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TMI Blog1950 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... sisting of the erstwhile coparceners of the Hindu undivided family. The assessee relying on Section 25(4) of the Indian Income-tax Act claimed that its income of S.Y. 2000 might be exempted. It is not clear from the record when exactly that claim was made. The Income-tax authorities dealing with Section 25(4), Indian Income- tax Act, take the view that the first relief admissible to an assessee under Section 25(4) must be granted as a matter of course even if no application on this behalf is made, but in regard to the second relief under the same section an application has to be made within one year from the date on which succession to the business takes place. It is in the light of this background that the Income-tax Officer disallowed the so called claim for the first relief under Section 25(4) and inasmuch as no application for the second relief was made within the period of one year, no relief was granted under the latter part of Section 25(4) of the Act. This is what the Income-tax Officer wrote:- It is claimed that the assessee paid tax under the Act of 1918 and the Hindu undivided family business having been succeeded to by Ambaram Kalidas and his sons as from Kart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tail while dismissing the appeal. The Tribunal's order runs as follows:- Section 25(4) of the Indian Income-tax Act contemplates two reliefs. Section 25(5) provides that no claim to the relief afforded under sub-section (4) shall be entertained unless it is made before the expiry of one year from the date on which the succession took place. It appears that no request either oral or written was made to the Income- tax Officer for relief under Section 25(4) within the time limit provided by Section 25(5). The interpretation put upon Section 25(4) by the Income-tax authorities is, in our opinion, correct. The result is that the appeal fails and is dismissed. The questions of law that arise are:- (i) What income is exempt under Section 25(4) and whether any application is required to be made in respect of this exemption and if so, whether that application is governed by the period of limitation referred to in Section 25(5) of the Act? (ii) Whether an application is required to be made in respect of the second part of Section 25(4) and if so whether that application is governed by the period of limitation referred to in Section 25(5) of the Act? Sir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an end, in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession; and the second relief to which such person is entitled is that he may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period. Now, dealing with the first relief, the relief in this case to which the joint Hindu family would be entitled is that it will not be liable to pay any tax in respect of the income, profits and gains of a period which consists of the end of the previous year and the date of succession. Looking to the plain language of the section, it is clear that this relief has to be claimed by the assessee in the year of assessment in which the succession took place, and the nature of the relief is that he is not entitled to pay tax on that particular specific period which is made up of the last date of the previous year and the date of succession. Therefore, what we have to ascertain in this case is, what was the date of succession, because it is in relation to the date of succession that the relief has to be computed. The period may be any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the first part of Section 25(4). Section 25(5) provides that no claim to the relief afforded under sub- section (3) or (4) shall be entertained unless it is made before the expiry of one year from the date on which the business, profession or vocation was discontinued or the succession took place as the case may be. It is not disputed that if sub-section (5) applies to the relief to which the assessee is entitled under the first part of sub-section (4), then his application would be barred. But the question is whether any application at all is necessary on the part of the assessee before he would be entitled to any relief under sub-section (4). When one looks at the language of sub-section (4), a clear distinction has been made by the Legislature between the first part and the second part. In the first part it is provided that no tax shall be payable in respect of the period to which I have already referred in the earlier part of the judgment. With regard to the second part it is provided that such person may further claim the relief which is set out in that part of the sub-section. Therefore, whereas with regard to the first relief the Department is enjoined not to impose a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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