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TMI Blog1947 (4) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... t be included in the assessment as he, and therefore the family, was not ordinarily resident. The contention, though rejected by the Income-tax Officer, was upheld on appeal by the Appellate Assistant Commissioner as a result of which a fresh assessment was made on the 23rd August, 1940, excluding the foreign income. In the assessment proceedings for the succeeding year 1940-41 the assessee put forward the claim that a partition having taken place among the members of the family no assessment on the family as such should be made for that year. This claim was rejected by the Income-tax Officer on the 23rd December, 1941, but the assessee again succeeded before the Appellate Assistant Commissioner who by his order dated the 17th August, 1942, accepted the partition put forward and directed an assessment to be made on that basis. Meanwhile the Income-tax Officer having come into possession of materials showing that the family was ordinarily resident in British India in the year 1938-39 issued a notice dated the 6th July, 1942, under Section 34 of the Act addressed to K.M.N.N. Swaminathan Chettiar, Sembanur stating inter alia, that your income for the year ending 31st Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1941-42 dated 17th August, 1942, and that the proceedings under Section 34 were initiated when of course the family has ceased to exist. But he held that the provisions of Section 25A were specially intended for making an assessment on a family after it had ceased to exist. He accordingly dismissed the appeal. The assessee appealed to the Income-tax Appellate Tribunal, which, however, allowed the appeal, holding that Section 25A was inapplicable to the case and also that no valid notice under Section 34 was served on the Hindu undivided family as the notice served on the assessee did not indicate whether it was proposed to assess him as karta of the family or in his individual capacity. Thereupon the Commissioner of Income-tax, Madras, applied to the Appellate Tribunal under Section 66(1) to refer the questions of law arising out of its order to this Court, and the Tribunal has accordingly referred the following question for our decision:- Whether in the circumstances of the case, a notice for re-assessment of a Hindu undivided family under Section 34 of the Income-tax Act is valid on a member of the family, who was the karta, after the family had partitioned and disr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers and groups of members in accordance with the provisions of Section 23: Provided 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. (3) Where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family. Section 34- If in consequence of definite information which has come into his possession the Income-tax Officer discovers that income, profits or gains chargeable to income-tax have escaped assessment in any year, or have been under-assessed, or have been assessed at too low a rate, or have been the subject of excessive relief under this Act the Income-tax Officer may, in any case in which he has reason to believe that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars thereof, at any time within eight years, and in any other case at any time within four years, of the end of that year, serve on the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly as if the notice were a notice issued under that sub-section , are apt to attract the provisions of Section 25A to assessments made under Section 34. Mr. Viswanatha Ayyar argued on behalf of the assessee that Section 25A could have no application to this case as it contemplated only cases where at the time of making an assessment under Section 23 a claim is put forward that a partition has taken place among the members of such family, whereas not only was the assessment now in question made under Section 34, but when the family was originally assessed under Section 23 on the 30th November, 1939, no claim was made or indeed could be made that a partition had taken place, as the partition in the family was only in January, 1940. This contention found favour with the Income-tax Appellate Tribunal which observed:- For the year of assessment in question, i.e., 1939-40, it is nobody's case that any claim under Section 25A was made by any member of the Hindu undivided family. That being so we do not think that Section 25A has any application to this case. On the other hand, Mr. Rama Rao Saheb for the Commissioner suggested that sub-section (3) of Section 25A could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d inapplicable, either because of its opening words referring to an assessment under Section 23, or because no claim as to a partition having taken place was put forward at the time of the original assessment on the family for 1939-40, to the assessment now made under Section 34. By virtue of the concluding words of sub-section (1) of the latter Section 34 making all the provisions of the Act, so far as may be, applicable to supplementary assessments under that section these assessments also have to be made under and in accordance with Section 23. In the course of such an assessment proceeding in the present case, a claim that a partition had taken place was put forward, though for the first time before the Appellate Assistant Commissioner who, instead of making a further enquiry into the matter accepted and acted upon the order of the 17th August, 1942, recording the partition in the assessment proceedings for 1940-41. The Appellate Assistant Commissioner in his order dated 11th February, 1943, has made it quite clear that he sustained the assessment under sub-section (2) of Section 25A read with Section 34 on the footing that the family had been disrupted on the 21st January, 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until the matter reached the Income-tax Appellate Tribunal, as to any irregularity in the issue of the notice. As has been already stated, even on the footing that the family had become disrupted in January, 1940, the service of notice under Section 34 on the assessee was perfectly in order as he was a person liable to pay the whole of the tax imposed under the supplementary assessment. In such circumstances, I see no substance in the objection that the notice of the 6th July, 1942, was not valid notice under Section 34. Even assuming that the notice did not give the correct particulars as to the person or to the income sought to be assessed the irregularity must, in the circumstances of this case, be deemed to have been waived by the assessee. In a similar case in Gopaldas Purushottam Das v. Commissioner of Income-tax [1941] 9 I.T.R. 130; I.L.R. 1940 All. 841, where the assessee was served with a notice under Section 22(2) of the Act which did not specify in what capacity he was called upon to make a return but he made a return as the manager of the family without asking for an elucidation from the Income-tax authorities, it was held that the assessee could not afterwards obj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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