MOHAN LAL AGARWALLA Vs. RAMESHWAR LAL AGARWALLA

JUDGEMENT

(1.) THIS writ application relates to an income-tax assessment proceeding for the assessment year 1970-71. One M/s. Rameshwarlal Bansidhar, consisting of Rameshwarlal Agarwala himself, his brother Bansidhar and their sons, was being assessed as a Hindu undivided family, Rameshwarlal Agarwalla being the karta of the joint family. On an earlier occasion, that is, during the course of the assessment proceeding for the year 1961-62, the said Rameshwarlal Agarwalla (respondent No. 1) on March 19, 1964, as karta, had filed a petition before the Income-tax Officer (respondent No. 12) informing him that there had been a partial partition in the joint family of business and properties on June 30, 1959, and offering to pay half of the tax amounting to Rs. 4,503 and throwing the liability for the balance on his brother, Bansidhar. Upon filing of the said application, a proceeding under Section 25A of the Indian Income-tax Act, 1922 (hereinafter called the old Act), was initiated by the Income-tax Officer. The partition was claimed on the basis of a Chitha dated July 1, 1959, drawn on a plain paper. The petitioner's father, Bhansidhar, however, contested the claim of partition of his elder brother, Rameshwarlal. The Income-tax Officer, by his order dated March 19, 1966 (annexure F), to the supplementary affidavit filed by respondent No. 10 today, rejected the claim of Rameshwarlal and assessment was made treating the family as an undivided Hindu family.

(2.) AN appeal was taken before the Appellate Assistant Commissioner by Rameshwarlal which was dismissed (vide annexure G) and so was the fate of the second appeal filed by him before the Income-tax Appellate Tribunal. He then filed a writ application being C.W.J.C. No. 760 of 1972. Thiscourt, on a consideration of the facts and circumstances of the case, and taking the view that there had been a violation of the principles of natural justice, set aside the order of the Tribunal and sent the matter back " for a fresh disposal of the appeal before it in accordance with law and in the light of this judgment " (vide annexure 7). It may be mentioned here that this court made certain observations and directed the Tribunal to consider the same. When the matter went to the Tribunal after the remand, the Tribunal, in its turn, set aside the orders of the lower authorities and remitted the matter back to the Income-tax Officer to pass a fresh order " after allowing proper opportunity to the karta as well as to the other members of the family and examine all the papers which may be relevant for deciding the issue ". The Tribunal also gave certain directions to the assessing officer. This proceeding, however, is said to be still pending. But when the assessment proceeding for the period 1970-71 was going on, Rameshwarlal filed another petition on September 7, 1972, before the Income-tax Officer (respondent No. 12) stating that there had been a total partition of his undivided Hindu family properties among the two branches of the two brothers aforesaid, namely, Rameshwarlal and his brother, Bansidhar, on the basis of the said Chitha dated July 1, 1959, on and from June 30, 1959. The Income-tax Officer started an enquiry under Section 171 of the Income-tax Act, 1961 (hereinafter referred to as the new Act), a provision analogus to Section 25A of the old Act. He issued letters to both the brothers and examined them on solemn affirmation, and on consideration of the materials that were produced by the said parties, by his order dated March 26, 1973 (annexure 6), came to the conclusion that "there has been a total partition of the joint family properties on June 30, 1959, as evidenced by the Chitha dated July 1, 1959 ". He accordingly allowed the claim of partition with effect from July 1, 1959. This order is under challenge in the present writ application by the petitioners who are the two sons of the aforesaid Bansidhar. The other members of the family have been added in the category of the respondents.

(3.) WE have already stated earlier that Bansidhar had participated in the inquiry and the appeal is psnding in which the petitioners have also intervened and appeared. The question that have been raised by the petitioners can very well be raised and considered by the appellate authority as well and, therefore, we do not feel persuaded to interfere in the writ jurisdiction when the petitioners have already availed of the internal statutory remedy, where, apart from the jurisdictional and legal question, a more comprehensive investigation can be made. It is no doubt true that the order of assessment is independent for each year and does not operate as res judicata in any subsequent year ; the position of an order under Section 171 of the new Income-tax Act is peculiar on account of its special nature. As under Sub-section (3) of Section 171, in giving effect to an order, the Hindu undivided family will be considered to have been a family as from the date recorded in that order, it cannot be contended that the family continues to have joint existence any further. The Income-tax Officer in the impugned order, as already indicated earlier, has held that there was a partition in the family from July 1, 1959. After recording this finding, it would not be possible for the Income-tax Officer, who is still to consider the proceeding for the assessment year 1961-62, to take a different view, as the date of partition happens to be the same date which has been claimed in the said assessment proceeding. The result of this order, therefore, is that the assessment order that has yet to be passed in the earlier proceeding for the year 1961-62 would be practically a mechanical one. WE have seen that the proceeding travelled up to this court and various directions and observations were given to the Income-tax Officer. A grievance has been rightly made by the learned cousel for the petitioners that without completing the said proceeding the Income-tax Officer by passing the impugned assessment order might have made all those observations and directions infructuous. WE feel impressed by this contention but still we propose to dismiss this writ application with certain observation and liberties to the petitioner. WE deliberately refrain from going to that length and to examine as to whether the Income-tax Officer passed the impugned order and took into account and carried out all those directions and observations. This aspect of the matter can be better examined by the learned Appellate Assistant Commissioner himself before whom the matter is still pending and to whose hands we leave this aspect of the matter to be considered.