not be held as an assessee within the meaning of Section 2(7) of the Income-tax Act, 1961, thus being entitled to the right of appeal under Section 246 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the notice under Section 148 was not properly served and the proceedings under Section 147 of the Income-tax Act, 1961, were valid."
(2.) This question has been reframed by us and will read as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the notice under Section 148 was not properly served and the proceedings under Section 147 of the Income-tax Act, 1961, were invalid."
(3.) The facts of the case as stated by the Tribunal are as follows : One Mr. L. Nemethy was a Canadian technician who came to India on May 5, 1965, to work with Hindusthan Steel, Durgapur. His services were initially approved for a period of three years and later extended up to May 4, 1969. For the extended period, exemption was not granted but the tax was to be paid by Hindusthan Steel Ltd. at the time of departure. Hindusthan Steel Ltd. gave a guarantee that if any tax is found to be payable by Mr. Nemethy, it would be paid by them. In fact, an assessment on the income of Mr. Nemethy had been made on the basis of the return filed for the assessment year 1969-70 and the salary received up to March 31, 1969, was assessed to tax.;