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TMI Blog1935 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... laration of unequivocal intention to separate made in writing on the 10th February 1928 on a duly stamped paper followed by a registered deed of partnership dated 30-7-1928. Out of the property which consisted of villages, houses, money-lending and other business and jewellery, there had been already actual division of some immovable property and jewellery at Bikaner. The property in British India remained undivided as before but the disruption of the joint family was evidenced by splitting up the capital accounts of their business into four accounts with equal amounts in the names of four brothers. No alteration in the register of proprietary mutations was made in respect of the villages. It was alleged that the declaration as to partition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n all the circumstances of this case, having regard to the facts that there was no finding at any time to the effect that the Hindu undivided family represented by the assessee had disrupted and that joint family portions, was the income Tax Officer justified in holding that the so-called firm, of which registration under Section 26-A was sought for an refused, was only a subterfuge for the purposes of obtaining a reduction in the liability to income-tax and super tax ?" This reference raised two questions; (1) whether there was no finding at any time to the effect that the undivided family had been divided, and (2) whether the Income Tax Officer was justified in holding that the firm which had been registered for 2 years under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is not contemplated by Rule 6 of the aforesaid rules. It was perhaps to circumvent this difficulty that the Commissioner of Income Tax took the stand that there had been no finding at any time to the effect that the Hindu undivided family had disrupted and that the joint family property had been divided in definite portions. This position was undoubtedly forced on the Commissioner by reason of the terms of sub-Section 3 of Section 25-A of the Income Tax Act, which says when such an order has not been passed in respect of a Hindu family hitherto assessed as undivided such family shall be deemed for the purposes of the Act to continue to be a Hindu undivided family. It is urged that there was no specific order passed under Section 25-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must operate to preclude any fresh enquiry. 7. It is argued by the learned counsel for the commissioner of Income Tax that the firm of which registration was sought was found by the Income Tax Officer to be only a camouflage for obtaining a reduction in the liability to income-tax and super tax and this finding being one of fact cannot be challenged here. The contention would be perfectly sound if the Income tax Officer was competent to go into the question and his finding but it has already been shown that he was precluded from doing so by Rule 6 of the Rules framed by the Board of Inland Revenue as well as by sub-section 3 of section 25-A. It may be conceded that the Income Tax Officer is ordinarily not bound by the correctness of any pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dar, the Income Tax Officer was precluded by sub-Section 3 of Section 25-A and Rule 6 from making a fresh enquiry under Section 25-A(1) which itself had no application to this case as the assessee could not, at the time when the Income Tax Officer was making an assessment under Section 23 for the year 1933-34, be described as a Hindu family "hitherto assessed" as undivided. If as the Commissioner of Income Tax rightly conceded, there could be disruption of the family without actual partition of the property by metes and bounds, then Mr. Subhedars order was correct. In consequences of the division of title, there was nothing to prevent the members of the quondam coparcenary from entering into a contract registered as a firm in 1930 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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