1967 (3) TMI 45 - HC - Income Tax

Assessee, HUF - income from the business could be not be treated as the income of the HUF - no justification for making a joint assessment of the share incomes of C and his sons. R & O, along with the income from the property received by the HUF

Summary

Issues:
1. Assessment of income from business as individual or Hindu undivided family.
2. Joint assessment of share incomes and income from property.
3. Jurisdiction of Appellate Tribunal to alter status from individual to Hindu undivided family.

Detailed Analysis:

Issue 1: The petitioner, a Hindu undivided family, derived income from a business, and there was a dispute regarding whether the income should be treated as individual income or as income of the Hindu undivided family. The Appellate Tribunal initially held that the income from the business belonged to the Hindu undivided family and not to the individual. However, the High Court disagreed with this view, stating that there was no material to justify treating the business income as that of the Hindu undivided family. The court clarified that the assessments were intended to be made upon the Hindu undivided family, but the Income-tax Officer had erroneously described the assessee as an individual. Ultimately, the court held that the income from the business could not be treated as income of the Hindu undivided family.

Issue 2: The Appellate Tribunal had also made a joint assessment of the share incomes of the petitioner and his sons, along with the income from property received by the Hindu undivided family. The High Court ruled that there was no legal justification for making such a joint assessment. The court emphasized that the assessments were intended for the Hindu undivided family, and there was no basis for combining the share incomes with the property income in a joint assessment.

Issue 3: The final issue revolved around the jurisdiction of the Appellate Tribunal to alter the status of the assessee from "individual" to "Hindu undivided family." The High Court held that the Tribunal indeed had the authority to make such a change in status. The Appellate Tribunal, acting in accordance with the High Court's opinion, directed the Income-tax Officer to adopt the status of the assessee as that of a Hindu undivided family. The court affirmed the Tribunal's jurisdiction in altering the status from individual to Hindu undivided family, thereby resolving this issue in favor of the Tribunal's decision.

In conclusion, the High Court dismissed the petitioner's application for certiorari against the orders of the Appellate Tribunal and the Income-tax Officer. The court highlighted that the questions raised by the petitioner could have been addressed during the appeal process but were not pursued at that stage. Therefore, the court declined to entertain those questions at a later stage, leading to the dismissal of the petition with costs.