TMI Blog1974 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... r, required to keep accounts of the income of the five branches separately. The receivers took possession of the entire estate of the Hindu undivided family on 10th May, 1939. On 27th December, 1939, the civil judge, Allahabad, directed the receivers to hand over possession of the properties allotted to the plaintiff's branch to the plaintiffs themselves. This appears to have been done on 29th December, 1939. From this date onwards the members of the plaintiff's branch were in direct possession of the properties allotted to them. On 23rd April, 1941, in the appeal filed against the final decree this court appointed Sri Kartar Narain Agarwal, advocate, as the receiver over the properties allotted to the plaintiff's branch. The erstwhile joint receivers were discharged so far as the properties of the plaintiff's branch were concerned. Thus, the two receivers jointly managed the entire Hindu undivided family estate from 10th May, 1939, onwards. But with effect from 29th December, 1939, they ceased to manage the properties allotted to the plaintiff's branch. From 23rd April, 1941, this lot of properties was managed by Sri Kartar Narain Agarwal, receiver. For the assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t article 226 of the Constitution was not retrospective. Accordingly, no relief could be given to the petitioners in respect of assessment orders passed prior to the coming into force of the Constitution. The assessment orders for the years 1941-42 to 1949-50 were thus immune from being challenged in the writ petition. The assessment order for the year 1950-51, having been passed on 18th January, 1952, that is to say, after the coming into force of the Constitution, was amenable to writ petition. For this year a sum of Rs. 15,000 was included as income from properties allotted to the plaintiff's branch. This inclusion was illegal. The learned judge held that the receivers were managing the assets of the Hindu undivided family as such. Simply because they were directed to maintain separate accounts in respect of each one of the five lots of properties made no material difference. Consequently, the assessment of the Hindu undivided family income in the hands of the receiver was valid. On these findings the writ petition was partly allowed, the notice dated 26th February, 1958, was quashed, and it was directed that a sum of Rs. 15,000 would be deleted from the assessment order dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the order as such was passed prior to the coming into force of the Constitution. However, if the order was not without jurisdiction, but was, for some reason, defective or illegal, then it could not be reached under article 226 of the Constitution if it was passed prior to the commencement of the Constitution. Thus, the appellants can succeed only if they show that the orders for the assessment years 1941-42 to 1949-50 were non est or void ab initio. An answer to this question is dependant upon the result of the next argument, namely, that the receivers were not managing the properties on behalf of the Hindu undivided family. The appellants have not filed a copy of the order made by the court appointing the receivers. It is thus not possible to know the exact terms of their appointment ; but from the report made by the receivers (vide annexure " 3 " to the writ petition) it appears that the receivers were to manage the entire assets of the Hindu undivided family but they were to maintain separate accounts of the income of each of the five lots. It appears that the final decree passed by the learned civil judge, Allahabad, was taken up in appeal. The appeal was disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the family debts......Clearly then they were not acting on behalf of each individual member of the divided family but on behalf of what may be called the family estate. The receivers were accordingly appointed for the purpose of receiving the income, profits and gains of the persons, who for purposes of assessment to income-tax constituted a Hindu undivided family. Despite the disruption in status, the 'person' within the meaning of that expression in section 41(1) of the Act whom the receivers represented in this case was that Hindu undivided family. The intervention of the receivers in such circumstances did not result in their representation of persons who were no longer liable to be assessed as a Hindu undivided family but were entitled to be assessed to tax each in his individual status. Section 41(1) in express terms directs that the tax shall be levied on the receivers 'in the like manner and to the same amount as it would be leviable upon and recoverable from the person on whose behalf such income, profits or gains are receivable'. In this case the 'person' to be assessed, the person whom the receivers represented, was the Hindu undivided family, and that was the onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N. Basu was managing the properties allotted to the plaintiff's branch, the Income-tax Officer committed an error in assessing such income in the hands of those receivers. But this was an illegality in the course of determining the assessable income. This will not make the proceedings or the entire order non est. The enforcement of the pre-Constitution orders hence could not be validly restrained in the present writ petition. In this view of the matter the enforcement of pre-Constitution assessment orders could not be interfered with under article 226 of the Constitution. The learned single judge was, in our opinion, justified in modifying the assessment order for the year 1950-51 only because that order was passed after the commencement of the Constitution. On behalf of the appellants it was urged that from the assessment orders themselves it is apparent that the Income-tax Officer had knowledge of the partition proceedings. In our opinion there is nothing in those orders which betrays any such knowledge. Moreover, mere knowledge on the part of the Income-tax Officer is neither material nor relevant. Section 25A(1) provided that where at the time of making an assessment und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se circumstances, we are unable to entertain this fresh point. In the end it was urged that even if the receivers had committed default in filing the returns of income within the prescribed time, the Income-tax Officer had no jurisdiction to impose penalty upon the receivers because section 41 only authorises levy of income-tax upon the receiver. Sub-section (1) of section 41 not only provides that " the tax shall be levied upon and recoverable from such receiver in the like manner and to the same amount as it would be leviable upon and recoverable from the person on whose behalf such income, profits or gains are receivable ", but it also provides that " all the provisions of this Act shall apply accordingly ". This clause brings in the various other provisions of the Act, including section 28, which provides for imposition of penalty in the circumstances mentioned in it. If the receiver fails to furnish the return of the total income within time, he incurs liability to imposition of penalty under clause (a) of section 28(1). The Income-tax Officer was within his powers in imposing such penalty. The imposition of penalty was not without jurisdiction. It was also argued that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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