MANNALAL MODI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under S. 66(1) of the IT Act by the Tribunal, Madras Bench 'B', stating a question of law which arises out of the Tribunal's order in ITA No. 5617 dt. 16th Oct., 1952.

(2.) THE assessee, Mannalal Modi, was a member of the joint Hindu family consisting of Rangalal Modi, Mannalal Modi and others. This joint family was an assessee on the file of the ITO, Special Circle, Cuttack. The assessment year with which we are concerned is 1944 45, and the accounting year is the Dewali year ending with 29th Oct., 1943. Mannalal filed a return of his income before the territorial ITO, Cuttack, on 19th Oct., 1944, as an individual showing an income of Rs. 14,273 for the Deepavali year (accounting year) ending with 29th Oct., 1943. It appears on receipt of this return the territorial ITO sent it to the ITO, Special Circle, as the larger joint family of which Mannalal was a member was being assessed by the ITO, Special Circle, and as by that time the partition between the members of the family had not been accepted by the Department. Later on, as a result of certain proceedings which came to the High Court, the Department accepted the case that there had been a partition between the members of the joint family with effect from 9th Nov., 1942. Thereupon, the ITO, Special Circle, by his letter dated 19th Jan., 1949, informed the territorial ITO, that Mannalal Modi had become separate and was carrying on business as an individual from 9th Nov., 1942, that is, from the beginning of the year previous to the assessment year of 1944 45. On receipt of this letter the territorial ITO, Cuttack, issued a notice under S. 34 of the IT Act on 21st March, 1949, on Mannalal Modi asking him to submit a return. The notice was served on the assessee on 28th March, 1949. On 2nd May, 1949, Mannalal informed the ITO that he had filed a return already on 19th Oct., 1944. He was, however, asked to file a fresh return in compliance with the notice under S. 34; but he did not file any such return. The territorial ITO was of opinion that the assessee had failed to comply with the notice under S. 22 (4), and so he proceeded to make an assessment under S. 23(4) on 9th Feb., 1950. The assessee thereupon moved a petition under S. 27 for reopening the assessment, which was rejected by the ITO on 29th April, 1950.

(3.) BEFORE the IT authorities there was some dispute as to whether this case would be governed by the Amending Act of 1939 or by the Amending Act of 1948. Before us, however, learned counsel on both sides have agreed that the case would be governed by the Amending Act of 1939.