TMI Blog1971 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... f which those appeals were brought were not properly issued. To get over that difficulty, the Commissioner of Income-tax applied for and obtained special leave to appeal against the judgment of the High Court of Assam and Nagaland. The appeals filed on the basis of the special leave granted are Civil Appeals Nos. 1426 and 1427 of 1971. At present we are only concerned with those appeals. The judgment under appeal is one rendered in a reference under section 66(1) of the Indian Income-tax Act, 1922 (to be hereinafter called the Act ). The Income-tax Appellate Tribunal, after stating the case, referred the following six questions for the opinion of the High Court : 1. Whether, on the facts and in the circumstances of the case and up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the case, the Tribunal was justified in holding that the Hindu undivided family of Hanutram Ramprotap was not a shareholder in M/s. Shyam Sunder Tea Company (P.) Ltd. up till August 16, 1955 ? 6. Whether, on the facts and in the circumstances of the case, in computing the accumulated profits of Messrs. Shyam Sunder Tea Co. (P.) Ltd. within the meaning of section 2(6A)(e), the Tribunal acted rightly in refusing to allow, (a) deduction in respect of loans advanced by the said company to the erstwhile family of Messrs. Hanutram Ramprotap which amounted to ₹ 3,60,989 as at December 31, 1954, and increased to ₹ 3,80,567 as at August 16, 1955, and written off at the end of the year 1955 ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily. On February 29, 1960, the Income-tax Officer passed an ex-parte assessment order on him as individual under section 23(4) without issuing any notice under section 23(2). On March 22, 1960, Saharia filed an application under section 27 to cancel the ex parte assessment. On December 16, 1960, the Income-tax Officer set aside the order of assessment made on February 29,1960. Therein, he stated that fresh assessment will be made in due course. An assessment was made on the Hindu undivided family on February 6, 1961, on the basis of the return submitted on October 29, 1959. Prima facie this assessment is barred by section 34(3) which says : No order of assessment or reassessment, other than an order of assessment under section 23 to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the reassessment was not made under that section. To recapitulate the facts which we have earlier mentioned, the return submitted by Saharia was in his capacity as the karta of his family. The status shown in the return is Hindu undivided family. He filed no return in the status of an individual. The same person can be taxed both as an individual as well as the karta of his family. The two capacities are totally different. The liability to be taxed as an individual is different from the liability to be taxed on behalf of his Hindu undivided family. The individual and the Hindu undivided family are totally different units of taxation. They are two different assessees. The ex parte order was made on February 29, 1960, against Sahari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his individual capacity or as the karta of the family. That controversy has not been gone into by the High Court. At present we are proceeding on the basis that he held those shares as the karta of his family. Clause(e) of section 2(6A) says : 'Dividend' includes.... (e) any payment by a company, not being a company in which the public are substantially interested within the meaning of section 23A, of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either case possesses accumulated profits. It is not disputed that M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the High Court erred in its answer to the second question. Hence, that answer is discharged and in its place we answer that question in favour of the department. But, we hasten to, make it clear that in respect of the loan granted in the account year previous to the assessment year 1955-56, the same cannot be brought to tax, as assessment in respect of that year was not made within the time prescribed. In the result Civil Appeals Nos. 1956-57 of 1969 are dismissed as being not maintainable. There will be no order as to costs in those appeals. So, far as Civil Appeal No. 1426 of 1971 (appeal relating to assessment year 6 concerned, it is also dismissed but Civil Appeal No. 1427 of 1971 (appeal relating to assessment year 1956-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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