SANTIMOYEE BOSE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This reference arises out of the assessments for two assessment years, i.e., 1955-56 and 1956-57, for which the corresponding accounting periods were the financial years ending 31st March, 1955, and 31st March, 1956, respectively. The assessees are Smt. Santimoyee Bose, the widow, Smt. Rekha Bose, Smt. Ella Bose, Sri Asoke Bose, Sri Ajoy Bose, Sri Amit Bose and Sri Arabinda Bose, the daughters and sons of one Bhupendra Nath Bose, deceased. They have been assessed in the status of an "association of persons". It appears that a suit being Suit No. 4059 of 1948 was filed in the High Court at Calcutta in December, 1948, by Smt. Santimoyee Bose on behalf of self and as the guardian and next friend of her six children, Rekha Bose, Ella Bose, Asoke Bose, Ajoy Bose, Amit Bose and Arabinda Bose, who were then minors, against her husband, Bhupendra Nath Bose, claiming for separate residence and suitable maintenance including arrears of maintenance for herself and her children. A special referee was appointed by this court and the special referee made a report which was confirmed by this court* in the said suit on the 1st February, 1955. By the order confirming the report of the special referee it was provided that a sum of Rs. 750 per month be allowed to the plaintiffs for their maintenance during the term of the natural life of the plaintiff, Smt. Santimoyee Bose, and until all the other plaintiffs attained majority. It further provided that a sum of Rs. 650 per month be allowed to the plaintiffs, Smt. Santimoyee Bosc, Asoke Bose, Ajoy Bose, Amit Bose and Arabinda Bose, for their maintenance after the plaintiffs, Smt. Rekha Bose and Smt. Ella Bose were married and a further sum of Rs. 500 per month be allowed to the plaintiff, Smt. Santimoyee Bose, as her maintenance after the two daughters have been married and all the sons had attained majority. It was further provided that under the said order a sum of Rs. 15,000 be allowed to each of the daughters, Smt. Rekha Bose and Smt. Ella Bose, for their marriage expenses. The premises No. 15, Nayan Chand Dutt Street, Calcutta, was declared to be suitable for the residence of the plaintiffs. The defendant in suit being Bhupendra Nath Bose was further ordered to pay to the plaintiffs a sum of Rs. 39,220 for arrears of maintenance up to 31st March, 1955. The Income-tax Officer served a notice on Smt. Santimoyee Bose and others in the status of "association of persons" for the assessment years 1955-56 and 1956-57 under Section 34 of the Indian Income-tax Act, 1922, Thereafter, the Income-tax Officer completed the reassessment of the income of the assessees for these two years. The main contention before the Income-tax Officer was that under the decree the share of each of the plaintiffs was specific and determinate and as such the decretal amount could not be assessed in the status of the "association of persons". For the assessment years 1955-56, the Income-tax Officer determined the decretal amount accrued from the institution of the suit till 31st May, 1955, less payments made by the receiver, at Rs. 39,220 and the income from the dwelling house under Section 9(2) at Rs. 3,566 and determined the total income at Rs. 42,791. For the assessment year 1956-57 the Income-tax Officer determined the income from other sources, being the allowance in terms of the High Court figure at Rs. 750 per month, at Rs. 9,000 and the income from the dwelling house under Section 9(2) of the Indian Income-tax Act at Rs. 818 and determined the total income at Rs. 9,839 and assessed these amounts on Smt. Santimoyee Bose and others in the status of "association of persons".

(2.) On appeal by the assessees, the Appellate Assistant Commissioner held that for the assessment year 1955-56, the amount of Rs. 39,220 did not accrue to the assessee on the date of the decree. He directed that the income for that year be determined at Rs. 9,823 including the income from the dwelling house. A contention was made before the Appellate Assistant Commissioner that the amount receivable under the decree should be assessed in the hands of each of the plaintiffs according to his or her individual share of the amount and not jointly in the status of an association of persons. The Appellate Assistant Commissioner, however, rejected that contention. The Appellate Assistant Commissioner heard the assessees' appeals for six years 1956-57 to 1961-62 together and disposed of the assessees' contention in these six appeals by a common order and held that the Income-tax Officer was justified in making the assessment on the assessee in the status of an association of persons.

(3.) Both the assessees and the Income-tax Officer preferred appeals before the Income-tax Appellate Tribunal against the orders of the Appellate Assistant Commissioner. The Tribunal by a consolidated order disposed of the said appeals. In the appeals preferred by the assessees it was contended that the assessees should have been taxed on the basis of the quantum of maintenance falling to the share of each maintenance holder and not on the basis of all the maintenance holders taken together as constituting an association of persons. The departmental appeal questioned the exclusion of the amount of Rs. 30,220 representing the arrears of maintenance provided for by the High Court decree for the assessment year 1955-56. The Tribunal held that the amount paid as maintenance jointly to two or more persons could not be said to have been received by them in specified portions by each one of them. According to the Tribunal maintenance was not awarded on the basis of the shares falling on the inheritance but on the basis of the needs. The Tribunal held that the income-tax authorities were justified in assessing the said sum jointly as an association of persons. The Tribunal therefore confirmed the orders of assessments made. The assessee made an application under Section 66(1) of the Indian Income-tax Act, 1922, for reference of certain questions. In view of the contentions made before us, it is necessary to set out the questions suggested by the assessees in their application under Section 66(1) of the Indian Income-tax Act, 1922, to the Tribunal. The questions were :