V. K. GUPTA, J. ( 1 ) THE question involved in this petition is about the liability of the petitioner to file Income Tax Return for the assessment year 1977-78. ( 2 ) M/s. Poddar Udyog Limited, the present petitioner in this petition, has actually succeeded M/s. Hope India Limited, the petitioner who originally had filed this petition. M/s. Hope India Limited was the successor in interest of M/s. Hope Plantations Limited. M/s. Hope Plantations Limited by virtue of an agreement made on 22nd November, 1977 between itself and the Southern Indian Tea Estates Company, a company incorporated under the Companies Act of the United Kingdom and having its registered office in London, purchased the Indian tea business of M/s. Southern India Tea Estates Company limited (hereinafter referred to as the predecessor company ). M/s. Hope Plantation Company (hereinafter referred to as the successor company) was incorporated as an Indian Company on 11th November, 1977. On 7th January, 1978, M/s. Hope Plantation Limited stood amalgamated with M/s. Hope India Limited with effect from 19th September, 1979. ( 3 ) A notice dated 25th February, 1980 under section 148 of the Income Tax Act was served upon M/s. Hope Plantations Limited in which the Inspecting Assistant Commissioner of Income Tax called upon the addressee to file return within 30 days from the date of service of the notice since the Inspecting Assistant Commissioner had proposed to assess the income of the said addressee for the assessment year 1977-78. It is advantageous to set out the notice entirely as hereunder:"notice under section 148 of the income tax Act 1961. 47-024-Cx-5210 Income Tax Officer, Special Range, coimbatore. Dated the 25-2-1980. M/s. Hope Plantations Ltd. , successor to (M/s. Southern India Tea Estate Co. Ltd.)belmont, Coonoor-643 101. Whereas I have reason to believe that your income in respect of which you are assessable/chargeable to tax for the assessment year 1977/78 has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. I, therefore, propose to assess the Income/loss depreciation allowance/for the said assessment year and I hereby require you to deliver to me within 30 days from the date of service of this notice, a return in the prescribed form to your income, the income in respect of which you are assessable for the said assessment year. Sd/ inspecting Assistant Commissioner of Income-tax, special Range, Coimbatore. Sd/ inspecting Assistant Commissioner of Income-tax, special Range, Coimbatore. " ( 4 ) THE addressee M/s. Hope Plantations Ltd. replied to this notice by contending that it was not liable to file return for the assessment year 1977-78 since their company was incorporated only on 11th November, 1977 and the first accounts of the company were prepared from 11th November, 1977 to 6th January, 1978. However, correspondence between the parties continued. Ultimately at a point of time, it also appeared that the Inspecting Assistant Commissioner had issued a notice on 4th November, 1981 to the M/s. Southern India Tea Estates Company. Thereafter through their agent and attorney in India and vide their communication dated 11th November, 1981 it replied that the said company had ceased to have any activity in India because of its having been taken over by M/s. Hope Plantations Limited. They also stated in their communication that they do not have any connection with the Southern India Tea Estates Company Limited and the notice under section 148 of the Income Tax Act was accordingly returned. ( 5 ) SECTION 170 of the Income Tax Act which deals with the liabilities of the successors and the predecessors with respect to assessment of income in a case where a person carrying on business or profession has been succeeded therein by any other person. Clause (a) of sub-section (1) stipulates of the predecessors liability to be assessed in respect of his income for the previous year in which the said succession took place upto the date of succession whereas sub clause (b) of sub-section (1) states that the successor shall be assessed in respect of income of the previous year after the date of succession. Sub-section (1) of section 170 actually deals with the normal method of assessment, relatable to the date of succession of the business or profession. However, sub-section (2) deals with the situation where the predecessor cannot be found and in that eventuality, it provides that the assessment of the income of the previous year in which the succession took place upto the date of succession and of the previous year preceding that year shall be made on the successor in the like manner and to the same extent as it would have been made on the predecessor. The question which requires for consideration in this petition is about the liability of the petitioner to file return for the assessment year 1977-78. ( 6 ) THE expression used in sub-section (2) of section 170 "when the predecessor cannot be found" clearly suggests that it is the duty of the Assessing officer to locate the predecessor and issue notice to him if any assessment is called for any particular assessment year. It is only after repeated attempts and efforts that the predecessor is not found or cannot be found that the assessing officer has to satisfy itself that because of its inability to find the predecessor, the provision of sub-section (2) of section 170 shall come into play and thereafter the liability of the successor to face assessment in place of the predecessor shall accrue. I have clearly gone through the records of this case and found that no efforts whatsoever appear to have been made by the respondent to even issue a notice upon the predecessor at its London office since the predecessor is stated to be a company incorporated under the Companies Act of United Kingdom. For fastening the liability upon the petitioner for the assessment year 1977-78, it was incumbent upon the respondents first to have ensured that the notices were issued upon the predecessor company and only after the respondents had satisfied themselves that the predecessor company could not be found out, that the liability could then be fastened upon the petitioner. The satisfaction under section 170 (2) of the Income Tax Act was a sine qua non for fastening any liability upon the petitioner. Nothing of this sort was done in this case. As has been noticed above, the petitioner came to be incorporated as a company on 11th November, 1977, the liability of Income tax for any period prior to that could not be fastened upon the petitioner, except under the circumstances mentioned in section 170 (2) of the Act. The procedure prescribed therein not having been followed, the substantive rights of the petitioner could not be taken away. ( 7 ) IT is only after the Assessing Officer records a finding based upon its satisfaction that the predecessor cannot be found, it may be open to it to take recourse to sub-section (2) of section 170 of the Act. The procedure prescribed therein not having been followed, the substantive rights of the petitioner could not be taken away. ( 7 ) IT is only after the Assessing Officer records a finding based upon its satisfaction that the predecessor cannot be found, it may be open to it to take recourse to sub-section (2) of section 170 of the Act. Unless that finding is recorded, proceedings against the petitioner are not maintainable and asking it to file return for the assessment year 1977-78 is not permissible. ( 8 ) FOR the aforesaid reasons, therefore, this petition is allowed. The impugned notice calling upon the petitioner to file return for the assessment year 1977-78 is quashed and set aside. ( 9 ) IF any order was passed pursuant to the aforesaid notice, that also would automatically stand quashed and set aside. In the light of the observations made above, it is however made clear that the respondents shall be at liberty to proceed in the matter in accordance with section 170 (2) of the Act and ultimately if the appropriate authority comes to a conclusion and records a finding that the predecessor company cannot be found, it shall be open to it to proceed against the petitioner in accordance with law. No order is made as to costs. Petition allowed.