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TMI Blog1971 (8) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ion suit as a result of the said dispute in this court in February, 1957, being Partition Suit No. 532 of 1957. In course of the said suit an arbitrator was appointed by an order of this court and in order to avoid the disputes the business at 89, Chowringhee Road, Calcutta, was treated according to the petitioner as part of the joint family property. Thereafter, all the parties to the said suit effected a settlement to which all of them agreed. Such a mutual and amicable settlement of the properties including the business was decreed by this court in the said partition suit and the business styled as Messrs. P. B. Sirkar & Sons, at 89, Chowringhee Road, Calcutta, was allotted to the petitioner and the petitioner was given possession in June, 1958, by the receiver appointed by the High Court and since then he had become the sole proprietor of the concern. According to the petitioner the said joint family affairs used to be controlled from 131 /B, Bowbazar Street, Calcutta, which was also the family residence where Smt. Sarashi Bala Sirkar, his mother, used to reside. It has been stated that Smt. Sarashi Bala Sirkar died in or about February, 1966. It was further stated in the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily after its dissolution could not be taxed. It was further urged that after a suit for partition had been filed, the Hindu undivided family had been dissolved. Counsel for the Revenue, on the other hand, contended that in the case of families governed by the Dayabhaga system of Hindu law the dissolution of the Hindu undivided family did not take place merely on the institution of a suit for partition or declaration of shares of the parties. In order to effectuate a severance of a Hindu undivided family under the Dayabhaga School of law, something more was required, it was urged. In the context of the facts of this case this broad contention is not necessary to be decided. In the instant case the assessment was sought to be re-opened in respect of a Hindu undivided family which had been admittedly a joint family. Counsel for the petitioner drew my attention to the Division Bench judgment in the case of Srilal Bagri v. Commissioner of Wealth-tax to which I was a party. That was a case under section 20 of the Wealth-tax Act. That was also a case where assessment was sought to be made in respect of the assessment year in which a Hindu undivided family had disrupted. In the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thod by which such assessment can be made. Section 297, clause (d)(ii) of the Income-tax Act, 1961, provides that in respect of any income chargeable to tax which had escaped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of the said Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150, be issued with respect to that assessment year and all the provisions of said Act shall apply accordingly. Therefore, in respect of the relevant assessment year the Act of 1961 has to be applied. In this connection reference may be made to section 171 of the Income-tax Act, 1961. The relevant portion ,of section 171 provides as follows : " 171. Assessment after Partition of a Hindu undivided family.--(1) A Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family. (2) Where, at the time of making an assessment under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of any period up to the date of the partition, whether total or partial, of a Hindu undivided family as they apply in relation to the levy and collection of tax in respect of any such period." This section is a machinery section and not a charging section and it has been so held in numerous decisions. It is not necessary for me to refer to the same. This section corresponds to section 25A of the Indian Income-tax Act, 1922, with certain amount of variation. It is also not material for me to note the variation, except the variations in sub-section (6) of section 171, which is a new introduction. As mentioned hereinbefore, under section 171(2), in case of an assessment made under section 148, of the Income-tax Act, 1961, the provisions of section 139 are attracted and it would be an assessment, therefore, made under section 143 or section 144 of the Income-tax Act, 1961. Reference may be made to the decision in the case of Lakshminarain Bhadani v. Commissioner of Income-tax. There the Supreme Court was concerned with the case of reassessment proceedings under section 34 of the Indian Income-tax Act, 1922, read with section 25A of the said Act. There Kania C.J. observed as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiry mentioned in subsection (2). Sub-section (4) also deals with similar enquiry and subsection (5) also deals with the said enquiry. Sub-section (6) of section 171 provides: " Notwithstanding anything contained in this section, if the Income-tax Officer finds after completion of the assessment of a Hindu undivided family that the family has already effected a partition, whether total or partial, the Income-tax Officer shall proceed to recover the tax from every person who was a member of the family before the partition, and every such person shall be jointly and severally liable for the tax on the income so assessed. " In this case, as mentioned hereinbefore, no assessment has been made. In this case also, this Hindu undivided family had never been assessed before. Sub-section (7) and sub-section (8) of section 171 deal with the collection and imposition of liability of the members assessed. Therefore, in order to attract the machinery or the method provided by section 171, it has to be a family which prior to the relevant claim for partition was assessed to tax. In this connection reference may also be made to sub-section (4) of section 170 which is in the following terms : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indu undivided family which had disrupted and the said machinery provides only in the case of " families hitherto assessed as undivided ", it is difficult to find any machinery to assess a Hindu undivided family which had never been assessed before, after it had disrupted. A Hindu undivided family is a taxable entity and is a juristic person. It can only be proceeded against in the manner provided in the Act or under the general principles of the Hindu law after the disruption of the family. The general law does not provide for any machinery to determine the liability of the individual members of the undivided family before disruption. The income-tax Act, 1961, and the Indian Income-tax Act of 1922 do not also provide that machinery. The position in my opinion would become clear if reference is made to some other sections. Under section 2(31), the definition of the person includes a Hindu undivided family. Section 282 provides for service of notice in the case of proceedings against the Hindu undivided family. It has been stated that in the case of a Hindu undivided family notice may be forwarded to any member of the firm or the manager or an adult member of the family. Except to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make a dead person alive to receive a notice of the department. Leaving aside this aspect of the matter, the question is, was there any reasonable attempt to serve the notice ? Under section 282 of the Income-tax Act service has to be in the manner as provided in the Code of Civil Procedure. Under the Code, the service can be made by affixation but either after reasonable attempts had been made to find the assessee but could not be found or after the assessee had refused to accept service. What is reasonable attempt must of course be determined on the facts and circumstances of each case. Counsel for the petitioner drew my attention to the decision in the case of Commissioner of Income-tax v. Thayaballi Mulla Jeevaji Kapasi, where the Supreme Court observed that the service of notice prescribed by section 34 of the Indian Income-tax Act, 1922, for the purpose of commecing proceedings in reassessment was not a mere procedural requirement ; it was a condition precedent to the initiation of proceedings for assessment under section 34. If no notice was issued or if the notice issued was shown to be invalid, then the proceedings taken by the Income-tax Officer would be illegal or vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentations, his obvious remedy was to appeal against the order under section 33B of the 1922 Act. The service of the notice under section 33B of 1922 Act is not mandatory. What is mandatory is that the assessee should be given reasonable opportunity. How that reasonable opportunity should be afforded to the assessee would depend upon the facts and circumstances of each case and as to whether reasonable opportunity has been granted or not to a particular assessee in a particular case the Supreme Court observed that the Income-tax Act provided the machinery, resort to which must be made in the first instance. Here, the service of the notice under section 148 is mandatory and is a condition precedent to the initiation of the proceeding. Here also if there was any dispute about the statement made by Promode Pal, the process-server, it might have been urged that the writ jurisdiction was not the proper forum to agitate the dispute. But accepting the statements of the said process-server it is manifest that no reasonable attempts had been made to find out the assessee. Upon that finding it cannot be said that there was any disputed question of fact to be gone into. In the premises, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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