LexDAFFADAR BHAGAT SINGH & SONS versus THE INCOME-TAX OFFICER, A-WARD, FEROZEPORE
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
• DAFFADAR BHAGAT SINGH & SONS v. THE INCOME-TAX OFFICER, A-WARD, FEROZEPORE August 22, 1968 [V. RA:v!ASWAMI A1"D A. N. GROVER, JJ.] Jnco111e Tax Act, (11of1922) s. 34(3)-As~cssnu·nt claiincd as fir111- AssesseJ as llind11 lindivided 1-·an1ily- ·Appellate Cor11111i,sioner rever:i;es order and directs as,-e,·.nnent c.:.> /inn-First notice issued after four }'enrs- 1/ harm/. The appctl;inl-~1 p~rtncrship Jirn1 con~isllng of a f;1lhcr and his hvo sons filed a roturn for the assessment ye<tr 1952-53 on March 31, 1953, and applied for hcing rc~istercd as a firm. The Income-tax Officer held that the assc.;scc constituted a Hindu Undivided Family and not a firn1, and refused ro rcgisl~r it. But in appeal, the Appcllaic Assistant Com- n1issioner by an order dated August 11. 1959 allO\\'Cd the registration and held th;1t the business belonged to the firn1 and therefore its income must he excluded from that of the family. Accordingly the Income Tax Officer issued frc<h notice to the appellant under ss. 22(4) and 23(2) of the Act. The appellant refused to con1ply \Vith the notice and moved the Inspecting Assistant Commisc;ioner for giving a direction that the assess· ment should not be proceeded \vith O\ving to the statutory bar created hy s. 34( 3) of the Act. As the income-tax authorities did not accede to the request, the appellant filed a writ petition in the High Court. The High Court dic;n1issetl the petition. In appeal lo this lonrl. HELD :-The appoal must be dismissed. (i) The substantial issue before the Appellate Assistant Commis- sioner \\'as one of ~tatus of the assessec and he held that it y,·as a partner- ship firm and not a Hindu Undhrided Fan1ily. 11lis finding Y.'as necessary for deciding the appeal hefore the Appellate Assistanl Commissioner and it could not he rcgardC<.l as having been made only incidentally. Once a finding is gi\•,;n \\-'hich \Vas necessary for the di'iposal of the appeal the second proviso to s. 34(3) of the Act would he attracted and the bar of limitation would he li.ftcd. [8JI H-832 BJ S. C. Prashar and Others v. Vc.san'sen D1\'arkada.r & Ors. 49 l.T.R. 1 (S.C.); f\1. K. Si~·afi11_r:nn1 C'hcf/iar v. Tire Co111n1issio11cr of /11con1e-rax, Madra<. Civil Appeal No. 198.~ of 1966 decided on 27-3-67, referred to. (ii) lt could not be held in the circumstances of the CJse lhat the appellant \\'as a total .stranger to the asscs~ment \\ 1hich \Vas under appeal before the Appellate Assistant Commissioner and had no intimate connec- tion Y.1ith the person v.·hoc;c ~1ssessmcnt \\'as made h~· the lncon1c-tax Officer and \\'11<; set a-.idc in appeal by the Appellate Assio;;tant Com- missioner. (8:\2 H] Clvr1. APPELLATE JuRISDICTIO~ : Civil Appeal N0. 952 of 1966. Appeal by special leave from the judgment and order dated May 11. 1965 of the Punjab High Court in Letters Patent Appca~ No. 169 of 1965. A B c D E F • G H - BHAGAT SINGH v. J.T.O, (Grover, !.) 8 29 A Veda Vyasa, Bishambar Lal, H. K. Puri, M. K. Garg and B c D E F G H K. K. Jain, for the appellant. Niren De, Solicitor-General, T. A. Ramchandran, R. N. Sachthey and B. D. Sharma, for the respondent. The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave against. ~he judgment of the Punjab High Court dismissing the writ pent;on of appellant Firm herein under Arts. 226 and 227 of the COjl)Sntu- tion by which it was prayed that a writ of prohibition directing the income tax authorities not to proceed with the assessment for the year 1952-53 be issued. A prayer was als? made (or the issue of a writ of certiorari for quashing the notices under ss. 23 ( 2) and 22 ( 4), of the Income tax Act, 1922, hereinafter called the Act, which had been issued by the Income tax Officer in that connection. The appellant firm filed a return for the assessment year 1952-53 on March ~l, 1953. It also applied that it may be registered as a firm under s. 26A of the Act, the partners being Bhagat Singh and his two sons Kartar Singh & Dhian Singh, their shares being in the proportion of 4/16, 6/16 and 6/16 respec- tively. The Income tax Officer passed an or<ler on March 26, 1957 holding that the assessee constituted a Hindu Undivided Family and not a firm. The registration under s. 26A was also refused. The appellant approached the Appellate Assistant Commissioner in appeal who made an order on August 11, 1959 allowing registrat
Excerpt shown. Read the full judgment & AI analysis in Lexace.