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TMI Blog1953 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... f winch, Ma-noharial Bakrewalla, his wife Ganga Devi his five sons, three of whom were minors, agreed to partition the Hindu undivided family and transfer assets, liabilities etc. to a public limited company called 'Gulabrai Manoharlal Co. Ltd.' which had been incorporated on 29-3-1943. A memorandum was subsequently executed on 6-5-1943 between the members of the assessee family as vendors and the limited company as vendee. In consideration of ₹ 5,00,000 worth of shares distributed in 5000 shares to Manoharlal and his family members out of total capital of ₹ 11,00,000 the company took over the assets and liabilities on 1-6-1943. The final memorandum of agreement is dated 21-5-1943. On a claim being made under Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Order the Income-tax Officer had said that the tax will be realised from six separate members according to their shares. Nevertheless it was urged on behalf of the assessee that the proceedings before the Income-tax Officer were without jurisdiction since Income-tax Officer purported to assess the un-divided Hindu family of Gulabrai Manoharlal which had ceased to exist. The whole argument is based on Section 25A, Income-tax Act. Section 25A (1) states : Where at the time of making an assessment under Section 23, it is claimed by or on behalf of any member of a Hindu family hitherto assessed as undivided that a partition has taken place, among the members of such family, the Income-tax Officer shall make such inquiry thereinto as he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e joint family as such . 4. The contention of the learned counsel on behalf of the assessee is that under Section 25A the notice of assessment should have gone not to the karta of the undivided Hindu family but to the separated members. It was submitted that the Income-tax Officer had no jurisdiction to start assessment proceedings against undivided Hindu family of Gulabrai Manoharlal which had ceased to exist. In our opinion the argument of the learned counsel is not correct. On a true construction of Section 25A it is clear enough that the Income-tax Officer in the first place has to make assessment of the total income of the joint family as if no partition had taken place. It is not necessary that the proceedings for assessment under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In the third place, there is a proviso to Section 25A(2) which states that all the members and groups of members whose joint family property has been partitioned shall be liable jointly and severally for the tax assessed on the total income received by or on behalf of the joint family as such. In view of all these considerations it is obvious that the proceedings under Section 25A were properly initiated in the present case by the issue of a notice against the karta of the joint family. The position is as if the taxing authorities are making assessment of the income of a Hindu undivided family as such. It was contended by the learned counsel on behalf of the assessee that the notice of the proceedings should have been given to each an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indu undivided family for the years 1945-44 and 1944-45 under Section 25A(2), Income-tax Act. The view we have taken of the interpretation of Section 25A is supported by the decision of the Supreme Court in -- 'Lakshminarain Bhadani v. Commr. of Income-tax, B O', AIR 1953 SC 429 (A), in which a joint Hindu family, of which the appellant was karta, was assessed to Income-tax for the year 1939-40. In 1944 the Income-tax Officer considered that certain income of the family taxable in 1939-40 had escaped assessment. In the meanwhile, the family had become divided and an order had been passed under Section 25A(1) of the Act. The Income-tax Officer issued a notice in the name of the joint Hindu family and served it on the appellant unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be made. For this contention he relies on the wording of Section 25A(1). In our opinion, this contention is unsound and the opinion of the High Court that the proceedings were initiated irregularly is also unsound. It does not appear necessary, when proceedings are initiated under Section 34 read with Section 22, Income-tax Act, to issue notice to every member of the family. The position is as if the Income-tax Officer was proceeding to assess the income of the Hindu undivided family as in 1939-40. In our opinion therefore, that contention must be rejected. 5. Our view is also supported by the decision of the Madras High Court reported in -- 'Commr. of Income-tax, Madras v. Swaminathan', AIR 1948 Mad 164 (B). It was held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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