LexGOVINDDAS & ORS. ETC. ETC. versus INCOME TAX OFFICER & ANOTHER
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B c D E F G H GOVINDDAS & ORS. ETC. ETC. v. INCOME TAX OFFICER & ANOTHER December 18, 197 5 [P. N. BHAGWATI, A. C. GUPTA ANDS. MURTAZA FAZAL ALI, JJ.J lnconie Tax Act (11 0/1 1922) s. 25A and lncnnu~ Tax Act (43 of 1961) ss. 171 and 297(2)(d)-Section 171(6) if retrospective-General rule of inter- pretation-"All the provisions of this Act shall apply accordingly", scope of. Under s: 25A, Income Tax Act, 1922, a l-Iindu undivided family \Vhich has been assessed to tax shall be deerne!f, for the purpose of that I\ct, to continue to be treated as undivided and, therefore, liable to be taxed in that status, unless an order is passed in respect of the family re· cording a partition of its property. Under s. 25A(l), if at the time of making an assessment, it is 1 claimed by or on behalf of the members of the family that the property of the joint family has been partitioned among the 1nembers or groups of members in definite proportions, the Income-Tax Officer shall bold an equiry and record an order to that effect, if satisfied. Under s. 25A(2) when "'uch an order has been recorded, the Income Tax Officer shall apportion the tax assessed on the total income of the undivided family and assess each mern- ber or group of members in accordance with the provisions of s. 23 and add to the tax for \Vhich such member or group of members may be separately liable, tax proportionate to the portion of the undivided family property allotted to him or to the group, and all members or groups of members, shall be liable jointly and severally for the tax assessed on the total income received by or on l)ehalf of the joint family. Thus a liability, which, so long as an order is not recorded under s. 25A(l), would be restricted to the assets of the Hindu un- divided fan1ily is by virtue of s. 25A(2) transformed, when the order of partition is recorded, into the personal liability of the members for the amount of tax Llue by the Hindu undivided family. But, the order could be recorded only if there n·as total partition as contra-distinguished front partial partition. [49 G-50 E] Section 171 of the Income Tax Act, 1961, corresponds to s. 25A of the 1922- ~-\ct. Sub-sections 2 to 5 of s. 171 contemplate a casei where at the time of making assessn1ent under s. 143 or 144, a clain1 is made by or on behalf of any member of a Hindu family that a total or partial partition has taken place an1011g its members and the Income Tax Officer has recorded a finding. In such a case, all the members would be jointly and severally liable for the tax assessed as payable by the joint family and for determining their several liability, the tax assc:iiised on the joint family would be apportioned among the members ac- cording to the portion of the joint family property allotted to each of them. Ins. 171 (6) it is provided that even where no claim of total or partial partition is made at the time of making the assessment under s. 143 or s. 144 and hence no order recording partition is n1ade in the course of assessment as con~emplated under sub-ss. 2 to 5, if it is found, after the completion of tfte assessn1ent, that 1he fatnily has already effected a partition, total or partial, all the m~mbers shall be jointly and severally liable for the tax assessed as payable by the joint family and the tax liability shall be apportioned amongr the members according to the, portion of the joint family property allotted to each of them. Section 171(6), thus, for the first time imposes, ini cases of this kind, jo_int and several liability on the n1e1nbers for the tax assesed on the Hindu undivided family and this is personal liability as distinct from liability limited to the joint fap1ily property received on partition. Section 171(7) provides that the several liability of any member or group of members shall be computed according to the portion of the joint family property allotted to him or it at the partition whetf1er total or partial. [50 G-"51 F; 52 C-E] Section 297(2) (d) (ii) of the 1961-Act provides that when a notice under s. 148 of the 1961-Act is issued for the reopening an assessment 'all the provisions of this Act shall apply accordingly'. • ' r j ' -· ·\ GOVI~'DDAS V. I.T.O. 45 - There \Vas a partial partition among the members of ·a Hindu undivided family in 1955. For the assessment years 1950-Sl to 1956-57, the assessment on the family \\'ere reopened after the 1961-Act had co
Excerpt shown. Read the full judgment & AI analysis in Lexace.