ADDITIONAL INCOME-TAX OFFICER, CUDDAPAH versus A. THIMMAYYA AND OTHERS

Citation: [1965] 2 S.C.R. 91 · Decided: 09-11-1964 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

Judgment (excerpt)

A 
ADDITIONAL INCOME-TAX OFFICER, CUDDAPAH 
B 
c 
D 
E 
F 
G 
H 
v. 
A. THIMMA YY A AND OTHERS 
November 9, 1964 
[K. SUBBA R\O, J. c. SHAH ANDS. M. S!KRI, JJ.] 
Income-tax Act (XI of 1922), s. 25-A (I) and (2)-&~pe of. 
While proceedings for assessment of the income-iax of a Hindu uo-
divided family, of which the respondents were members, were pending, 
there was a partition in the family and a consequent ~!aim for re<:<>gnising 
the partition under s. 25-A(l) of the Income-tax Act (XI of 1922) was 
made before the Income-tax Officer. The officer however proceeded to 
assess the tax as if there was no partition and after the order of as>essmcnt 
was made, passed an order recognising the partition. The amount of tax 
determined by the officer was questioned on appeal and before the TribUMI 
but without success. 
As the tax due was in arrear, the officer sought lo 
attach the remuneration earned by the respondents as employees of a firm, 
by resorting to s. 46(5) of the Act. The respondents challenged the order 
of the Income-tax Officer under s. 46(5), by a writ petition which w"' 
allowed by the High Court on the ground that the Income-tax Officer could 
not proceed to collect the tax without apportioning the tax liability under 
>. 25-A(2). In appeal to the Supreme Court, 
HELD : Though the High Court was in error in holding that an order 
of assessment which had become final was liable to be reopened under 
s. 25-A(2) by the Income-tax Officer when the order under s. 25-A(I) was 
passed by him subsequent to the order of assessment, the appeal should 
be dismissed becaur.;e, so long as there was an assessment of the Hindu 
undivided family, the liability for payment of the tax was on the property 
of the family and there was 
no personal liability on the 
members. 
[97 E-F, HJ 
The sche1ne of the section is that a Hindu undivided family assessed in 
respect of its income, would continue to be assessed in that status notwith 4 
standing a partition of the property among its members. 
If a claim is 
raised at the time of making an assessment that a paitition had been 
effected, the Income-tax Officer must make an inquiry after notice to all 
the members of the family and make an order that the family property 
had been partitioned in definite portions if he is so satisfied. He is how-
ever, by law required to make the assessment on the income of the un-
divided family, as if no partition had taken place and then to apportion 
to each member or group of members the tax-liability according to the 
portion of the family property allotted. 
In such a case the members of 
the family stand jointly and severally liable for the entire amount of tax. 
under the proviso to sub--s. (2) of section. 
It no claim for recording 
partition is made, or if a claim is made and it is disallowed, or the claim 
is not considered by the officer, the assessment will continue as if there has 
been no partition, and so long as the assessment is made on the income 
of the undivided family, the liability to satisfy the tax must be restricted 
to the estate of the family. 
[96 B-F] 
CIVIL APPELLATE JURISDICION: Civil Appeals Nos. 1019-
1020 of 1963. 
Appeals from the judgment and orders dated August 3, 1961 
of the Andhra Pradesh High Court in Writ Appeals Nos. 49 and 
50 of 1960. 
92 
SUPREME COURT REPORTS 
[1965] 2 S.C.R. 
S. V. Gupte, Solicitor-General, N. D. Karkhanis and R. N. 
A 
Sachthey, for the appellant (in both the appeals). 
K. N. Rajagopala Sastri, A. Ramachandran for R. Gopala-
krishnan, for the respondent (in both the appeals). 
The Judgment of the Court was delivered by 
Shah, J. 
Krishnappa and his two 
sons--Thimmayya and 
Venkatanarsu-constituted a Hindu undivided family. They 
carried on business in mining in the name and style of Krishnappa 
and Sons. The family was disrupted in 1946, and all its properties 
B 
· were divided among the members of the family. 
The business of 
Krishnappa and Sons was taken over by a firm of which the part-
c 
ners were Krishnappa and his two sons. 
A private limited Com-
pany styled "Krishnappa Asbestos and Barytes (Private) 
Ltd." 
took over the business of the firm on May 21, 194 7 for 
Rs. 2,04,000. 
Thimmayya obtained employment under the Com-
pany as Mines Superintendent at a monthly salary of Rs. 400 and 
Venkatanarsu as General Manager at a monthly salary of Rs. 500. 
D 
Proceedings for assessment of tax due by the Hindu undivided 
family for the years 1941-42, 1942-43, 1944-45, 1945-4

Excerpt shown. Read the full judgment & AI analysis in Lexace.