COMMISSIONER OF INCOME-TAX, MADRAS Vs. ORMMSMSVSEVUGAN

JUDGEMENT

(1.) This reference is made by the Income-tax Appellate Tribunal under Section 66 (1) of the Income-tax Act, at the instance of the Commissioner of Income-tax Madras. The question referred to the Court is the following :- Whether in the circumstances of the case where it has been held that the liability of a Hindu undivided family after disruption has been imposed upon the members thereof the order of the Tribunal that the appeal is allowed could be sustained.

(2.) At the outset, learned counsel on behalf of the respondent assessee, raised a preliminary objection that this reference is incompetent and should not have been made by the Tribunal since the application by the Commissioner for a case to be stated, pursuant to Section 66 (1) of the Act, was made after the expiration of sixty days following the passing of the order by the Tribunal. In considering this objection reference is necessary to some material facts.

(3.) Prior to 1938, the assessee was the karta of a Hindu undivided family. In that year there was a disruption and partition. Subsequent to that event, the Income- tax Officer, acting pursuant to the provisions of Section 34 of the Act, sought to assess the previous undivided family in respect of income which had been subjected to tax. The assessment was effected on the assessee as karta of the Hindu undivided family. The assessment was upheld by the Appellate Assistant Commissioner. The assessee appealed to the Appellate Tribunal and the appeal was allowed. The order allowing the appeal was made on July 11, 1944. In the statement, expressing the reasons for the order allowing the appeal, it is said after the disruption the liability, if any, of the family had been imposed on a firm composed of the members of the divided family; there is no provisions in law for such imposition; the assessment is illegal and, therefore, cancelled. The Tribunal further observes that the merits had not been considered in light of the view expressed. The order, to which reference has just been made, is clearly one coming within the provisions of Section 33 (4) of the Act.