DEVENDRA PRAKASH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THESE three petitions under article 226 of the Constitution raise common points and can be conveniently dealt with by a common judgment.

(2.) THE facts giving rise of the petitions are there was originally a Hindu undivided family carrying on business under the name and style of Hirday Narain Yogendra Prakash. Hirday Narain was the father and Yogendra Prakash was his son from his first wife. On September 30, 1949, there was partial partition in respect of the business and with effect from October 1, 1949, a partnership was constituted by the father and the son, Yogendra Prakash. To the benefits of this partnership out minor sons of Hirday Narain from his second wife were admitted. Three of these minor sons are petitioners in these writ petitions, Devendra Prakash in Petition No. 841, Gajendra Prakash in petition No. 842 and Bhupendra Prakash in Petition No. 843. It appears that the firm was reconstituted with effect from July 12, 1952, as on the preceding day Hirday Narain, the father, ceased to be a member of the firm. It appears that meanwhile Surendra Prakash, the fourth minor son, had become a major. In consequence of the reconstitution of the firm, the accounting period relevant to the assessment year 1953-54 with which we are concerned in these petitions was split up into two partitions, one comprising of the period from the commencement of the accounting period on October 10, 1951, to July 11, 1952, until which date Hirday Narain, the father, continued to be a partner in the firm and the other period commencing subsequently to Hirday Narain ceasing to be a partner from July 12, 1952, to September 27, 1952, the end of the accounting period. In due course on March 28, 1956, an assessment order was made under section 23(5)(a) against the firm in respect of the assessment year 1953-54. This order has not been made an annexure to the petition. An extract from that order has been quoted in paragraph 3 of the petition. It is not possible to say whether the extract represents the correct state of affairs which is necessary for the purpose of disposal of the petition. I cannot help observing that it is an entirely wrong practice to quote extracts from orders which form the backbone of a petition and not annex to the petitions complete copies of the orders from which extracts are sought to be relied on. To say the least this creates a suspicion against the bona fides of a petitioner. In the absence of complete copies of orders or documents it is not possible for the court to come to the conclusion that if the complete document had been produced before the court it might not have yielded a different result than that contended for on the basis of the extract from such order or document. Be that as it may, it appears from this extract that the apportionment of the income of the firm amongst the various partners of the firm was made for the two periods separately in specific sums of monies mentioned against the names of the different partners. THE share income of the three partners and of their father is stated in that extract as follows : <FRM>JUDGEMENT_501_ITR47_1963Html1.htm</FRM>

(3.) THE firm in this case consisted of the father and his sons. Apart from the fact that in the case of the every firm the two entities, namely, the firm and the partners, are closely connected, in this particular case where the partners, inter se, were a father and his sons the relation not only between the firm and the partners but also as between the partner themselves was intimated. So far as the particular items of share income of the minors of the period to July 12, 1952, are concerned, they were assessable either in the hands of the father if section 16 applied or in the hands of the son if that section did not apply. THE assessability of those sums in the hands either of the father or the son was in a sense inter-dependent. It cannot be gainsaid that the sums were assessable. If the sums were assessed in the hands of the father then they could not be assessed in the hands of the sons. If they were assessed in the hands of the sons they could not be assessed in the hands of the father. In this state of inter-dependence whether the decision was in the case of the father or the decision was in the case of the sons it was inevitable that the decision should affect the position so far as assessability of these sums is concerned in the hands of the sons and vice versa. It also appears to me to be inevitable that the assessment of the firm and the assessment of the father and the assessment of the sons being thus closely inter-related, the records relating to them must in a sense be part and parcel of the same record. It follows that when as a result of the appeal of the father having been allowed by the Tribunal the share incomes of the minor sons were knocked off from the assessment of the father, the fact must have been clearly before the Income-tax Officer who was dealing with the matter in the records of the firm, the father and the sons. In the circumstances I am inclined to take the view that, as a result of the appeal of the father, a mistake became apparent from the records of the case in the assessments of the sons and under section 35(1) of the Income-tax Act the Income-tax Officer was fully competent to make the impugned rectification orders.