INDERJIT SINGH SIAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under s. 66(1) of the IT Act by the Tribunal, Bombay. The question referred is

(2.) THE assessee Inderjit Singh is the son of Shri P.S. Sial. The assessment year is 1944 -45. The assessee submitted a return for the year ending on 31st March, 1944, in which he declared his income to be Rs. 22,185 -8 -0. According to him, the amount of Rs. 21,100 represented his share of profits made by the partnership entitled the Chhindwara Military Hutting Contract of which he and his father were partners. The details of the income were shown as follows : . The ITO filed the case as the total income was below the taxable limit. The reason for excluding the amount of Rs. 21,100 was that he had in the previous assessment year held that there was no partnership between the father and the son and that the business belonged to P.S. Sial alone. The entire profits were included in the income of P.S. Sial and assessed accordingly. P.S. Sial appealed to the AAC, but he was unsuccessful. The Tribunal, however, accepted his contention and held that there was a partnership between the father and the son and that P.S. Sial was liable to pay tax only on his share of profits. The material part of the order passed on 3rd May, 1949, is as follows : "We would, therefore, direct that only the assessee's share from this partnership be included in his assessment. The son's share should be assessed in the hands of the son."

(3.) ON receipt of the order, the ITO passed an ex parte order on 28th March, 1950, assessing Inderjit Singh on an income of Rs. 29,206 on the following basis : Coal business Rs. 1,085 Half share in Chhindwara contract partnership 21,100 Total 22,185 Income as originally determined Rs. 1,085 The assessment, however, was made without issuing any notice under s. 34 or under any other section of the Act. His appeals were dismissed by the AAC and the Tribunal.