RAGHAVANUNNI MOOPIL NAYAR Vs. AITO

JUDGEMENT

(1.) This is an instance, it appears to me, of the taxing authorities as well as the assessee groping in the dark without knowing each other's rights in regard to the assessment. The assessment order impugned is Ext. P1 and is for the years 1959-60 and 1960-61 and has imposed agricultural income tax and supertax as well as surcharge on the supposed Hindu undivided family of the petitioner who is said to be its head. It appears to me that the members of this family unequivocally decided to effect a severance of interest among themselves (that is the contention of counsel for the petitioner) and it is said it is evidenced by a written agreement by which agreement the question of division of the properties by metes and bounds was left to arbitrators. Somehow, this agreement was not implemented and, therefore, it is said, some of the members of the family filed a suit for partition. A receiver was appointed in that suit and he took possession of the properties on 12-9-1960. The fact of there being a suit is admitted and it was also not denied that the properties are in the possession of the receiver from 12-9-1960. However, a preassessment notice dated 5-1-1962 was issued to the petitioner as the head of the family and that notice indicated the basis on which the assessing authority proposed to assess the Hindu undivided family. The petitioner objected to this procedure and contended that there was no family, that the unit was not the Hindu undivided family, that the family had become disrupted, that the members attained the status of tenants in common and that, therefore, the proposal to assess the unit as a Hindu undivided family was unwarranted. This contention specifically raised in the objection dated 27-11-1962 has not been adverted to, much less considered, by the authority who passed Ext. P1 order. No doubt, S.29 of the Agricultural Income Tax Act reading as under

(2.) In this connection, I may refer to the decision of this Court in Srilalan v. Inspecting Asst. Commissioner of Agrl. Income Tax and Sales Tax (1958 KLJ 435), which proceeds on the basis that even if S.29 is not applicable, the assessment should be on the basis of S.3(5). The assessing authority will take note of this decision in future "proceedings.

(3.) In any view of the matter, the imposition of supertax on this family is not warranted in view of the fact that the total income is only Rs. 50,000 and assuming that it is S.3(3) and not S.3(5) that should be applied, even then the share of the income of five members and the rate applicable thereto for supertax will be nil. I therefore quash Ext. P1 and make it clear that in any view of the matter, no supertax or surcharge thereon can be imposed on this family.