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Issues Involved:
1. Status of the assessee as an association of persons or a Hindu undivided family. 2. Validity of the assessment order. 3. Jurisdiction of the Commissioner to exercise suo motu revisional power. Detailed Analysis: 1. Status of the Assessee: The primary issue was whether the assessee, a coffee planter, should be assessed as an association of persons or as a Hindu undivided family (HUF). The assessee filed a return for the assessment year 1976-77, disclosing the status as an association of persons. The family had entered into an agreement on April 2, 1975, severing their status as members of the HUF and declaring themselves as equal sharers in the joint properties. The assessing authority did not accept this claim and treated the return as filed by the karta of an HUF. The appellate authority, however, accepted the assessee's claim, directing that the assessment be concluded against the assessee and other family members as tenants-in-common. 2. Validity of the Assessment Order: The Commissioner of Agricultural Income-tax, Karnataka, considered the appellate order erroneous and prejudicial to the Revenue, invoking his suo motu revision powers under section 36 of the Act. He issued a show cause notice to the assessee, arguing that there was a violation of the mandatory requirement of sub-sections (1) and (2) of section 30 of the Act, resulting in a presumption that the family continued to be joint in status. The assessee contended that the appellate authority's decision was correct, relying on the decision of the Allahabad High Court in CIT v. Purushottam Das Rais [1966] 61 ITR 86, which held that section 30(3) was not attracted. 3. Jurisdiction of the Commissioner: The court examined whether the Commissioner had the jurisdiction to exercise his suo motu revisional power. It was argued that the return was filed by the eldest member of the family, who was a signatory to the agreement, showing the status of the family as an association of persons. The court noted that the agreement dated April 2, 1975, evidenced the disruption of the HUF status. The court also observed that the Act or the Rules do not provide a specific procedure for the enquiry to be held by the Agricultural Income-tax Officer under sub-section (1) of section 30 of the Act. As long as the officer looked into the deed of partition and recorded a finding, that investigation would constitute the enquiry contemplated under the Act. Conclusion: The court held that the Commissioner had no jurisdiction to exercise his suo motu revisional power as there was no error of law in the appellate order. The court allowed the revision petition, set aside the order of the Commissioner, and restored that of the appellate authority. The court emphasized that the enquiry conducted by the Agricultural Income-tax Officer, even if informal, was sufficient and that the agreement among family members was valid and evidenced the disruption of the HUF status. The court also noted that there was no need for issuance of a notice to all family members if the return was filed by a joint owner acting for all.
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