DAMODAR HANSRAJ Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) DECEASED Damodar Hansraj had three sons : Kalyanji Damodar, Sunderdas Damodar and Govindji. Purushottam, Khatau and Haridas are the three sons of Sunderdas. Jagmohan is the son of Govindji. Kalyanji Damodar has no sons. Damodar Hansraj, with his sons, constituted a Hindu undivided family, governed by the Mitakshara School of Hindu law. On October 29, 1943, there was a partition by metes and bounds amongst Kalyanji, Sunderdas and Jagmohan as, by then, Damodar Hansraj and Govindji were dead. The deed of partition was executed on May 10, 1944. On September 23, 1944, an application was made under Section 25A of the Indian Income-tax Act, 1922, for an order to record the factum of partition. On February 28, 1945, the said application was allowed, but the date of partition was taken to be September 9, 1944, the date on which the deed of partition was registered. This order was set aside in appeal and the application under Section 25A was allowed recording the partition with effect from October 29, 1943. From 1945-46 to 1961-62, assessments were made on the three separate branches in their individual capacities. On March 29, 1965, March 30, 1965, and January 7, 1967, notices were issued under Section 148 of the Income-tax Act, 1961, for reopening the assessments for the years 1948-49, 1950-51, 1953-54, 1954-55, 1956-57, 1957-58, 1958-59, 1959-60, 1960-61, 1961-62 and 1962,63. The assessments for the intervening years, not referred to, have not been reopened. While issuing the notices, the income-tax department did not disclose the materials on the basis of which the assessments were intended to be reopened. The Income-tax Officer, Ward-A, Cuttack (Sri S. K. Das), in paragraph 3(c) of his counter-affidavit has stated that a deed of settlement dated January 4, 1949, came to the notice of the department wherein it was stated by the three members of the partition deed that the partition in respect of which the application under Section 25A was filed, merely for the purpose of evasion of tax ; and being of opinion that the order passed under Section 25A was obtained on the basis of misrepresentation, notice was issued under Section 148 for reopening the assessment. The writ application has been filed, in which the impugned notices are attacked as being without jurisdiction Inasmuch as the order under Section 25A has not been set aside and still stands good for all subsequent years and in the face of such an order the assessment cannot be reopened under Sections 147 and 148 of the Income-tax Act, 1961.

(2.) THE facts on the basis of which the notices were issued were also questioned.