T PANCHAVARNATHAMMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AN important question of law involving the interpretation of S. 18A (8) of the Indian IT Act is raised before us in this reference application.

(2.) THE assessee is the sole proprietrix of a business in lucifer matches run under the name and style of "Gem Match Works" at Sivakasi. For the year ended 29th June, 1947, the previous year in respect of the asst. year 1948 -49, she submitted her return of income declaring that the income was Rs.11,143. The Addl. ITO, Virudhunagar, completed the assessment on 17th March, 1953, and determined the total income of the assessee as Rs. 25,129. On appeal by the assessee to the AAC, Madurai, this assessment was set aside on 11th July, 1955. The ITO was directed by the appellate authority to make a fresh enquiry regarding the real ownership of the match business, whether it belonged to her or to her husband, and to make a further assessment. The ITO made a fresh assessment on 7th March, 1958. He held that the business belonged to the assessee and not to her husband and computed the total income as Rs. 47,586 and levied a tax of Rs. 14,749.93.

(3.) WE shall briefly refer to the relevant portions of S. 18A and r. 48. Omitting unnecessary words, s. 18A, so far as it is necessary to refer to it in the present context, reads as follows :