9911796707
TMI Blog1951 (3) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... tiated under the Excess Profits Tax Act against the Hindu undivided family by issuing notice on 8th August, 1944, on a member of the disrupted family and assessing the family's income to excess profits tax thereon-partition and disruption having been accepted by the department on 18th March, 1943-was valid in law ?" The assessee is a Hindu undivided family, viz., Messrs. Jivaraj Topun and Sons, Madras. The chargeable accounting periods with which we are concerned in this reference are (1) from 1st September, 1939, to 11th November, 1939 ; (2) from 12th November, 1939, to 30th October, 1940; and (3) from 31st October, 1940, to 4th October, 1941. A notice under Section 13 of the Excess Profits Tax Act was served on Tricumdas Jamnada ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the date of the notice. Hence this reference. Mr. Rama Rao Sahib, the learned counsel for the Excess Profits Tax Commissioner, argued that the scheme of the Excess Profits Tax Act is that it is the business that is treated as assessable to tax and as there is no time limit within which an assessment could be made Under the Excess Profits Tax Act, unlike the Income-tax Act, even if the business had ceased, as there was a partition between the members of an undivided family, it was open to the authorities to assess the profits of that business under the Act by serving a notice on any member of the family to which the business once belonged. He drew our attention to the several provisions of the Act in support of his contention. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same manner as under the Indian Income-tax Act. No doubt Section 8 which provides for successions and amalgamations does not very much help us to decide the point, as it provides only for the manner of computing the standard profits in the cases of successions and amalgamations of businesses. The point however is put beyond doubt by Section 14, sub-section (1), of the Act which provides for assessment of the tax after the return is submitted in pursuance of a notice issued under Section 13 of the Act. It requires that the Excess Profits Tax Officer, after completing the assessment should furnish "a copy of such order (that is the assessment order) to the person on whom the assessment has been made". Sub-section (2) of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act was the business and not the person owning it. This argument was met by Viscount Finlay at page 286 in the following passage:- "It is quite true that the statute imposing the excess profits duty treats the business as continuous for one purpose. As its name denotes, the excess profits duty is charged in respect of the excess of the profits yielded by any business after the outbreak of war as compared with its yield before the war. The business is regarded as remaining the same, although the person by whom it is carried on may have changed. This is consistent with the popular conception of a business as a thing which may exist for a century or more while the persons through whose hands the business passes may have chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice under that section. Under Section 21 of the Act some sections of the Income-tax Act were made applicable to this Act but those sections do not include Section 25 A of the Income-tax Act which continues the joint family as a unit for the purposes of assessment notwithstanding disruption of the family, subject to certain limitations. It is the absence of this provision that is strongly relied on by the Appellate Tribunal and also by the learned counsel for the respondent, the assessee in this case. The absence of such a provision in the Excess Profits Tax Act would undoubtedly have the effect of making it practically impossible for the Excess Profits Tax authorities to assess to tax the business of an undivided family if it had ceas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the family is entitled to treat the income of the family as his exclusive income or even to assert that he was entitled to any particular share, though the position is different under the Dayabhaga law. Therefore it follows that the person to whom notice should go must necessarily refer, in the case of an undivided family, to the undivided family engaged in the business, the profits of which are sought to be charged under the Act. In such a case, if the family continues to be joint, there is no difficulty because under Section 63 of the Income-tax Act which is made applicable to proceedings under the Excess Profits Tax Act, a notice or requisition in the case of an undivided family may be addressed to the manager or any adult male member ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
