V. D. M. R. M. M. R. M. MUTHIAH CHETTIAR versus COMMISSIONER OF INCOME-TAX, MADRAS

Citation: [1969] 3 S.C.R. 715 · Decided: 14-02-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Case Partly allowed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

715 
o. 
V. D. M, R. M. M. R. M. MUTHIAH CHETIIAR 
v. 
COMMISSIONER OF INCOME-TAX, MADRAS 
February 14, 1969 
B 
(J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] 
c 
D 
E 
F 
G 
H 
Indian Income-tax Act (11 of 1922), ss. 34 and 16(3)-Assessee's 
return of income as individual not showing that other members of his' firm 
were his minor sons-Income of minors separately assessed-S. 34(1) and 
s. 34(l)(b), applicability of income of a minor son whether can be added 
under s. 16(3 )-Income of assessee after having been separately assessed. 
The assessee and his minor sons separately held shares in a resident 
firm. For assessment years 1952-53 to 1954-55, the assessee filed returns 
as an individual and therein stated under the head business income that 
the profit should be ascertained from the Income-tax Officer assessing the 
firm. 
The names of the partners were stated, but it was not stated in the 
return that some of the parties were his minor sons. 
The minors, through 
their mother as guardian, 
also filed returns for these assessment years, 
and they were atisessed to tax. The assessee was also assessed as an indi-
vidual, in respect of his share in the income of the firm and other sources, 
but the assessment order did not include the share of the minors from the 
firm. 
The Income-tax Officer 
issued notices 
Of reassessment 
to 
the 
assessee under s. 34(1)(a) of the Indian Income-tax Act, 1922 for the 
years 1952-53 and 1953-54 and under s. 34(1)(b) for the year 1954-55. 
The Income-tax Officer took the view that the .assessee had not disclosed 
the fact that his sons were minors and the income of the sons which 
mould have been included under s. 16(3)(a)(ii) had escaped assessment 
n the assessee's hands and accordingly he brought that income to tax. The 
Appellate Assistant Commissioner confirmed this order. The Appellate 
Tribunal, in appeal held that for the first two years s. 34(l)(a) applied, 
that in respect of the third year there was no change of opinion but the 
assessment was made on information 
received 
within 
the meaning Of 
s. 34(1 )(b) and that the income of the minors could be assessed in the 
hands of the assessee notwithstanding the separate assessments already 
made on the minors. On reference, the High Court answered the ques· 
tions against the assessee. 
In appeal, this Court, 
HELD·: Section 16(3) of the Act imposed an obligation upon the 
Income-tax Offit,er to compute the total income of any individual for the 
purpose of assessment by including the items of income set out in els. 
(a)(i) to (iv) and (b), but thereby no obligation was imposed upon the 
tax-payer to disclose the income liable to be included in his assessment 
under s: 16( 3). For failing or omitting to disclose that income pro-
ceedings for reassessment could not be commenced under " 34(1)(a). 
Section 22( 5) required the assessee to furnish particulars of the names of 
the shares of the partners but imposed no obligation to mention or set out 
the income of the nature mentioned in s. 16( 3). In . the relevant years 
there was no head in the form of return prescribed under the rules under 
which income liable to be assessed to tax under s. 16(3)(a) & (b) could 
be disclosed. These assessments under s. 34(1)(a) for the years 1952-53 
.and 1953-54 could not, therefore be upheld. [721 A] 
(ii) 'The income of a minor can be included in the hands of an 
assessee under s. 16(3) of the Act, notwithstanding that an assessment has 
been made on the minor represented by his guardian. [718 G-H] 
?16 
SUP.LUlME COURT REPORTS 
[1969] 3 S.C.R. 
C. R. Nagappa v. Commissioner of Income-tax, Mysore, [1969] 1 
S.C.R. 979, followed. 
(iii) In respect of the assessment years 1954-55, there was n~ bas!s .for 
the argument that the Income-tax Officer had only changed his oplD!on. 
The order of re-assessment was made well within four years 'from the date 
of the last day of that assessment year. The notice wasJ therefore, com· 
petently issued by the Income-tax Officer. [721 F] 
CIVIL APPELLATE JURISDICTION :Civil Appeals Nos. 1457 to 
1459 of 1958. 
Appeals from the judgment and order dated August 21, 1964 
of. the Madras High Court in T.C. No. 75 of 1962 (Reference 
No. 50 of 1962). 
M. C. Chagla and T. A. Ramachandran, for the appellant (in 
all the appeals). 
S. K. Aiyar aail B. D. Sharma, for the respondent (in all the 
appeals). 
The Judgment of the Court was delivered by 
Shah, J. 
Ramanathan Chettiar his son Muthiah Chettiar 
~ail

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