1972 (8) TMI 14 - HC - Income Tax

Assessee initially filed his returns as an individual - later, he filed two returns as individuals and HUF - Tribunal was not right in cancelling the order of assessment

Summary

Issues:
Assessment of income in the status of an individual versus a Hindu undivided family, validity of the Tribunal's cancellation of the assessment order, interpretation of whether the return filed in the status of a Hindu undivided family was virtually disposed of, application of the rule of implication in assessing income.

Analysis:
The case involved a dispute regarding the assessment of income by the Income-tax Officer in the status of an individual versus a Hindu undivided family. The assessee, Shri B. P. Tandon, initially filed returns for two assessment years, one as an individual and the other as the karta of a Hindu undivided family. The Income-tax Officer assessed the entire income in the status of an individual, leading to appeals and subsequent decisions by the Appellate Assistant Commissioner and the Tribunal.

The Tribunal held that certain income belonged to the Hindu undivided family and not the individual. Subsequently, the Income-tax Officer passed an order on the return filed in the status of a Hindu undivided family. The Tribunal, following a previous decision, determined that the return was virtually disposed of and not pending, hence the Income-tax Officer could not make any assessment based on it.

The court analyzed the facts and previous decisions, emphasizing that in this case, it was not necessary for the Income-tax Officer to refer to the return filed in the status of a Hindu undivided family as the entire income was disclosed in the individual return initially filed. The court rejected the argument that the return in the status of a Hindu undivided family was impliedly disposed of by the Income-tax Officer.

The court distinguished this case from a previous judgment where two separate returns were filed, leading to a different outcome. The court declined to delve into the broader question of applying the rule of implication in such cases, focusing solely on the specific circumstances of this case.

Ultimately, the court answered the referred question in the negative, stating that the Tribunal was not justified in canceling the assessment order. The department was awarded costs, and the counsel's fee was also assessed accordingly.

In conclusion, the judgment clarified the assessment of income in different statuses, the implications of filing separate returns, and the application of the rule of implication in tax assessments, providing a detailed analysis of the specific facts and legal principles involved in the case.