1971 (7) TMI 38 - HC - Income Tax

Application for the issue of a writ of certiorari to quash the order of the Tax Recovery Officer - if any member of a Hindu family which was assessed as an undivided family makes a claim of partition, that claim must be inquired into after giving notice to the other members - When no notice is given to the other members after claim of partition is made, the assessment of the Hindu undivided family would be void held that petitioner is not liable to pay any tax due in pursuance of an assessment order - writ petition is allowed in part

Issues Involved:

1. Validity of the assessment order for the year 1963-64 post-partition.
2. Compliance with Section 171 of the Income-tax Act, 1961.
3. Locus standi of the petitioner to file the claim petition and writ petition.
4. Legality of the attachment of properties for tax recovery.

Issue-wise Detailed Analysis:

1. Validity of the assessment order for the year 1963-64 post-partition:

The principal contention raised by the petitioner was that the assessment order for the year 1963-64 was void because it was made without considering the partition claim. The petitioner argued that the assessment order passed without issuing notices to the family members and without holding any inquiry into the partition claim was void. The court clarified that for the years 1961-62 and 1962-63, no arguments were addressed as the family continued to be joint until the partition deed dated September 2, 1962. Therefore, the petitioner was liable for the pre-partition debt, including the tax amount. The issue was only relevant for the part of the accounting year 1963-64 after September 2, 1962.

2. Compliance with Section 171 of the Income-tax Act, 1961:

Section 171 deals with the assessment after the partition of a Hindu undivided family. The court emphasized that if a claim of partition is made, the Income-tax Officer must give notice to all family members, hold an inquiry, and record a finding. The section mandates that the assessment order must be made in accordance with the inquiry's findings. If the Income-tax Officer fails to follow this procedure, the assessment order would be inconsistent with Section 171 and, therefore, illegal. The court concluded that the assessment order for the year 1963-64 made without complying with the mandatory requirements of Section 171 was void.

3. Locus standi of the petitioner to file the claim petition and writ petition:

The petitioner's locus standi was challenged on the ground that he had transferred the land in question by way of a gift to his minor son on the date of the partition. The court held that while the petitioner may not be permitted to question the validity of the attachment of the land gifted to his son, he had the necessary locus standi to file the writ petition under Article 226 of the Constitution to question his liability based on the assessment made in contravention of Section 171.

4. Legality of the attachment of properties for tax recovery:

The court noted that the Tax Recovery Officer attached several properties, including a wet land of 3 acres and 70 cents, to recover the tax amount due. The petitioner claimed that these properties could not be attached as they fell to his share under a registered partition deed dated September 2, 1962. The court held that the petitioner was liable for the tax dues for the years 1961-62 and 1962-63 and a part of 1963-64 before the partition date. However, for the part of the year 1963-64 after the partition, the petitioner was not liable. Since the petitioner had gifted the land to his son, he could not prefer the claim, nor did he have any interest in questioning the attachment in the writ petition.

Conclusion:

The court allowed the writ petition in part, declaring that the petitioner was not liable for the tax due for the part of the year 1963-64 after September 2, 1962. However, the writ petition was dismissed regarding other reliefs claimed. The impugned order by the Tax Recovery Officer was not quashed, and the parties were directed to bear their own costs.

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