LAKSHMI NARAYAN Vs. COMR OF INCOME TAX

JUDGEMENT

(1.) This reference is made by the Income-tax Appellate Tribunal at the instance of the assessee Under Section 66 (1), Income tax Act.

(2.) The assessee was the karta of a Hindu undivided family up to 25-10-1940. Up to the year 1939-40 assessment was made on the assessee as karta. It is not disputed that Under Section 25A, Sub-Section (1), the Income-tax officer made an order that there was partition of the undivided family on 25-10-1940. It is also not disputed that the family had 8 annas share in the firm called Jittanram Nirmalram of Gaya. The Income-tax Officer while making the assessment for the period 11-11-1939 to 30-10-1940 apportioned the profits of the firm into four parts, 8 annas being allotted to the outside patnr. & the other 8 annas allotted to the assessee & other two members of the family, viz, Vishnu Prasad Bhadani & Bhagwandas Bhadani. An appeal was preferred to the Appellate Asst. Comr. & also to the Income-tax appellate Tribunal who by its order dated 29-4-1944 set aside the assessment & remanded the case for proper determination of the date of partition after having such further evidence as it may be adduced. The firm of Jittanram Nirmalram had also been assessed to excess profits tax. A petn. Under Section 20, Excess Profits Tax Act, was filed by the firm before the Comr. of Income-tax. On 15-9-1944 the Comr. made an order, the effect of which was to reduce the assessment of the excess profits tax & to make a consequent increase in the assessment of income-tax for the period in question. The Income-tax Officer issued notice Under Section 34 against the firm & against the patnrs. with respect to the alleged escape of the income-tax. The assessee filed return showing 1/6th share of income from the firm Jittanram Nirmalram but even so the Income tax Officer assessed him for 8 annas share of the entire profits as being representative of the Hindu undivided family which had then become defunct. The assessee preferred appeals to the Appellate Asst. Comr. & to the Income-tax appellate Tribunal, who overd. the objection that the assessment was not proper or valid.

(3.) At the instance of the assessee the appellate Tribunal has propounded the following question for the determination of the H. C. :