TMI Blog1969 (2) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Muthiah, constituted a Hindu undivided family. The family owned a 3/5th share in M. RM. S. Firm, Seramban, in Malaya. The firm was assessed under the Indian Income-tax Act, 1922, in the status of a firm resident within the taxable territories. On September 16, 1950, Muthiah separated from the family taking his 1/5th share in the M. RM. S. Firm. On April 13, 1951, the status of the family became completely disrupted and the three sons of Muthiah took in equal shares the remaining 2/5th share--the grandfather, Ramanathan, taking no share in the M. RM.S. Firm. For the assessment year 1952-53 Muthiah submitted a return of his income as an individual and stated under the head "business income". " Kindly ascertain his (assessee's) share o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettiar and Annamalai Chettiar it was not disclosed that they were minors. For the assessment year 1954-55 at the foot of page 1 of the return Muthiah stated : " The assessee has a remittance of Rs. 6,188-12-0 from R. RM. S. Firm, Seramban. His share of income may be taken from the firm's file.", and in Part III the names of seven partners as mentioned in 1952-53 return were set out-Ramanathan, Alagappan, and Annamalai were not shown as minors. Ramanathan, Alagappan and Annamalai--the three minor sons of Muthiah-represented by their mother and guardian also filed returns of their respective income for the years 1952-53, 1953-54 and 1954-55 and disclosed therein their shares in the profit from the 2/5th share in the M. RM. S. Firm. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Officer. In appeal to the Tribunal it was contended by Muthiah that he had fully and truly disclosed all the particulars he was required to disclose in the returns of his income for the three years in question, and "section 34(1)(a) had no application to the assessment years 1952-53 and 1953-54 and for 1954-55 the re-opening was based only on a change of opinion." Muthiah also contended that section 40 of the Income-tax Act was mandatory and since the Income-tax Officer had made separate assessments on the minors represented by their mother, no further assessment under section 16(3) could be made, the two sections being mutually exclusive. The Tribunal observed that for the first two years section 34(1)(a) applied, that in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociation individually was charged to tax for that year in accordance with, and subject to the provisions of, the Act at any rate or rates prescribed by the Finance Act. "Total income" was defined in section 2(15) as meaning "total amount of income, profits and gains referred to in sub-section (1) of section 4 computed in the manner laid down in this Act." Section 4(1) set out the method of computation of total income ; it enacted : " (1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which-- (a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b) if such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, sub-section (3), provided that in computing the total income of any individual for the purpose of assessment there shall be included the classes of income mentioned in clauses (a) and (b). Sub-section (3)(a)(ii), in so far as it is material, provided : " In computing the total income of any individual for the purpose of assessment, there shall be included-- (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly--... (ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner. " The assessee was bound to disclose under section 22(5) the names and addresses of his partners, if any, engaged in business, profession or vocation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner was unable to give any information. Assuming that there were instructions printed in the Forms of return in the relevant years, in the absence of any head under which the income of the wife or minor child of a partner whose wife or a minor child was a partner in the same firm, could be shown, by not showing that income the taxpayer cannot be deemed to have failed or omitted to disclose fully and truly all material facts necessary for his assess ment. Section 16(3) imposes an obligation upon the Income-tax Officer to compute the total income of any individual for the purpose of assessment by including the items of income set out in clauses (a)(i) to (iv) and (b), but thereby no obligation is imposed upon the taxpayer to disclose t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
