NOPRAM RAMGOPAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a petition Under Section 66(2), Income -tax Act, against an order of the Income Tax Tribunal, Madras Branch, praying for an order calling upon the Tribunal to state a case for the petitioner and refer it to this Court for decision. The question arising for decision, according to the petitioner, is 'whether under the facts and circumstances of the case the provisions of Schedule 5 (4) are applicable to all the activities of a business or to those activities which suffered tax under the Income -tax Act, 1939.'

(2.) THE petitioner represented a joint Hindu family concern and was carrying on mercantile business in grains prior to 1918 and had been assessed to income -tax under the Income -tax Act, 1918. During the assessment year 15 -4 -43 to 2 -4 -44, the joint family became separated and was succeeded by a partnership firm consisting of the members of the family. The petitioner claimed exemption from income -tax under Schedule 5 (4), Income -tax Act, 1939. The Income -tax officer rejected his claim, but the Appellate Assistant Commissioner held that the provisions of Schedule 5 (4) would apply to the facts of the case and allowed the benefit of those provisions to the petitioner in two out of the six businesses carried on by him on the relevant date of succession. The Appellate Assistant Commissioner held that the petitioner could get relief only in respect of those activities that were actually in existence in the year 1918 and suffered tax under the Act of 1918, but not in respect of the additional business activities which came into existence subsequent to that year. This view of the Assistant Commissioner was confirmed by the Income -tax Appellate Tribunal in their order, dated 24 -11 -48. It is against this order that the petitioner has filed the present revision petition.

(3.) MR . Mohanty, learned counsel for the petitioner, contends that the Income -tax authorities and the Appellate Tribunal failed to properly appreciate the effect of the provision contained in Schedule 5 (4), Income -tax Act, 1939. That section reads as follows: