1984 (6) TMI 9 - HC - Income Tax

Summary

Issues Involved:
1. Applicability of the Travancore-Cochin Agricultural Income-tax Act, 1950, post-repeal.
2. Status of petitioners for assessment purposes: tenants-in-common or members of a Hindu undivided family.

Detailed Analysis:

1. Applicability of the Travancore-Cochin Agricultural Income-tax Act, 1950, Post-Repeal:
The petitioners contended that the suo motu revisional proceedings under section 34 of the Travancore-Cochin Agricultural Income-tax Act, 1950, were not sustainable because the Act had been repealed by the Tamil Nadu Act 18 of 1972, effective from April 1, 1972. They argued that the Tamil Nadu Act, which limits suo motu proceedings to three years from the date of the assessment orders, should apply.

The Commissioner of Agricultural Income-tax rejected this contention, stating that the show-cause notice for the assessment years 1970-71 and 1971-72 was issued under the Travancore-Cochin Agricultural Income-tax Act, 1950, and that the provisions of this Act applied for subsequent actions. The Commissioner emphasized that assessments under the Travancore-Cochin Act are final, subject to revision under the same Act, and that there is no time-limit for suo motu actions under section 34 of the Travancore-Cochin Act, as the Act's operation is continued by the saving provision in section 9(1) of the Tamil Nadu Act.

The court upheld the Commissioner's view, citing section 9(1)(d) of the Tamil Nadu Act, which preserves the operation of the Travancore-Cochin Act for proceedings initiated under it, allowing for suo motu revision without a time limit. The court referenced similar precedents, including the Supreme Court's decision in Swastik Oil Mills Ltd. v. H. B. Munshi, which supported the continuation of the repealed Act's provisions for specific purposes.

2. Status of Petitioners for Assessment Purposes:
The petitioners claimed they should be assessed as tenants-in-common, as accepted by the Agricultural Income-tax Officer for the assessment years 1970-71 and 1971-72. They argued that their status as tenants-in-common had been recognized based on their returns and that this status could not be altered to a Hindu undivided family (HUF).

The Commissioner, however, held that the properties in question were ancestral and belonged to a joint family. He initiated suo motu revisional proceedings to assess the eldest brother as representing the HUF, stating that the properties had always been joint family properties.

The court agreed with the Commissioner, stating that the properties were ancestral and continued to be so in the hands of the petitioners after their father's death. The court noted that there had been no partition among the brothers, and the properties were held and enjoyed in common. The mere division of income did not suffice to treat them as divided members of an HUF without an actual partition by metes and bounds. Therefore, the assessment should be in the name of the eldest brother as representing the HUF.

Conclusion:
The court dismissed the tax cases, affirming the Commissioner's order to assess the properties as belonging to a Hindu undivided family and upholding the applicability of the Travancore-Cochin Agricultural Income-tax Act, 1950, for suo motu revision without a time limit. There was no order as to costs.