Patna High Court
Gaya Prasad Khandelwal And Ors. vs Commissioner Of Income-Tax on 12 November, 1954
Equivalent citations: AIR1955PAT175, AIR 1955 PATNA 175
ORDER
1. In this case the assessee is a Hindu undivided family consisting of two brothers Gaya Prasad and Sital Prasad and their nephew Damodar Das. For the assessment year 1944-45 there was a claim made on behalf of the assessee under Section 25A(1), Income-tax Act. The claim was that the joint family property had been partitioned among Damodar Das," Gaya Prasad and Sital Prasad in definite shares. The Income-tax Officer rejected the claim made on behalf of the assessee. From the order of the Income-tax Officer the assessee took an appeal to the Appellate Assistant Commissioner.
On 24-4-1950 the Appellate Assistant Commissioner allowed the appeal on the ground that the Income-tax Officer had made assessment on individual members for the share of the income of the Hindu joint family in the respective hands of the coparceners. The order of the Appellate Assistant Commissioner reads as follows:
"The assessment orders of individual members are accordingly inconsistent with the findings under Section 25A. May be that the Income-tax Officer thought that Section 25A order may not stand the test of appeal and may be that by the time the appeal was heard, action against the individual partners may get time-barred and it was evidently due to these circum-stances that the Income-tax Officer with a view to circumvent the limitation provisions or Section 34 (a) assessed the incomes from the joint subjects in the hands of the individuals as could fall to their share in the event of partition being accepted. Whatever may be the reason for the Income-tax Officer for acting in the manner he did, the fact remains that the two orders noted above are Inconsistent. I accordingly set aside the order under Section 25A directing the Income-tax Officer to pass it afresh so as to be consistent with the action subsequently taken by him in the case of assessments of the members."
When the case went back to the . Income-tax Officer he made a fresh enquiry and again rejected the claim made by the assesses under Section 25A on the ground, that the partition between Damodar Das, Gaya Prasad and Sital Prasad had not been established. An appeal was taken by the assessee to the Appellate Assistant Commissioner and the argument on his behalf was that it was not open to the Income-tax Officer to make a fresh enquiry in the face of the direction given by the Appellate Assistant Commissioner on 24-4-1950. This argument was rejected by the Appellate Assistant Commissioner who held that it was open to the Income-tax Officer to make a fresh enquiry and reach a finding that there was no partition among the three members in the manner claimed by the assessee. A further appeal was taken to the Appellate Tribunal on behalf of the assessee but the appeal, was dismissed.
2. In these circumstances the Tribunal has submitted the following question of law for the opinion of the High Court;
"Whether in the circumstances of the case the Income-tax Officer was competent to refuse to record an order under Section 25A(1) of the Act to the effect that the joint family property had been partitioned among. Damodar Das, Gaya Prasad and Sital Prasad in definite portions, notwithstanding the order of the Appellate Assistant Commissioner dated 24-4-1950?"
3. On behalf of the assessee Mr. Tarkeshwar Prasad presented the argument that the Tribunal has misconstrued the order of the Appellate Assistant Commissioner dated 24-4-1950. The argument of the learned Counsel was that properly construed the order of the Appellate Assistant Commissioner means that the case of the assessee with regard to partition among Damodar Das, Gaya Prasad and Sital Prasad was accepted and there was no direction to the Income-tax Officer to make a fresh enquiry on the point. Learned Counsel said that the Tribunal was wrong in holding that the matter was remanded by the Appellate Assistant Commissioner to the Income-tax Officer for passing a fresh order under Section 25A after making enquiry.
We are unable to accept the argument addressed by Mr. Tarkeshwar Prasad as correct. Section 31(3)(e), Income-tax Act, states what are the powers granted to the Appellate Assistant Commissioner in deciding an appeal passed by the Income-tax Officer under Section 25A. Section 31(3)(e) provides that the Appellate Assistant Commissioner may confirm the order of the Income-tax Officer under Section 25A or he may cancel such order. But he has no power to modify or vary the order of the Income-tax. Officer. Should the Appellate Assistant Commissioner cancel the order there are two alternative courses which he may adopt. He may either direct the Income-tax Officer to make further enquiry and pass a fresh order; or lie may direct the Income-tax Officer to make an assessment in the manner laid down in Sub-section (2) of Section 25A.
It is manifest in this case that the Appellate Assistant Commissioner has cancelled the order passed by the Income-tax Officer under Section 25A. It is equally manifest that the Appellate Assistant Commissioner has not expressly directed the Income-tax Officer to make, an assessment in the manner laid down in Section 25A(2). But Mr. Tarkeshwar Prasad claimed that the order of the Appellate Assistant Commissioner should, be interpreted to mean that an order under Section 25A (2) was passed. There are difficulties in accepting this argument. For the Appellate Assistant Commissioner has not discussed the merits of the claim of the assessee under Section 25A(1) in the course of his order. The only point upon which the Appellate Assistant Commissioner laid stress is the inconsistency between the order passed by the Income-tax Officer and his conduct in making the individual assessments as regards the three coparceners. The Appellate Assistant Commissioner has referred to this inconsistency and in the last part of his order has given a direction to the Income-tax Officer "to pass his order afresh so as to be consistent with the action subsequently taken by him in the case of assessments of the members." Literally interpreted this order means that the Income-tax Officer was directed to pass a fresh order under Section 25A(1) of the Act accepting the partition of the family as claimed on behalf of the assessee. But surely that could not have been the intention of the Appellate Assistant Commissioner. In the first place, Section 31(3)(e) does not provide for an order of this description, and, secondly, the Appellate Assistant Commissioner has discussed nowhere in the course of his order the merits of the claim put forward by the assessee on the question of partition.
The order of the Appellate Assistant Commissioner cannot also be taken to mean that the Income-tax Officer was directed to proceed to assess the members in accordance with Section 25A (2) for no such direction is expressly or by implication given by the Appellate Assistant Commissioner. Reading the order of the Appellate Assistant Commissioner as a whole we are satisfied that the interpretation placed on it by the Tribunal is correct and that the intention of the Appellate Assistant Commissioner was to direct the Income-tax Officer to make a fresh enquiry into the claim of the assessee for partition under Section 25A and to record his order after making such enquiry. In our opinion the view taken by the Tribunal as to the interpretation of the order of the Appellate Assistant Commissioner dated 24-4-1950 is the correct view and the question referred to the High Court must be answered in favour of the Income-tax Department and against the assessee. The assessee must pay the costs of this reference; hearing fee Rs. 250.