9911796707
TMI Blog1972 (9) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... d been repealed in the year 1946 and that, therefore, the assessments made under the provisions of that repealed Act were without jurisdiction, (2) section 13 of the Finance Act of 1950 cannot have the effect of saving the Travancore Excess Profits Tax Act of 1120, (3) even if the Travancore Excess Profits Tax Act of 1120 can be put in force for the period anterior to 1946, the competent authorities to levy the tax are not the Union authorities but only those authorities constituted under the Travancore Act, and (4) there has been a partition between the petitioner and the other members of his family even in the year 1950 and that therefore the impugned assessments made on December 31, 1963, on the petitioner as the karta of the Hindu undivided family are not valid. The respondent is the same in all these petitions, and in the counter-affidavit filed by him he contends : (1) that the Travancore Act was not repealed with effect from 18-8-1121 as alleged by the petitioner and that it was only provided that there was to be no chargeable accounting period under the Act subsequent to 18-8-1121 ; (2) with the commencement of the Finance Act of 1950 (Central Act 25 of 1950) on April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill first take the question of maintainability of the writ petitions. It is true that the extraordinary remedy under article 226 of the Constitution of India should not normally be resorted to when there are effective statutory remedies, and this court will be reluctant to entertain a petition under the said article against an order passed under a statute and to consider questions which could be effectively raised before the authorities constituted under the same statute. But where the statutory authority has purported to act without jurisdiction or where the order impugned is a nullity, this court can grant relief to the petitioner without driving him to have a resort to the statutory remedies. In this case the petitioner has questioned the jurisdiction of the respondent to act under the provisions of the Travancore Act and the same objection could be raised by him even in respect of the appellate authorities who are acting under the provisions of the Indian Income-tax Act. Therefore, in the special circumstances of these cases, we are not inclined to reject the writ petitions on the ground that the petitioner should have resorted to the remedy by way of appeals against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt family of which the petitioner was the karta having become divided after the submission of the return, an assessment cannot be made on the joint family and that there is no provision like section 25 of the Indian Income-tax Act, 1922, in the Travancore Act, nor the provision in section 25A is attracted by section 21 of the Travancore Act. According to him unless the joint family is existing, no assessment could be made thereon and he strongly relies on the decision of this court in Commissioner of Excess Profits Tax v. Jivaraj Topun and Sons, which was a case arising under the Excess Profits Tax Act, 1940. There the assessee was a Hindu undivided family. There was a partition in the family early in October, 1941, and the partition was accepted by the income-tax authorities in March, 1943. However, a notice under section 13 of the Excess Profits Tax Act, 1940, was served on one of the erstwhile members of the family in August, 1944, to file a return of income of the family in respect of three chargeable accounting periods which ended on the date of the partition and thereafter the family was assessed to excess profits tax. That assessment was challenged on the ground that the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke section 25A of the Income-tax Act, 1922, is necessary to enable the Excess Profits Tax officer to make an assessment under the Travancore Act on the family as if no partition had taken place and calculate the amount of tax payable by the family as a unit and apportion the amount payable by the unit amongst the members of the family according to the portion of the joint family property allotted to each of them. In that case a joint Hindu family, of which the assessee was the karta, was assessed to income-tax for the year 1939-40. In the year 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. Notwithstanding that order, the Income-tax Officer, issued a notice in the name of the joint family and served it on the assessee, the erstwhile karta, under section 34 read with section 22 calling upon him to make a return in respect of the escaped income, and the assessee sent a return in response to that notice. Thereafter, the Income-tax Officer made an assessment and issued a notice of demand on the assessee and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two partners was the managing agent of a textile mill. One of the two partners issued a notice of dissolution on March 4, 1943, which the other partner was questioning. Ultimately, the matter went to court and the court fixed 10th March, 1949, as the date of dissolution. In 1951 the Excess Profits Tax Officer served a notice on the erstwhile managing partner of the firm and assessed the profits of the business of the firm for the calendar year 1942 and for a portion of the calendar year 1943, and took proceedings for recovery of the tax against him. The erstwhile managing partner contended that he could no longer represent the firm nor the other partner after the dissolution has taken place, and that, therefore, both the proceedings for assessment and recovery were not valid and that he was not an " assessee in default ". The Supreme Court upheld the assessment holding that the dissolution did not affect the validity of the assessment order passed after notice to the person in management of the business during the chargeable accounting periods as it was not the firm but the business that was the unit of assessment, that as section 21 of the Excess Profits Tax Act attracts sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability towards the excess profits tax due from the family before its disruption. The learned counsel for the revenue seeks to get over this decision in Commissioner of Income-tax v. Neekelal Jainarain on the ground that the court has proceeded on the basis that the amount of tax due under the Excess Profits Tax Act was not a debt due from a Hindu undivided family before its disruption and that the tax became due only when an assessment is made, but that basis is no longer tenable in view of the decision in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax wherein the Supreme Court has ruled that the charge under the Income-tax Act arises as soon as income is earned and that the liability to pay income-tax was a present liability though the tax became payable after an order of assessment was made and that it was not a contingent liability but a perfected debt at any rate on the last day of the accounting year. It is true, in Commissioner of Income-tax v. Neekelal Jainarain, the court proceeded on the basis that the excess profits tax is not a debt owed by the family before partition and that only a debt due by the family could be realised after its disrupti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounting period, the assessment shall be made upon them jointly and, in the case of a partnership, may be made in the partnership name. Sub-clause (4) provides that if any person who carried on the business during the chargeable accounting period had died, the assessment may be made on his legal representative. Section 21 refers to certain sections of the Travancore Income-tax Act, 1096, as being applicable to the assessment made under this Act. It is not in dispute that none of the sections referred to therein contained a power similar to the one in section 25A or section 44 of the Indian Income-tax Act. Therefore, it has to be seen whether the provisions of section 15 of the Travancore Act would enable the Excess Profits Tax Officer to treat the Hindu undivided family which carried on the business during the chargeable accounting period in question as continuing even after its disruption for the purpose of assessment. As per section 15(2) a person who carried on the business during the chargeable accounting period can be made liable to pay the excess profits tax and the word " person " under the definition includes a Hindu undivided family. But section 15(2) naturally contem ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
