COMMISSIONER OF INCOME-TAX, ASSAM versus NANDLAL AGGARWAL & ANR.

Citation: [1966] 2 S.C.R. 612 · Decided: 17-11-1965 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Appeal(s) allowed

Judgment (excerpt)

·6 12 
COMMISSIONER OF INCOME-TAX, ASSAM 
V. 
NANDLAL AGGARWAL & ANR. 
November 17, 1965 
(K. SUBBA RAo, J. C. SHAH AND S. M. S!KRI, JJ.) 
Indian Income-tax Act (11 of 1922), s. 40-Two guardians appointed 
for two minors-Hindu undivided famUy or individual, assessment. 
The two respondents were appointed guardians of the two minor 
sons after the death of their father and mother, by an order of the Civil 
Court. Prior to his death the income of 
the, father's 
business 
was 
assessed as an individual. 
The guardians filed a return on behalf of the 
minors in the status of a joint Hindu family. 
The Income-tax Officer 
assessed the guardians under s. 23(3) read with s. 41 of the Income-
tax Act. 
Later the Court allowed the guardians to keep and submit 
separate accounts thereafter for each of the minors. The Appellate 
Assistant Commissioner, on appeal against the assessment, directied their 
separate individual assessments, which was 
set aside 
by 
the 
Tri-
bunal. On reference, the High Court held against the Revenue. 
In 
this Court, the Revenue contended that under s. 40 of the Act the guardians 
were liable to pay tax as it would be leviable from minors if of full 
age, and if the minors had been of full age they would be assessed as 
Hindu undivided family. 
HELD : Section 40 of the Act applied to this case, and consequently 
the guardians ought to be assessed, treating the minors as constituting a 
Hindu undivided family. [616 HJ 
On the death of the father, the minor sons constituted a joint Hindu 
family and the business was joint family property. Till some positive 
action was taken to effect a partition of the property, it would remain 
join.I family property. The order appointing the two guardians could 
not be read as having effected partition of the property. Apart from the 
fact that the Court under the Guardianship Act has no jurisdiction to 
partition prope.rty belonging to a joint Hindu family, there are no words 
in the order of the Court appointing the guardians to warrant such a 
finding. [616 EJ 
The court's order allowing the guardians to keep and submit separate 
accounts came into existence after the assessment year and after the 
Income-tax Officer had passed his order. 
Therefore, it could not have 
any effect on the position prevailing in the relevant accounting year in 
. dispute. 
[616 DJ 
Srifudin A/imohammad v. Commissioner of Income-tax, 
25 I.T.R. 
237, re'.er:ed to. 
Con1missioner of Income-tax v. Balvantrai Jethalal Vaidya, 34 I.T.R. 
187, approved. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 820 of 
1964. 
Appeal from the order dated July 4, 1961 of the Assam High 
·Court in Income-tax Reference No. 1 of 1961. 
A 
• 
• 
B 
c 
D 
E 
F 
G 
H 
• 
• 
• 
• 
c.I.T. v. NANDLAL (Sikri, J.) 
613 
A 
S. V. Gupte, Solicitor-General, N. D. Karkhanis, B. R. G. K. 
B 
c 
D 
E 
F 
G 
Achar and R. N. Sachthey, for the appellant. 
A. V. Viswanatha Sastri and D. N. Mukherjee, for the respon-
dents . 
The Judgment of the Court was delivered by 
Sikri, J. This appeal in pursuance of a certificate granted 
under s. 66A(2) of the Indian Income Tax Act, 1922, herein-
after referred to as the Act, is directed against the judgment of the 
High Court of Assam in a reference made to it under s. 66(2) of 
the Act. The question referred to by the Appellate Tribunal was 
"whether in the circumstances of the case the Tribunal was 
justified in assessing the income of the minors in the hands of the 
guardians as the income of a Hindu undivided family." 
The relevant facts out of which the reference arose are as 
follows : Shri Kisbanlal Agarwalla died intestate in December 
1950, leaving his widow and two minors, Basanta and Ashok. 
Prior to his death he was being assessed as an individual on the 
income arising from the business carried on in the name of Shri 
Krishan Rice Mills, Tezpur. He was governed by Mitakshra 
School of Hindu Law. The widow also died in 1952. On the 
death of the widow an application was made by Shri Nandlal 
Agarwalla to the Court of the District Judge, Gauhati, for being 
appointed as a guardian of the person and the properties of the 
two minors, Basanta and Ashok. The District Judge, oy his order 
dated June l, 1953, appointed him temporarily the guardian of 
the person and properties of Basanta and Ashok, till the disposal 
of the application, and transferred the file to the Subordinate 
Judge, L.A.D., Nowgong. On December 15, 1953, the Sub-Judge 
appointed Shri Dwarka Prasad 

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