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TMI Blog1990 (11) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... n agreement dated April 2, 1975, by which they had severed their status as members of the Hindu undivided family and declared themselves as equal sharers in the joint properties of the family. He, therefore, contended that the assessment should be concluded against the association of persons under section 3(3) of the Act as tenants-in-common. The assessing authority did not accede though he examined the claim put foward in regard to the disruption of the status of the joint Hindu family and examined the agreement which had been signed by all the members of the family and which was placed before him by the advocate appearing for the assessee (a little later in the course of this order, we shall extract the exact words used by the assessing authority in regard to this aspect of the case, in the light of the arguments advanced by the learned High Court Government Pleader appearing for the respondentCommissioner.) However, the advocate for the assessee had no objection to the computation of income by the assessing authority where certain allowance was disallowed and the income returned at Rs. 17,302.42 was raised to Rs. 69,287.42 by allowing expenses of Rs. 74,025 on the income of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (3) of section 30 of the Act which clearly provided for a presumption in favour of the family continuing as a Hindu undivided family, the appellate authority was in error in interfering with the assessing authority's order. Therefore, the present revision petition by the assessee, inter alia, contending that the respondent-Commissioner had no jurisdiction as there was no order prejudicial to the Revenue and there was no error of law in the order of the Deputy Commissioner (Appeals). It is useful to set out section 30 of the Act and it is as follows : " 30. Assessment after partition of a Hindu undivided family.--(1) Where at the time of making an assessment under section 19, it is claimed by or on behalf of any member of a Hindu undivided family, or branch, an Aliyasanthana family or a Marumakkattayam tarwad or tavazhi hitherto assessed as undivided that a partition or maintenance division has taken place among the members or groups of members of such family, branch, tarwad or tavazhi, the Agricultural Income-tax Officer shall make such inquiry thereinto as he may think fit, and if he is satisfied that there has been a partition or maintenance division of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the members of the family and, therefore, that agreement signed by all the members of the family was evidence of disruption of the status of the joint family. Accordingly, the assessing authority has dealt with that contention in the following terms : "During the year under assessment, the assessee has claimed the status of 'tenants-in-common'. The assessment up to the year under assessment was being made in the status of a 'Hindu undivided family'. At the time of hearing of the case, the assessee's representative pleaded that the status of a Hindu undivided family was disrupted on April 2, 1975, and shares of the properties have been determined by the members of the Hindu undivided family. The claim of the assessee was examined. Since the Hindu undivided family was not disrupted earlier even though the erstwhile karta of the Hindu undivided family, late Palekanda Muthanna, expired some years back and the assessment in this case was continued in the name of the family male members, the status claimed as 'tenants-in-common' at this stage is not acceptable." In the light of the conclusion reached as above, the assessment was concluded treating the return, not as a return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding property as tenants-in-common and deriving agricultural income, the tax should be assessed at the rate applicable to the agricultural income of each tenant-in-common. If a finding is recorded that the income derived by the member of the family is income of a tenant-in-common, then sub-section (3) of section 3 as it stood at the relevant time, for the relevant assessment year, automatically is attracted. It is a normal rule of construction that, if a particular class of persons is governed by some provision of law or within its ambit, then they stand excluded from the application of other provisions of law in the same enactment. Therefore, if the members of the family or an association of persons answer to the description of tenants-in-common by virtue of the agreement of April 2, 1975, then they could not be assessed under any other provision, but sub-section (3) of section 3 of the Act, as held in Cheradappa Pai"s case [1970] 77 ITR 313 by a Division Bench of this court. In this connection, we may even mention that "person" is defined under clause (b) of section 2 of the Act and provides for an association of individuals, whether incorporated or not. Therefore, the signatorie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial partition. In that event, it proceeded to hold that in the case of a Hindu undivided family, the status of which had been disrupted by a partition of some of the properties and not of some other properties, the income derived from the undivided property should be treated as the income of the Hindu undivided family and the income derived from those which were divided should be treated as the income of tenants-in-common. It was this principle which was followed by the Allahabad High Court in the case of Puroshottan Das Rais [1966] 61 ITR 86, approving the dicta of the Madras High Court in that behalf. We are of the view that some useful purpose would be served by referring to the decision of the Supreme Court in somewhat identical circumstances, in the case of Kalwa Devadattam v. Union of India [1963] 49 ITR 165. In the said case, N and his three sons were assessed to tax in the status of a Hindu undivided family for the assessment years 1944-45 to 1946-47 in the months of February and March 1948. As the tax due for those years was not paid, the Madras revenue authorities, at the instance of the Income-tax Department, attached 51 items of immovable properties as belonging to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : " In our opinion here there are three different branches of law to notice. There is the law of partnership, which takes no account of a Hindu undivided family. There is also the Hindu law, which permits a partition of the family and also a partial partition binding upon the family. There is then the income-tax law under which a particular income may be treated as the income of the Hindu undivided family or as the income, of the separated members enjoying separate shares by partition. The fact of a partition in the Hindu law may have no effect upon the position of the partner, in so far as the law of partnership is concerned, but it has full effect upon the family in so far as the Hindu law is concerned. Just as the fact of a karta becoming a partner does not introduce the members of the undivided family into the partnership, the division of the family does not change the position of the partner vis-a-vis the other partner or partners. The income-tax law before the partition takes note, factually, of the position of the karta, and assesses not him qua partner but as representing the Hindu undivided family. In doing so, the income-tax law looks not to the provisions of the Partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for more than one reason, accede to the same. First, the return was filed and signed by the eldest member of the family who was one of the signatories in his capacity as a joint owner showing the status of the family as an association of persons. As approved by the Supreme Court in the case of Sri Ram Pasricha v. Jagannath, AIR 1976 SC 2335, a joint owner or a co-owner has all the rights of the owner and may extract the same in his capacity as a joint or co-owner. The passage is as follows (at p. 2339) : "Mr.V. S. Desai reads to us from 'Salmond on Jurisprudence' (13th Edition) and relies on the following passage in Chapter 8 (Ownership). Paragraph 46 at page 254 : 'As a general rule a thing is owned by one person only at a time, butduplicate ownership is perfectly possible. Two or more persons may at the same time have ownership of the same thing vested in them. This may happen in several distinct ways, but the simplest and most obvious case is that of co-ownership. Partners, for example, are co-owners of the chattels which constitute their stock-in-trade, of the lease of the premises on which their business is conducted, and of the debts owing to them by their customers. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or the Rules do not provide for the type or procedure of enquiry to be held by the Agricultural Income-tax Officer under sub-section (1) of section 30 of the Act. As long as he looked into the deed of partition and recorded a finding, that investigation of facts would constitute the enquiry contemplated under the Act. We also must observe in this context by way of caution that sometimes it will not be apposite to rely upon the decision rendered under the Indian Income-tax Act of 1922, with reference to section 25A, corresponding to section 30 of the Act because, under the Income-tax Act, income from different sources are liable to be taxed whereas, under the Act, only the agricultural income may be taxed. Therefore, as long as agricultural property is divided or stands divided in equal proportions, then partition is concluded in so far as the agricultural property is concerned and so far as the Act is concerned. Yet another argument that was advanced was that there was no separate order. We do not think that the contention has any force. It is quite common even in judicial orders to pass interlocutory orders in the final judgment. Therefore, if an order recording a finding purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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