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Issues Involved:
1. Applicability of Section 25A to assessments made under Section 34 after the partition of a Hindu undivided family. 2. Validity of the notice issued under Section 34 without indicating the capacity in which the assessee was to be assessed. Issue-Wise Detailed Analysis: 1. Applicability of Section 25A to Assessments Made Under Section 34: The core issue was whether Section 25A of the Indian Income-tax Act, 1922, applied to assessments made under Section 34 concerning income received by a Hindu undivided family (HUF) in 1938-39 after the family had partitioned on January 21, 1940. The assessee contended that since the family had ceased to exist at the time of the notice under Section 34, the assessment was not legally sustainable. The Income-tax Officer initially did not consider the partition and assessed the family as "resident and ordinarily resident," computing the tax accordingly. The court noted that Section 25A addresses the difficulty of assessing a family that received income in the year of account but ceased to exist at the time of assessment. It provides that if the family property was partitioned, the assessment should be made as if no partition had occurred, with all members jointly and severally liable for the tax. If no partition occurred, the family is deemed to continue for assessment purposes. The court held that the concluding words of Section 34(1) ("the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section") attract the provisions of Section 25A to assessments under Section 34. This means that the family should be assessed as if it were still in existence, even if it had partitioned before the assessment. The court rejected the assessee's argument that Section 25A was inapplicable because the assessment was made under Section 34 and not Section 23. It emphasized that by virtue of Section 34, the provisions of the Act, including Section 25A, apply to supplementary assessments. The court concluded that the assessment was correctly sustained under Section 25A(2) read with Section 34, even though the family had partitioned. 2. Validity of the Notice Issued Under Section 34: The second issue was whether the notice issued under Section 34 was valid, given that it did not specify whether the assessee was being assessed in his individual capacity or as the karta of the HUF. The assessee understood the notice as relating to the family income and submitted a return accordingly. The court found that the service of notice on the assessee was valid, as he was a "person liable to pay" the tax, even if the family had partitioned. The court cited precedents, including Gopaldas Purushottam Das v. Commissioner of Income-tax and Maharaja of Patiala v. Commissioner of Income-tax, to support the view that any irregularity in the notice must be deemed waived if the assessee did not object at the time and understood the notice's intent. The court held that the notice was valid and any irregularity was waived by the assessee's actions. Conclusion: The court answered the reference in the affirmative, concluding that: 1. Section 25A is applicable to assessments made under Section 34 concerning income received by the undivided family before its partition. 2. The notice issued under Section 34 was valid despite not specifying the capacity in which the assessee was to be assessed. The assessee was ordered to pay the costs of the Commissioner, amounting to Rs. 250.
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