9911796707
TMI Blog1986 (9) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ments for the assessment years 1962-63 to 1967-68 which were made by the Income-tax Officer to give effect to the earlier finding of the Appellate Tribunal and the Appellate Assistant Commissioner for the assessment years 1962-63 and 1963-64 and 1964-65 to 1967-68, respectively ?" This case has a chequered disputes which arose in 1947 between members of a joint family were the subject-matter of consideration in several courts and the matter eventually went right up to the Supreme Court. The question which basically fell for consideration was whether the business carried on in the plying of motor buses by Samudrala Patrudu was his individual business, or it was the business of a joint family consisting of himself and his brothers. After the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessments were made on Durgamma as an individual on the income derived from the business. There were appeals against the assessments. When appeals were filed before the Tribunal, the Tribunal cancelled those assessments holding that the income from the business could not be assessed in the hands of Durgamma in her individual capacity. The Tribunal held that the business belonged to a joint family of which Samudrala Patrudu was the " karta " and, therefore, the income was liable to be assessed in the hands of the joint family. The order of the Income-tax Appellate Tribunal cancelling the assessments made in the individual hands of Durgamma for the assessment years 1962-63 to 1968-69 is not part of the record. Neither standing counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any event, on March 27, 1950, when the Subordinate Judge passed a preliminary decree for partition. It was urged that no assessment could be made against a joint family which was not in existence in the previous years relevant for the assessment years 1962-63 to 1968-69. The Income-tax Appellate Tribunal accepted the above contention of the assessee and once again quashed the assessments made on the joint family as not maintainable. With the leave of this court under section 256(2), the question of law mentioned at pages 777, 778 supra was referred to this court for consideration. In the first place, we may point out that the question as referred does not arise out of the order of the Tribunal. We have carefully gone through the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act to the effect that on the partition of properties, the joint family ceased to exist, the joint family must be deemed to exist and assessment can be made according to that fiction. Attention, in particular, was invited by learned standing counsel to section 171(1) which is in the following terms : " 171. (1) A Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family. " It is submitted that no order under section 171(1) was passed in the present case and consequently the joint family must be deemed to continue. In that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a decree is passed by the court, whether preliminary or final. In the present case, a suit was filed in 1947 and a preliminary decree was passed in March, 1950. These steps have the necessary consequence of rendering the joint family non existent in law and that position prevails for income-tax purposes also as the matter is not saved by the provisions of section 171(1) of the Income-tax Act. The fiction that a joint family shall be deemed to continue, enunciated in section 171(1), is for the limited purpose of roping in cases of joint families which had hither to been assessed. It is not possible to extend that fiction beyond the field legitimately intended by the statute. The fiction in section 171(1) must necessarily be confined to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsy in the present case that section 171(1) of the Income-tax Act, 1961, can have no application. It is not the endeavour of the Revenue that these assessments can be sustained on any other basis except on the fictional existence of the joint family in the relevant assessment years. Inasmuch as we have come to the conclusion that the joint family cannot be deemed to be in existence in the previous years relevant to the assessment years 1962-63 to 1968-69, the conclusion reached by the Tribunal that the assessments made in the hands of the joint family were improper, is correct and we accordingly uphold the same. We are distressed to note the casual manner in which this case was dealt with by the Department. Initially , when the appeals re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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