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TMI Blog1971 (1) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment or reassessment proceeding commenced under section 15. - - - - - Dated:- 21-1-1971 - Judge(s) : J. C. SHAH., A. N. GROVER., K. S. HEGDE JUDGMENT The judgment of the court was delivered by SHAH C. J.--Gurbux Rai Harbux Rai, hereinafter called " the assessee ", is a registered firm carrying on business in piece-goods and commission agents. It has its head office at Kanpur and a branch office at Farrukhabad. During the chargeable accounting periods July 4, 1943, to June 21, 1944, and June 22, 1944, to July 10, 1945, Gurbux Rai and Harbux Rai (each representing his joint family) were the two partners of the assessees with equal shares in the profit and loss. In proceedings for assessment of tax under the Excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Income-tax Officer the assessee appealed to the Appellate Assistant Commissioner who by his order dated October 10, 1947, observed : " ...that partial partition in respect of movable property of Gurbux Rai was effected on a date somewhere near Asadh Samvat 2000, from which date Farrukhabad business was conducted by a separate firm consisting of Harbux Rai, Mst. Chameli and Gopaldas ". Pursuant to this order the Income-tax Officer modified the assessment with respect to the income-tax assessment of the assessee for the assessment years 1944-45 and 1945-46. The Excess Profits Tax Officer however started proceedings under section 10A by notice dated February 6, 1951, calling upon the assessee to show cause why appropriate adjustmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuance of the appellate order of the Appellate Assistant Commissioner who had held that the family of Gurbux Rai was partially partitioned. The Tribunal also held that the Excess Profits Tax Officer was competent to pass an order under section 10A of the Excess Profits Tax Act. The Tribunal, thereafter, referred the following questions to the High Court of Allahabad under section 21 of the Excess Profits Tax Act read with section 66(1) of the Income-tax Act, 1922 : " (1) Whether, on the facts and in the circumstances of this case, there was any definite information within the meaning of section 15 by virtue of which the Excess Profits Tax Officer was competent to reopen the excess profits tax assessment ? (2) Whether, in the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of jurisdiction in a pending assessment proceeding. As the proceedings initiated by the Excess Profits Tax Officer under section 15 were void, he had no power in him to make an order under section 10A of the Act. The High Court, accordingly, answered the second question also in the negative. Against the order passed by the High Court, with certificate granted by the High Court these two appeals are preferred. A parallel proceeding which had come before this court in Civil Appeals Nos. 741-743 of 1966--Gurbux Rai Harbux Rai v. Commissioner of Income-tax--decided on August 2, 1968, may also be referred to. It may be recalled that the Excess Profits Tax Officer at Kanpur had served a notice under section 10A of the Excess Profits Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction arose. The court had only answered the question whether the transaction of partial partition was one which could be avoided under section 10A of the Excess Profits Tax Act. The decision of the High Court (which had become final) about the authority of the Excess Profits Tax Officer to take action under section 10A does not affect the maintainability of the present appeal. Section 10A of the Excess Profits Act, in so far as it is relevant, provides : " (1) Where the Excess Profits Tax Officer is of opinion that the main purpose for which any transaction . . . was effected . . . was the avoidance or reduction of liability to excess profits tax, he may,...make such adjustments as respects liability to excess profits tax as he co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, to determine whether an order was made under section 10A in a pending proceeding for assessment of excess profits tax. But the question whether there was a pending proceeding under section 15 in the course of which an order under section 10A could be made cannot be ascertained on the materials available before us. The High Court has decided that the proceeding under section 15 was not valid, because there was no definite information with the Excess Profits Tax Officer and on that account proceeding under section 10A was not valid. It has been assumed that there was a pending proceeding under section 15 in the course of which an order under section 10A was made. Expression of that opinion of the High Court is challenged. We are of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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