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TMI Blog1971 (8) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ere previously governed by the Madras Nambudiri Act, 1932. Now they are governed by the Kerala Nambudiri Act, 1958. The respondent's family owned large tracts of lands both in Malabar District which was a part of the Madras State till November 1, 1956, as well as in the erstwhile Travancore and Cochin States. Under the States Reorganization Act, 1954, the new State of Kerala was formed consisting of the former Malabar District of the State of Madras as well as the former Travancore-Cochin State. The new State of Kerala came into being on November 1, 1956. Thereafter, the Travancore Cohin Agriculcultural Income-tax Act, 1950, was extended to the former Malabar District with effect from April 1, 1957, by Kerala Act No. 8 of 1957. In the assessment year 1957-58, the assessing authorities assessed Poomulli Mana as an undivided family. That order was qashed by the High Court. On March 30, 1958, the members of the family entered into a registered partition deed under which the family became divided. Thereafter, the respondent ceased to be the karta of the family. Nevertheless, the authorities under the Act issued notices to the respondent under section 17(2) and section 39 of the Act pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed as undivided that a partition has taken place among the members or groups of members of such family or tarwad the Agricultural Income-tax Officer shall make such inquiry thereinto as he may think fit, and if he is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions he shall record an order to that effect : Provided that no such order shall be recorded until notice of the inquiry has been served on all the adult members of the family or tarwad entitled to the property as far as may be practicable or in such other manner as may be prescribed. (2) Where such an order has been passed, the Agricultural Income-tax Officer shall make an assessment of the total agricultural income received by or on behalf of the family or tarwad as such, as if no partition had taken place, and each member or group of members shall, in addition to any agricultural income-tax for which he or it may be separately liable, and notwithstanding anything contained in clause (a) of section 10, be liable for a share of the tax on the incomes so assessed according to the portion of the family or tarwad property allotted to him o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with the provisions of section 18 : Provided that all the members and groups of members whose family property has been partitioned shall be liable jointly and severally for the tax on the total agricultural income received by or on behalf of the family as such up to the date of partition. (3) Where such an order has not been passed in respect of a family hitherto assessed as a Hindu undivided family or which is being assessed for the first time as a Hindu undivided family, such family shall be deemed, for the purpose of this Act, to continue to be a Hindu undivided family. " The amended provision was given retrospective effect with effect from April 1, 1958. Taking advantage of the amendment of section 29, the department again issued a notice to the respondent on June 1, 1964, under section 35 of the Act calling upon him to show cause why he should not be assessed as the karta of his Hindu undivided family for the period from November 1, 1956, to March 31, 1958. It may be noted that until that date the respondent and other members of his former family were being assessed as " individuals " and the tax so levied had been paid. In other words, for the earlier assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Eradi JJ.), the writ petition was allowed and the impugned notices were quashed. Mathew J. was of the opinion that the action taken by the department was permissible under section 29 of the Act as amended. Now turning to section 29 of the Act before its amendment, it corresponded with section 25A of the Indian Income-tax Act, 1922. The scope of section 25A of the Indian Income-tax Act, 1922, came up for consideration both before the Judicial Committee as well as before this court in various cases. It is sufficient if we refer to the decision of this court in Additional Income-tax Officer, Cuddappah v. A. Thimmayya. Therein this court considered the object with which that provision was enacted as well as its scope. Delivering the judgment of the court, Shah J. (as he then was) observed : " Under the Indian Income-tax Act, 1922, as it originally stood, a Hindu undivided family was regarded by section 3 as a unit of assessment, but no machinery was set up for levying tax or for enforcing liability to tax on the members of the family, if before the order of assessment the family was divided. Absence of this machinery was more acutely felt because of section 14(1) which provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent and the other members of his quondam family were assessed as " individuals " from 1958-1964. Those assessments had become final and tax levied on them had been paid. Section 3(1) is the charging section in the Act. That section reads : " Agricultural income-tax at the rate or rates specified in the Schedule to this Act shall be charged for each financial year in accordance with and subject to the provisions of this Act, on the total agricultural income of the previous year of every person. " " Person " is defined in section 2(m) as follows : " 'person' means any individual or association of individuals, owning or holding property for himself or for any other, or partly for his own benefit and partly for another, either as owner, trustee, receiver, common manager, administrator, or executor or in any capacity recognised by law, and includes a firm, or a company, an association of individuals, whether incorporated or not, and any institution capable of holding property. " " Hindu undivided family " as defined in section (2kk) includes a family governed by the Madras Nambudiri Act, 1932. Under the Act. what is brought to tax in an assessment year is the income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a Hindu undivided family " presupposes the existence of the family. That is a condition precedent. Section 29(1) does not permit the assessing authority to create a family by rejoining the divided parts or otherwise. If that is not so, families which had been divided years back can be again resurrected by the assessing authorities for the purpose of the Act. The family referred to in section 29(1) is a family known to law and not a deemed family. The amendment of section 29 has introduced considerable confusion into that section. At the time of the assessment either there is a family or there is no family. If there is a family its liability has to be judged on the basis of the Act. If the family has ceased to exist even before the assessment proceedings started then there can be no family which is being assessed to tax for the first time. Possibly, the intention of the legislature was to bring in the cases of undivided families not taxed in the previous years which were in existence during the whole or part of the previous year but were divided before the assessment proceedings commenced. It is not necessary for us in this case to decide whether that intention has been expressed ..... 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