RAMESWARDAS RADHAKISSEN Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) This is a reference under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the "said Act"). The facts, as appear from the statement of case submitted by the Appellate Tribunal, are as follows: The Assessee is Rameswardas Radhakissen a Hindu undivided family (H.U.F.). The assessment year in question is 1954-55 and the relevant accounting period is March 24, 1953 to April 10, 1954. The case is governed by the provisions of the said Act. One Madanlal Kedia, his son Keshar Deo and the two sons of his deceased brother, namely, Bhimsen and Durgaprasad, constituted a Hindu joint family at the relevant time. Madan Lal Kedia was the Karia thereof. Notice under Section 22(2) of the said Act was served on the Assessee on August 13, 1954. It was served during the life time of Madanlal Kedia who died in October 1954. After his death, Bhimsen was the seniormost member and presumably acted as the Karta. It is stated that after the death of Madanlal, quarrels started amongst the members of the family and Bhimsen Kedia did not file the return in response to the said notice, nor did he attend the proceedings for assessment. Durgaprasad Kedia the next senior member made an application in April, 1958, for time to file the return and actually filed the same on July 15, 1958, within the extended time. The Income-tax Officer came to the conclusion that Bhimsen Kedia being the Karta of the H.U.F. as shown by the record, the return filed by Durgaprasad Kedia, who did not even describe himself as Karta in the return filed by him, was not in accordance with law and he refused to accept it. Notice was given to the Karta with copies to other members that unless the return was filed in accordance with law, the Assessee would be liable to be treated as a defaulter under Section 22(2) of the said Act and the assessment was liable to be proceeded against under Section 23(4) (Best-Judgment Assessment) of the said Act. There was no compliance with the said notice. Therefore, action was taken under Section 28 and assessment was made under Section 23(4) on January 31, 1959. Demand notice was served on the Assessee on February 19, 1959 and it is not disputed that Durgaprasad Kedia was aware of it. An application under Section 27 of the said Act, through Durgaprasad, was filed for re-opening the said assessment and an appeal was filed under Section 30 of the said Act against the quantum of assessment. The application under Section 27 was rejected whereupon the Assessee preferred an appeal against the said order before the appellate Assistant Commissioner. According to the agreed statement of the case, the appeal against the rejection of the application under Section 27 was withdrawn. The appeal against the quantum of assessment was then heard by the appellate Assistant Commissioner, who by his order dated July 7, 1960, gave a substantial reduction to the Assessee in the amount assessed. It will appear from the said order, which appears at pp. 9-11 of the paper book, that in the said appeal, only the quantum was challenged and no other point was agitated. Against this order, an appeal was preferred to the Income-tax Appellate Tribunal. In that appeal, the Assessee sought to challenge the order on the ground that the order of assessment under Section 23(4) was bad, on the same grounds as had been taken in the application under Section 27. The Appellate Tribunal by its order dated February 20, 1962, refused to go into such questions, holding that the proper forum for it was in proceedings under Section 27 and not in the appeal against the quantum. As regards the quantum, however, it was further reduced. Thereafter, an application was made by the Assessee under Section 66(1) of the said Act and the Appellate Tribunal thereupon referred the following question of law for determination by this High Court:

(2.) There is preponderance of authority which supports the conclusion arrived at by the Appellate Tribunal and the answer to the question must be in the negative. Actually Mr. Pal appearing oh behalf of the Assessee does not contest the proposition but has tried to distinguish it on a ground which I shall presently mention. He has placed before us the leading authorities on the point, which I shall briefly enumerate.

(3.) The first case to be considered is a Bench decision of this Court--Naba Kumar Singh Dudhuria v. Commissioner of Income-tax Bengal, 1944 12 ITR 327. In that case, one of the questions of law referred to the Court by the Appellate Tribunal was whether in an appeal under Section 30(1) the validity of an assessment under Section 23(4) can be challenged when no proceeding under Section 27 of the Act was taken to cancel the order under Section 23(4)?