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Issues Involved:
1. Whether the income of the petitioner for the assessment year 1929-30 can be said to have escaped assessment and whether Section 34 of the Indian Income Tax Act was correctly applied. 2. Whether the petitioner can be said to be the sole owner of the impartible estate, the taxable income of which has been assessed on him as an individual. 3. Whether the sum of Rs. 7,200 paid to Diwan Jai Gopal, the brother of the petitioner, as maintenance is an admissible deduction from the petitioner's income under the head of property. Detailed Analysis: 1. Escaped Assessment and Application of Section 34: Section 34 of the Indian Income Tax Act states that if income, profits, or gains chargeable to income-tax have escaped assessment, the Income-Tax Officer may serve a notice within one year of the end of that year to assess or reassess such income. In this case, the assessment for the year 1929-30 was sought to be made, and notice was served on March 16, 1931. The court concluded that the income cannot be said to have escaped assessment as it was disclosed and known to the Income-tax authorities. The assessment was initially made and later set aside due to procedural mistakes or wrong categorization. Therefore, the term 'escape' does not apply here as it implies failure by the taxing authority due to omission by the assessee or similar circumstances. The court held that the notice under Section 34 was not validly served, and the assessment was consequently illegal. 2. Ownership of the Impartible Estate: The court examined whether the petitioner could be considered the sole owner of the impartible estate, which was assessed as his individual income. The court referred to several precedents, including the Full Bench decision in Hart Kishen v. Chandu Lal, which held that the Mitakshara system of Hindu Law, allowing sons to enforce partition during their father's lifetime, does not apply in Punjab. The court also cited Naraganti Achammagaru v. Venkatachalapathi Nayanivaru, which stated that an impartible estate, though possessed by one member, is joint property of the family and passes by survivorship. The court concluded that the impartible estate is joint property of the family, and the petitioner cannot be considered the sole owner. Therefore, the assessment should be on the family as an undivided Hindu family, not on the petitioner as an individual. 3. Deduction of Maintenance Allowance: The court addressed whether the Rs. 7,200 paid to Diwan Jai Gopal as maintenance should be deducted from the petitioner's income. The court noted that this allowance was not voluntary and did not vary with the estate's income. It was a fixed amount that the petitioner was obligated to pay, irrespective of the estate's income. The court concluded that the Rs. 7,200 is not the income of the petitioner but the income of Diwan Jai Gopal, who is separately assessed for it. The court emphasized that the payment was not made to a coparcener but to a brother who is not part of the joint Hindu family. Therefore, the allowance should be deducted from the petitioner's income, as it is not part of his taxable income. Conclusion: The court answered the first question in the negative, indicating that the income did not escape assessment and Section 34 was not correctly applied. The second question was also answered in the negative, stating that the petitioner is not the sole owner of the impartible estate. The third question was answered in the affirmative, allowing the deduction of the Rs. 7,200 maintenance allowance from the petitioner's income.
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