TMI Blog1965 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... he said order was passed under section 25A, assessments were made on some of the coparceners of the erstwhile Hindu undivided family for the assessment years 1947-48 onwards. The two coparceners put forth a claim before the Income-tax Officer that the business styled Hariram Shriram which was previously being carried on by the assessee was after the disruption carried on by them as partners in pursuance of an agreement of partnership. A claim for registration of the said partnership firm was also made before the Income-tax Officer who allowed the registration of the firm under section 26A of the said Act. It appears that in 1955 the Income-tax Officer received some information that the Hindu undivided family was really subsisting and had not, in fact, been dissolved. He, therefore, initiated proceedings under section 34 of the said Act for the assessment year 1947-48 on the ground that the Hindu undivided family was really subsisting and the order under section 25A was ineffective and bad in law having been obtained by misleading the Income-tax Officer. He also issued a notice to the assessee under section 22(2) with respect to the assessment year 1952-53. In compliance with the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 952, or not. The contention advanced before the Appellate Assistant Commissioner regarding the applicability of section 34 was repeated before the Tribunal. The Appellate Tribunal by its order dated 15th September, 1960, held that, (a) the income sought to be assessed in the hands of the family had already been assessed in the hands of the coparceners of the family who carried on business as firm, Hariram Shriram, and (b) the Income-tax Officer having himself recognised the disruption of the Hindu undivided family under section 25A it was no longer open to him to reconsider whether the said order had been properly passed or not as the succeeding Income-tax Officer could not sit in judgment over the order passed by his predecessor and review the same. The Tribunal accordingly held that the proceedings under section 34 were bad in law. In these circumstances the following question of law has been referred to this court under section 66(1) of the said Act at the instance of the Commissioner of Income-tax: Whether it was open to the Income-tax Officer to initiate proceedings under section 34 of the Indian Income-tax Act against the assessee holding that its status was that of a Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith respect to the year 1952-53, make an assessment recognising the order under section 25A as valid? When confronted with this situation, Mr. Hardy submitted that it would be open in such circumstances to the Income-tax Officer to make an assessment for the year 1952-53 and then take proceedings under section 34. Apart from the fact that we are doubtful whether section 34 would in those circumstances apply we feel that that could not have been the intention of the legislature. It may be noticed that if an assessee fails to furnish a return of his total income, as required by a public notice under sub-section (1) of section 22 and such failure results in no assessment having been made at all, proceedings may be taken under section 34 in a subsequent year although no individual notice under section 22(2) may have been served on the assessee in the relevant assessment year, but where an assessee who has not been served with an individual notice under section 22(2) voluntarily files a return even after the expiry of the assessment year, no proceedings can be taken under section 34. Similarly no proceedings under section 34 can be taken if an assessee files a return in response to a no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f two years, the Income-tax Officer may have no remedy at all since the powers under section 33B could be exercised only within two years. That may be so but the same result would follow if such an information is received by an Income-tax Officer after the expiry of the period of limitation prescribed for the applicability of section 34. Mr. Kirpal, the learned counsel for the assessee, submits that the moment the order under section 25A is passed, the Hindu undivided family ceases to be an assessee for the purpose of the said Act and, consequently, no action under section 34 can be taken. He further draws our attention to rule 6B of the Rules framed under the Indian Income-tax Act and submits that, although an order under section 26A, registering the firm, has to be passed from year to year, a special provision has been made by the said rule for cancellation of the certificate so granted. He submits that from the said special provision it should be inferred that the legislature intended to confer no power to review an order under section 25A. We need not pronounce upon the validity of these arguments since we are of the view that no power exists under section 34 to ignore or nu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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