9911796707
TMI Blog1966 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... But, by an order of this court made on July 15, 1963, the Commissioner was directed to make a proper reference, and in obedience to that order we have now before us a statement of the case prepared by the Commissioner. It appears from the statement of the case that, in the year 1956, there was a partition between the assessee, his wife, Indirabai, and his son, and that at that partition there was an allotment of a property to the wife. The assessee who was assessed as an individual contended that the income of that property should be excluded from his income. But the Agricultural Income-tax Officer and the Deputy Commissioner were of the view that the allotment of the property to the wife was a transfer otherwise than for adequate consideration or in connection with an agreement to live apart within the meaning of section 11(2)(a)(iii) of the Agricultural Income-tax Act, and that the income therefrom should be regarded as the income of the assessee. The other ground on which the assessee resisted the assessment was that the notice under section 18(2) issued by the Agricultural Income-tax Officer for the production of the return was served after the expiry of the relevant financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son, the Commissioner made an incorrect assumption. The family which made a partition in the year 1956 was governed by the Bombay Mitakshara School of Hindu law, and, as pointed out by the Full Bench of the High Court of Bombay in Parappa Ningappa Khaded v. Mallappa Kallappa, one of the basic principles of that school of Hindu law is that, at a partition between her husband and sons, the wife is entitled to a share equal to that of her son. Chagla C.J. said this in that context : " Although it may be true that a Hindu wife has no interest in joint family property and she has no right to challenge the alienation, it is equally true that on a partition between her husband and her sons she is entitled to a share equal to that of her son. It is the basic principle of Hindu law that a Hindu wife is protected and safeguarded on a partition taking place between her husband and her sons, and although she is not recognised as a coparcener on a partition taking place, she is given almost the same right as that of a coparcener because she receives a share equal to that of her son." So, it becomes clear that the postulate upon which the Commissioner depended falls to the ground. But the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there was any transfer of any property to Indirabai on the occasion of the partition between her husband and her son. Moreover, a case falls within section 11(2)(a)(iii) of the Act only when an asset is transferred by the husband to his wife and such transfer is made for no adequate consideration and without there being an agreement to live a part. There could be no such transfer by the husband to the wife when at a partition, to which the husband, the wife and the son are parties, a property is allotted to the wife. The transaction which results in such allotment is one to which the son is also a party and it could not, therefore, be right to think that that transaction involves any transfer of any property by the husband to the wife. The discussion made so far demonstrates that our answer to the first question referred to us should be in favour of the assessee if nothing else could be said about it. But Mr. Narayana Rao, the learned Government Pleader, urges that we should decline to answer the question on the ground that there are no sufficient materials on the basis of which we could answer it. He asked attention to section 30 of the Agricultural Income-tax Act under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in favour of the assessee. The second question consists of two parts. The first part concerns itself with the legality of the notice issued under section 18(2) of the Act on July 15, 1958. That sub-section provides that in the case to which it refers the Agricultural Income-tax Officer may serve, in the relevant financial year, a notice requiring the production of a return. It reads : " In the case of any person whose total agricultural income is, in the opinion of the Agricultural Income-tax Officer, of such amount as to render such person liable to payment of agricultural income-tax for any financial year, he may serve in that year a notice in the prescribed form requiring such person to furnish within such period not being less than thirty days as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) his total agricultural income during the previous year. " The previous year in this case was the year ending on March 31, 1957, and the financial year in which the Agricultural Income-tax Officer could have served a notice under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should say so. Although the notice was issued beyond the relevant financial year, the assessee, nevertheless, produced a return. On the production of that return, the Income-tax Officer proceeded to make an assessment under section 19(3) of the Act. Mr. Narayana Rao, the Government Pleader, urged that the production of the return by the assessee was made under section 18(3), and that if the assessment was based upon the production of the return made in that way, the assessment could not be called in question notwithstanding the delay in issuing the notice under section 18(2). He depended upon section 18(1) which imposes a statutory duty upon every person, upon whose total agricultural income during the previous year agricultural income-tax is charged, to produce a return before the concerned Agricultural Income-tax Officer which should reach him before 1st of June of every year. Mr. Rao made the further submission that the power to issue a notice under section 18(2) was an independent power which did not affect to any extent the statutory duty imposed by section 18(1). Our attention was next asked to sub-section (3) which authorises the production of a return by an assessee even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer accepts. Sub-section (2) empowers the Agricultural Income-tax Officer, if he is not satisfied that the return is complete or correct, to require the assessee to produce evidence in support of the return. Sub-section (3) reads : " 19. (3) On the day specified in the notice under sub-section (2) or as soon afterwards as may be, the Agricultural Income-tax Officer, after considering such evidence as such person may produce and such other evidence as that officer may require on specified points, shall, by an order in writing, assess the total agricultural income of the assessee and determine the sum payable by him on the basis of such assessment. " It is undisputed that the assessment which is called in question in the matter before us is an assessment made under section 19(3) after the service of a notice under section 19(2) on the assessee for the production of the evidence in support of the return. But it was suggested on behalf of the assessee that if the return was produced in response to the illegal notice issued under section 18(2), that return could not be the basis of an assessment under section 19(3) and it was said that no assessment could be made u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from doing so, he invites a best judgment assessment under section 19(4), the provisions of which are not similar to the corresponding provisions of the Indian Income-tax Act, 1922. But, if he does produce a return and even if the production is preceded by a late notice under section 18(2) which could have been ignored, the return has the status of one produced under section 18(3). The act of production, whatever might have prompted it, is what confers that status. The Income-tax Officer had thus the competence to make an assessment under section 19(3). So, the impugned assessment would be entirely above reproach. But we were asked to say that the form of the question referred to us precludes our taking that view and that what that question asks us to decide is whether the assessment "based" on the notice issued under section 18(2) is a good assessment. The argument was that all that we have to decide is whether an assessment which has for its foundation an illegal notice does not also become tainted with illegality and we were asked to say that an assessment based on an illegal notice can never be legal and falls obviously to be quashed. If the question arises in that way, and, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
