TMI Blog1936 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... er notice duly served under Section 34 upon the precedesor, is the company liable to be assessed without further direct service under the section upon the company ? (5) Was it possible in law for the Income Tax Officer to hold that the assessee had not discharged the onus upon him of establishing his claim to deduction of ₹ 2,748 (credited to accounts of members of the family and their wives) as being interest upon capital borrowed within Section 10(2)(iii) ? (6) Were the salary payments attributed to members of the income-earning Family, a proper deduction from the income assessed in the charge of the successor under Section 26(2) ? (7) Was it possible in law for the Income Tax Officer to hold that the assessee had not discharged the onus upon him of establishing his claim that the amount of ₹ 1,211 at the debit of Narain Singh fell irrecoverable in the previous year ? (8) In the matter of interest from mortgage in account Rani Harnam Kaur appealed upon grounds 12, 13 and 14, was the contention raised by affidavit, filed at hearing on July 10, 1935, out of the ordinary time limit provided in Section 30(2) validly refused as being a new contention, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was made on the same date and the assessee was for the purposes of the Income Tax of the assessment year treated as a limited company, having succeeded to the business of the Hindu undivided family andthus being liable to be assessed as a limited company presumably under the provisions of Sub-Section (2) of Section 26 of the Income Tax Act. From this order the assessee preferred an appeal to the Assistant Commissioner raising various points of law arising from the case. The Assistant Commissioner with slight modification in the estimate of income upheld the order of the Income Tax Officer. The assessee then moved the Commissioner who as stated above has eventually referred the questions of law as set forth above with his opinion thereon. The first two questions of law referred to us can be disposed of together. They rest on the determination of the main question whether in face of the finding of the Income Tax Officer that the Hindu undividend family was still in the process of partition and had not disrupted, the assessee could be treated as a limited company for the purpose of assessment. The assessee contends that Sub-section (3) of Section 25-A is conclusive on this matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or vocation has been succeeded in such capacity by another person. Person as defined in clause (9) of Section 2 of the Income Tax Act includes a Hindu undivided family, and Person as defined in the General Clauses Act 1897 includes any company, or association or body of individuals, whether incorporated or not. Considering that in the matter of the interpretation of statutes, our first effort shoul be to reconcile the various provisions of an enactment with one another and to assign to the clear words of a statute the meaning which they ordinarily carry and thinking at the same time that the Legislature has not been guilty of redundance of expression or repetition of subjects, the irresistible conclusion to which we are driven is that so far as the scheme of the Act goes, (a) each section deals only with the matters specified therein and goes no further, and (b) each section completely covers the matter with which it deals. Section 25-A in our view applies only to those cases where the questin involved is one of pure and simple disruption of a Hindu undivided family unattended by conversion or transformation into a new entity. It is this account that sub-section (1) of Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced by a limited Company. The matter, however, does not end here. It is contended on behalf of the Commissioner that the family in this case can still be treated as having been succeeded by a limited Company to the extent that it is admitted to have been replaced by a limited Company. He urges, as remarked before, that partial succession is not unknown to law and refers in this connection to Kalumal Shorimal v. Commissioner of Income Tax, V. R. S. A. R. Arunachalam Chettiar v. Commissioner of Income Tax, Best Co. v. Commissioner of Income Tax, and Commissioner of Income Tax v. Sind Light Railway. In Kalumal Shorimal v. Commissioner of Income Tax on a partion of a Hindu undivided family the assessee got the family business as his share, the other coparceners, the assessees sons, relinquishing their rights therein and starting a separate business of their own. The assessee continued to carry on the business under the old name and style, retaining the account books with the right of realising the businesses outstanding amounts. In those circumstances, it was held by a Division Bench of this Court that there was no continuance of the business within the meaning of Section 25, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention, nor has he developed this point in the course of his arguments, while in connection with his second contention he has relied on a recent decision of the Madras High Court in O.P. No. 285 of 1935, Thontepu Chinna Pullayya v. Commissioner of Income Tax, as well as Jupudi Kesava Rao v. Commissioner of Income Tax. The question that was referred to the Special Bench in O.P. No. 285 of 1935 was whether when all the members of a Hindu undivided family after separation and partition constitute themselves into a firm in order to continue the business hitherto carried on by an undivided family, assessment of the total income of the undivided family up to the date of separation and partition should be mde (a) on the firm carrying on the business as successors of the undivided family within the meaning of Sec. 26(2) ofthe Income Tax Act, or (b) on the members aforesaid as if no separation or partition had taken place according to Sec. 25-a of the Income Tax Act. Relying on a previous Judgment of their own court reported as Jupudi Kesava Rao v. Commissioner of Income Tax, the learned Judges held that the word succession as used in Section 26(2) connoted a transfer of ownership which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within the meaning of Section 26(2) and hence was not liable to be assessed thereunder. Though the authorities cited for the Commissioner decided on not afford any help to him, yet on general principles we are disposed to agree with the contention raised by him that partial succession to a Hindu undivided family is not repugnant to any notion of law. Under Hindu law, a Hindu undivided family can through its Karta alienate a part of its property to stranger without affecting its own status in any manner. The alienee can even claim partition on the basis of his own acquisition. If an alienation an be made to a stranger we not consider that a replacement by a stranger cannot take place. As already observed, a Hindu undivided family is a different person altogether from a Company; its rights, its obligations, its privileges and its constitution are altogether different from the rights, obligations, privileges and constitution of a Company, and as it is possible under the Inome Tax Law that a person conducting several businesses may be succeeded in a particular business which is divisible from the other businesses of his, a Hindu undivided family as a person can in the matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 22 or section 34. Apart from the fact that the objection was not raised at the time of the assessment and could not be raised before the Assistant Commissioner as a matter of right, there is no substance in it even on the merits. The Income Tax Act does not contemplate any fresh notice to be served upon the successor, inasmuch as the proceedings once started against the predecessor continue against the successor even if the predecessor has ceased to exist. In the absence of any clear direction to the contrary, no obligation is imposed upon the department in this behalf. We accordingly hold that no fresh notice was necessary in the case of the successor or who will now be liable as such to the extent indicated above. Question Nos. 5 and 7 are questions of fact and cannot be raised before us. The only objection covered by these questions is that the Income Tax Officer was not right in holding that the assessee had failed to discharge the ouus that lay upon him. There is abundant authority for the proposition that the question whether a party has discharged the onus that lay upon him. There is abundant authority for the proposition that the question whether a ..... 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