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TMI Blog1954 (4) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he had been assessed wrongly as a member of a joint Hindu family and that he was and had been, as a matter of fact, separate from his nephews, the sons of Amba Prasad. His claim was, however, rejected and he was continued to be assessed in the years 1938-39, 1939-40 and 1940-41 as a member of the joint Hindu family. During the assessment year 1941-42 he again raised the same plea and filed an application under Section 25A of the Indian Income Tax Act, 1922. In that application he mentioned that he was not a member Panna Lal and Hira Lal who were the sons of Amba Prasad, that he had never been a member of a Hindu undivided family with them and that the assessment therefore "should be separate on the applicant along with his son". This plea was rejected by the Additional Income Tax Officer who held that under Section 25A (3) the assessment must continue to be made as a Hindu undivided family unless an order under Section 25A(1) was passed and the Income Tax Officer was satisfied that the joint family property had been partitioned among the various members or groups of members in definite portions. The Income Tax Officer, however, held that the entire joint family prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms that there has since then been a partition, is whether the joint family property has or has not been divided among the members in definite portions. If he is satisfied that there has been such a partition then he records an order and all the necessary consequences then follow. In the case before us in the order of the Appellate Tribunal dated the 20th July, 1942, the Members of the Tribunal held as follows : "In the case with which we are dealing there is admittedly a portion of the property which is still to be divided although the property in question has been held to be owned in common and not as coparcenary property." In the statement of the case the Members of the Tribunal seem to have scrupulously avoided the words "joint family property". They have, no doubt, used the words "the property held jointly by Baij Nath group and another group", but that the property may never have been joint family property and may have been property held in common. Learned counsel for the Department has urged that if once an assessment has been made as a Hindu undivided family then the entire property, the income of which was treated as the income of the Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty that in fact joint family property by the Income Tax authorities, even though it was not in fact joint family property. The argument of learned counsel is that as the entire property of the assessee Baij Nath and his nephews, the application was bound to fail under Section 25A(1) and that it is unnecessary to call for a fresh statement of the case from the Appellate Tribunal. We have carefully considered the decision, In re Kishan Chand Khanna and Sons, and, with the greatest respect to the learned Judges who decided the case, we find it very difficult to follow that decision. The decision in that case could be based only on some rule of estoppel or res judicata. The rule of estoppel or of res judicata is, if at all, of very limited application in these Income Tax cases. Learned counsel for the Department had to admit that he could not say that there was any question of res judicata and when we put to him the other alternative he was not able to formulate how any question of estoppel could probably arise. The mere fact that in one particular year an item of property was treated as the property belonging to the Hindu undivided family would not debar a member of the family fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or on account of some provision of law it was not capable of partition into definite portions. Could it be said in such a case that the requirements of the section had not been fulfilled ? It is one of the elementary principles of interpretation that an Act should be interpreted in a reasonable manner and not in such a way as to require a person to do what is impossible. In such cases if a question arises, the Tribunal may have to consider whether in substance and in fact the family property has been divided. It would not, however, be proper for us to try to interpret Section 25A (1) of the Act in the abstract without knowing the facts whether there is any joint family property which is still undivided and, if so, what is the nature thereof. In most cases the findings of fact recorded by the Tribunal would answer the question whether the requirements of Section 25A (1) have or have not been fulfilled. As we have said, it may be that in some special case a difficult question of law may arise, for example, where every bit of property has been divided, but there is an heirloom, say an old family picture, an old family gun or a sword which it is not possible to divide in different po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order....... We, therefore, think that this case must go back to the Appellate Tribunal for a clear statement of the case and the questions of law for the decision of this Court which arise out of the order of the Appellate Tribunal passed under Section 33 (4) must be clearly formulated." We, therefore, proceed to draw up another statement of case in pursuance of the above directions. 2. The present reference arises out of the Tribunals order, dated 20th July, 1942, in 25 A. P. A. No. 1 (C. P.) of 1942-43, in connection with the assessment year 1941-42. The assessee had been claiming partition since the assessment year 1938-39 and has been constantly applying under Section 25A of the Income Tax Act for assessment after recognition of the partition of Hindu undivided family. However, he continued to be assessed in the status of a Hindu undivided family. In the assessment year 1941-42, he again submitted an application under Section 25A claiming partition amongst the members of the family and praying for an order under Section 25A. This prayer was based mainly on the judgment dated 22nd September, 1941, of the First Civil Judge, Meerut, in suit for partition brought by L. Chu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... longed to defendant No. 3. Defendants Nos. 3 and 4, i.e., Munnalal and his son Parmeshwar Saran, filed another statement showing that the family was joint and the plaintiff No. 1 and defendant No. 1 were the managers of the family and that the defendants were entitled to 1/10th share on partition. As regards the cloth shop it was urged that there was no shop in the name of Munnalal and brothers, that the cloth shop was started by the defendant No. 3 in the name of one Dharam Prakash by borrowing money from him and it had nothing to do with the family assets. There were other pleas which are not relevant for the purpose of this reference. The defendants Nos. 5 to 7, i.e., Pannalal, Hiralal, and Jai Prakash, who were the other brothers of plaintiff Chunnalal, filed a third written statement alleging the property to be joint family property and raising certain pleas which were more or less personal in their nature. Of these pleadings, the learned Civil Judge framed several issues, of which issues Nos. 1, 2, 3 and 9 are only mentioned for the purpose of the present case. These issues are as follows :- (1) Are the plaintiffs and the defendants members of a joint Hindu family ? (2) Is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purposes of assessment, the family must be treated as a Hindu undivided family till such time as an order under Section 25A was obtained and as it was not shown by the assessee that actual partition of the joint family property had taken place under the order of the Civil Judge, no order under Section 25A(1) could be passed. 5. The assessee appealed against the order to the Appellate Assistant Commissioner, who upheld the order of the Income Tax Officer, and dismissed the appeal by his order dated 10th March, 1942. Against the Appellate Assistant Commissioners order, the assessee preferred an appeal to the Appellate Tribunal. Before the Tribunal, the Department relied on the ruling on the Oudh Chief Court in Chhedi Lal Nand Kishore v. Commissioner of Income Tax, C. P. & U. P. in support of the proposition that under section 25A (3) of the Income Tax Act, the business, the profits of which have hitherto been assessed as income of a Hindu undivided family must be deemed to continue as a joint family business until an order under Section 25A had been made. Relying upon this authority, the Tribunal held that since there admittedly was an undivided property, the income of which had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty has been clarified as house property. The house property was dealt in the partition suit in list B and the cloth business as item No. 1 in list C. The decision of the Civil Judge in regard to the cloth shop was that the plaintiff had a 1/5th share in it and as regards the house property in list B the operative part of his order said that in certain houses, the plaintiffs share was 1/10th and in others, the plaintiffs share was 1/5th. Out of the movables, he declared some items to be divisible and held that the rest of the properties shall not be divided. 9. From the above narration of the facts, it is clear that according to the findings of the Civil Judge, there is not ancestral or joint Hindu family property, but only joint property, in some of which the applicants share has been specified but not actually partitioned. In the cloth business, the plaintiff has been given 1/5th share, but no actual partition has yet taken place. The family has continued to be assessed as a Hindu undivided family. The questions of law that therefore, arise out of the Tribunals order for reference are :- "1. Whether in the circumstances of the case as the applicant had allowed himself t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed him in previous years. He prayed that the assessment "should be separate on the applicant along with his son Ram Nath". The application was dismissed by the Income Tax Officer on the ground that the assessment must continue in the same status unless it could be shown that the property had been divided by meters and bounds. The exact words used by the Income Tax Officer in the order, dated the 10th of December, 1941, were as follows :- "The fact whether the family was or was not joint is not relevant. As the assessment till 1940-41 has been made in the status of a Hindu undivided family, the assessee has to prove his claim under Section 25A this year......" Thus it was held that if the assessment had been made in the status of a Hindu undivided family, the assessee would have to be assessed in the same capacity unless an order under Section 25A was passed by the Income Tax Officer and an order under Section 25A could be passed only if the assessee could prove that the joint family property had actually been divided among the various members. The Income Tax Officer further held : "There has been no partition within the meaning of Section 25A of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the learned Civil Judge was that Baij Nath was not a member of a Hindu undivided family with the plaintiffs and defendants 3 to 7 though the plaintiffs and defendants 3 to 7 were members of a joint Hindu family. The finding of the learned Civil Judge on the second issue was :- "There was no ancestral nucleus worth the name and on this ground the property in dispute cannot be treated to be ancestral. On the score of blending also, I cannot treat the property to be ancestral." When the reference was put up before a Bench, of which one of us was a member, it was found that the Tribunal had nor recorded a finding whether there never had been a Hindu undivided family to which Section 25A could be made applicable. In the absence of findings on questions of fact, this Court was not able to answer the question referred to this Court for decision and directed the Income Tax Appellate Tribunal to find the facts and make a fresh statement. The Income Tax Appellate Tribunal has, in compliance with the order, submitted a fresh statement of the case and has formulated the questions for our decision. The questions now formulated are as follows :- "1. Whether, in the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt remarked :- "It had not been proved that Ghasiram and Phulchand continued as members of the joint Hindu family after the separation of Bhagwan Das". As regards the properties, their Lordships held :- "In view of our finding that Ghasiram and Phulchand were not members of a joint Hindu family, all properties separately acquired in the name of Ghasiram or Baij Nath have to be declared as their separate properties". Except as regards houses and some other movable properties, their Lordships affirmed the decision of the trial Court. As was pointed out by this Court in 1946, it is not for this Court in a reference under Section 66 of the Indian Income Tax Act to take additional evidence or refer to a judgment whether of the civil Court or of the Supreme Court to ascertain facts on which the question referred have to be answered. In view, however, of the fact that the reference was made as far back as 1943 and though the case was once sent back to the Tribunal, the statement of the case now submitted is again just as unsatisfactory as the previous statement, counsel have requested us to consider the findings recorded by the Supreme Court as the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that it had now been established that the assessee had, in the previous years, been wrongly assessed as a Hindu undivided family with his nephews, Section 25A of the Act was applicable. This Court, in its previous order of the 8th of May, 1946, pointed out :- "Section 25A refers to a case where a member of a Hindu family hitherto assessed as undivided applies to the Income Tax Officer, at the time of making an assessment under Section 23, that a partition has taken place among the members of such family and, therefore, the family should no longer be treated as a Hindu undivided family". It was further said in that order :- "As we read Section 25A(1), it does not seem to us to apply to a case where a member takes up the position that he had never been a member of an undivided family and, therefore, there was not question of partition or that he had become the sole survivor of a Hindu undivided family and the property which had once belonged to the joint family had become his exclusive property". Our answer, therefore, is that Section 25A of the Indian Income Tax Act did not debar the Income Tax Officer from going into the question whether Baij Nath h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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