LexV. V. R. N. M. SUBBAYYA CHETTIAR versus COMMISSIONER OF INCOME.TAX, MADRAS
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S.C.R. SUPREME COURT REPORTS 961 V. V. R. N. M. SUBBAYYA CHETTIAR V. COMMISSIONER OF INCOME.TAX, MADRAS. [SAIYID FAZL Au, MUKHERJEA and CHANDRASEKHARA AIYAR JJ.J Indian Income-tax Act (XI of 1922), s. 4A (b)-Hindu undivided family-Residence-Tests--Occasional visits to India and attending to family affairs there, effect of-B,wden of proof-" Control and management",'' situated", "wholly" and 11 affairs", meanings of. The words used in s. 4A (b) show: (i) that, normally a Hindu undivided family will be taken to be resident in the taxable terri- torieE1, but such a. presumption will not apply if the case can be brought under the second part of the provision, (ii) the word 11 affairs " means affairs which are .relevant for the purpose of the Income-tax Act and which have some relation to income, (iii) the question whether the case falls within the exception depends on whether the seat of the direction and control of the affairs of the family is inside or outside British India, and (iv) the onus of proving facts which would bring his case within the exception which is provided by the latter p.rt is on the assessee. The expression "control and management" ins. 4A (b) ol the Income-tax Act signifies the controlling and directive power, the "head and brain" as it is sometimes called; 11 situated" implies the functioning of such power at a particular place with some degree of permanence; and ''wholly" seems to recognise the possibility ol the seat of such power being divided between two distinct a.ad separate places and thn.t a Hindu undivided family may have more than one residence in the same way as a corpora- tion may have. The karta of a Hindu undivided family lived with bis wife and children and ca,rried on business in Ceylon, which bad become their place of domicile. He owned some immoveable property and bad a house. anil investments in British India. In the year of account be visited British India and stayed there for periods amounting in all to 101 days and during his stay started two firms in British India, personally attended to a litigation relating to tbe family lands, and appeared before the Income-tax 1rnthorities in proceedings relating to assessment of the. income of the family: Held, that these facts were not necessarily conclusive to establish tbe existence of a centre of control and management of the affairs of the family in British India, but they were by no ineans irrelevant to the matter in issue, and inasmuch as the assessee had not discharged the onus which lay upon him under the law by producing all' the material evidence which be was p&lled upon to produce to show that norms.11¥ and s.s a matter of l l3 1960 Dec, 21. 962 SUPREME COURT REPORTS [ 1950] 1950 course the affairs in India were also being controlled from Colombo, the normal presumption under the firot part of s. 4 A (b) V. V. R. N. M. must be given effect to and the assessee must be treateil as a SubQayya resident in British India during the year in question. It was Gh~ttiar however open to the assessee to prove in future years by proper v. evidence that the seat of control and managerr1ent of the affairs Oommissiontir of of the fau1ily wa.s wholly out.side British InUia. Income·ta•, De.Beere V· Howe 15 Tax Oas. 198), Swedish Central Railway Madra•. Co. Ltd. v. Thompson (9.Tax Oas. 373) l'eferred to. APPELLATE jURISDICTION: Civil Appeal No. XXXVIII of 1949. Appeal from a Judgmept of the High Court of Judi- cature at Madras (Gentle C. J. and Patanjali Sastri J.) dated August 22, 1947, in a reference under section 66 (1) of the Indian Income-tax Act made by the Income.tax Appellate Tribunal (Ref. No. 25 of 1946). K. Rajah Aiyar (K. Srinivasan, with him) for the appellant. M. C. Setalvad (G. N. Joshi, with him) for the res. pondent. 1950: December 21. The Judgment of the Court was delivered by Fa•! A!i J. FAZL ALI J. -This is an appeal from a judgment of the High Court of Judicature at Madras on a reference made to it under section 66 (1) of the Indian Income- tax Act by the Income-tax Appellate Tribunal in connection with the assessment of the appellant to income-tax for the year 1942-43. The question of law referred to the High Court was as follows:- " Whether in the circumstances of the case, the assessee (a Hindu undivided family) is 'resident' in British India under section 4A (b) of the Income-tax Act." The circumstances of the case may be brief
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