9911796707
TMI Blog1968 (8) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... n under section 28 of the Act, levied varied amounts of penalty for the irregularities mentioned above on September 27, 1958, and March 31, 1959, under sections 28(1)(b) and 28(1)(c). It may be noted, however, that the applicant contended that the levy of penalty was not justified and for the first time also contended before the Appellate Assistant Commissioner that during the assessment years in question the applicant was wrongly assessed in the status of an individual and that he ought to have been assessed in the status of a Hindu undivided family, and since the Hindu undivided family became disrupted in 1956, the levy of penalty on the Hindu undivided family after its disruption was illegal and even the initiation and the conclusion of the proceedings against the applicant as an individual and as if he was liable to pay the penalty would equally be illegal. The applicant relied upon an order of the Income-tax Officer dated December 30, 1961, under section 25A, by which the revenue was satisfied that there has been a complete partition in the family with effect from April 23, 1956. While passing the order under section 25A, the Income-tax Officer was satisfied that there was evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax, that the taxing officers had no jurisdiction to levy of penalty. The argument proceeds that the order under section 25A(1) of the Act irretrievably recognises a Hindu undivided family until April 23, 1956, and thereafter " the person " of a Hindu undivided family being absent no proceedings to impose penalty can be initiated or penalty levied in consequence thereof on such a non-existing person. The fact that, during the assessment years in question, the applicant purported to submit returns as an individual or the consequential assessments made on him during the material period as an individual would not make any difference, if, as a matter of fact, there is no dispute that the assessments should have been made in those years on the Hindu undivided family and not on the individual as such. Mr. K. Srinivasan refers to the order made under section 25A(1) wherein it is stated that the assessee has produced evidence to show that the house properties and the business built up by the applicant have come out of family nucleus. Strong reliance is placed on the remand report of the Income-tax Officer dated March 11, 1961, to support the argument that the income assessed in the ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o mean otherwise, would lead to anomalous results. The order under section 25A(1), which is necessarily based on a deed of partition and the evidence adduced in support thereof, is bound to be on a date later than the partition deed. Once the order is recorded, it is indisputable that the revenue recognises that, prior to the date of partition, there was a Hindu undivided family and, after the partition it ceased to exist. In this case, the order under section 25A(1) was passed on December 30, 1961, recording a partition on April 23, 1956. It follows that the family of which the applicant was a member was a Hindu undivided family till April 23, 1956. The assessments made on the applicant during the relevant years as an individual is distinct and separate and is not relatable or referable to the Hindu undivided family of which he was a member. Admittedly, he was not assessed as a karta of the family, nor did he represent himself as such. No doubt, it appears strange, in the peculiar circumstances of this case, as to how an order under section 25A(1) was recorded at all. But having been so recorded, it has to be fully implemented. Therefore, his conduct, however contumacious it may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty or sustain it. The orders for imposing penalty under section 28(1)(b) for the years 1949-50 and 1954-55 were made on September 27, 1958, and March 31, 1959, respectively. So also the orders under section 28(1)(c) for the years 1951-52 and 1953-54 were made on September 27, 1958, and March 31, 1959, respectively. By then the family became divided, because the deed of partition was on April 23, 1956. While canvassing the propriety of the levy of penalties as above, the applicant raised before the revenue that he was wrongly describing himself as assessee and that the income ought to have been assessed as on a Hindu undivided family. As already stated, this was enquired into and found in favour of the assessee resulting in the order under section 25A(1). After such a decision on status it is highly irregular to levy and sustain the penalty as an individual, on the only ground that the applicant's behaviour is blameworthy and indeed has no moral basis. In a tax law, morality has no place and it is the strict rule of fiscal law that has to prevail. In our view,, even, though the applicant has given the go-by to the voluntary state of affairs as maintained by him prior to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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