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TMI Blog1976 (6) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, each one of them had 1/3rd share in such business. Disputes and differences having arisen, a suit was instituted and receivers were appointed by the court in respect of the said business. For the differ ent assessment years 1950-51 to 1955-56, the income arising out of the said business was assessed in the hands of the receivers. The assessment order for 1950-51, made annexure "B" to the writ petition, goes to show that the assessees were the receivers, Balai Lal Sen and Bibhuti Bhusan Sen, of Messrs. Sen Brothers and Company and the assessment was made taking the status of the assessees to be that of an association of persons. Such assessment in now final. It is not in dispute that the Income-tax Officer in assessing Manmatha Nath Sen on his personal income for the aforesaid assessment years 1950-51 to 1955-56 computed his total income by adding his 1/3rd share in the income of the firm, Sen Brothers and Company, under section 16(1)(a) for the purpose of determining the rate of taxation. It is, however, not in dispute that that part of his income from the business was exempted from taxation under section 14(2) of the said Act. Manmatha Nath Sen preferred appeals against su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le was discharged by D. Basu J. on two-fold grounds. In the first place, the learned judge in the trial court held that after amendment in 1941, the order contemplated by section 33A(2) must be held to be an administrative order which called for no application of the principles of natural justice. Moreover, it was held that the decision of the subordinate authorities having merged in the administrative order of the Commissioner made under section 33A(2) of the Act no writ of certiorari as prayed for was maintainable. Secondly, on the merits, the learned judge held that the authorities were right in their view that the income assessed in the hands of the receivers was the income of Manmatha Nath Sen and his co-sharers carrying on the business through the receivers and such income being separately taxed in the hands of the receivers was exempted from further taxation in the hands of Manmatha Nath Sen under section 14(2) but none the less his share in the said income being his income was rightly added under section 16(1)(a) to the total personal income of Manmatha Nath Sen for the purpose of determining the rate of taxation. This decision of the learned judge in the trial court is bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h v. Income-tax Officer [1965] 57 ITR 349 (SC). As a matter of fact, the Supreme Court expressly overruled the earlier decisions relied on by the learned judge in the trial court in support of his view that the order contemplated by section 33A(2) is an administrative order and the doctrine of natural justice cannot be imported because there is no obligation to hear either expressly or impliedly and further that such an order is not amenable to any writ of certiorari. Mr. Sen has none the less contended that it is not always obligatory for the Commissioner to hear the party who had preferred a review application under section 33A(2) inasmuch as an oral hearing is not a mandatory prerequisite. Reliance is placed by him on the Bench decision of the Allahabad High Court in the case of Babu Lal Kedia v. Income-tax Officer [1973] 92 ITR 542 (All). On the second point raised by Mr. Dutt on the merits, Mr. Sen has contended that both the learned judge in the trial court as also the assessing authorities were right in their conclusion that it was Manmatha Nath Sen and his co-sharers who were the real assessees in the assessment of the business income in the hands of the receivers so that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng is not a mandatory pre-requisite. On facts he has further contended that the review application raised no such dispute as could require either any oral hearing or any other opportunity to the appellant to substantiate his case fully made out in his application for review itself. The question of law raised, according to Mr. Sen. was of such a nature as could be well disposed of on the terms of the statute and if the Commissioner did not consider it necessary to hear the parties on the point, it cannot be said that he was in any way wrong. In our opinion, however, the dispute as to whether the Commissioner could have lawfully disposed of the review application without hearing the appellant or without affording him any other opportunity to support his case made in the application for review is of little importance when admittedly the issue involved is a question of law which had been fully argued both before the learned judge in the trial court and before us and when we are of the view that the learned judge in the trial court was right in upholding the view taken by the assessing authorities. When the appellant's case on merits of his claim is not sustainable in law we do not thin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what help Mr. Dutt in supporting his contention now put forward before us, the decision of this court in Asit Kumar Ghosh's case [1953] 24 ITR 576 (Cal) would be of no assistance to Mr. Dutt. There, the assessee was the executor not earning the income on others behalf but on his own behalf. This court expressly found that the provision of section 13(b) of the Agricultural Income-tax Act which corresponds to sections 40 and 41 of the Income-tax Act had no application to the executors. So far as, however, the receivers are concerned, the point in our opinion has been set at rest by the Supreme Court by several decisions. Assessment of the business income in the hands of the receivers cannot but be an assessment in terms of section 41(1) of the Act. On the scheme of section 41 where the income comes in the hands of a receiver, section 41 enables the assessing authority to levy the income-tax payable on such income and recover the same either from the receiver under section 41(1) or from the real owner who earns the income from the receiver by a direct assessment on them under section 41(2). In the present case, the assessment had obviously been made under section 41(1). By that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The receivers had joined in a common purpose and they acted jointly. When they did so they acted on behalf of the persons who were the owners of the business. The receivers did not and could not have represented the individual interests of the various owners of the business. If they had done so there would have been chaos in the business. The profits to which those owners lay claim and which they were not averse to pocket, were earned on behalf of an "association of persons". The profits were earned on behalf of the persons who had a common interest created by the order of the court and were on that account an 'association of persons '." Similar was the view taken by the Supreme Court in the case of Commissioner of Income-tax v. Managing Trustees, Nagore Durga [1965] 57 ITR 321 (SC). On the decision of the Supreme Court as above it must now be held that the assessing authorities in assessing the income of the business carried on by the receivers in the name of Sen Brothers and Company were really assessing the true owners, namely, Manmatha Nath Sen and his co-sharers. Though the assessment was being made in the hands of the receivers, Manmatha Nath Sen and his co-sharers bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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