The petitioners thereupon preferred the present appeals with special leave obtained from this Court.
The Income Tax officer also passed an order dated 13th August, 1974 allocating the tax liability of the Hindu Undivided Family for the assessment year 1955 56 among the members in the same shares under s. 171, sub s. 7 of the new Act.
The two firms obtained some further relief as a result of appeals filed by them before the Tribunal and in companysequence, further rectification orders dated 3rd September, 1974 were passed by the Income Tax officer rectifying the reassessments of the Hindu Undivided Family.
passed an order of reassessment dated 26th March, 1970 for each of the assessment years 1950 Sl to 1956 57 enhancing the assessable income of the Hindu Undivided Family.
Appeals by special leave from the judgment and order dated the 18 3 1975 of the Bombay High Court Nagpur Bench Nagpur in special civil applications Nos.
This led to the filing of a petition by each of the five sons of Gulab das in the High Court of Bombay challenging the validity of the orders dated 13th August and 3rd September, 1974 which had the effect of imposing personal liability on each of the members of the Hindu Undivided Family for the tax liability allocated to him.
The appeals filed by the two firms against the orders of reassessment made on them partially succeeded before the Appellate Assistant Cornmissioner and companysequently, orders were passed by the Income Tax officer on 25th March, 1971 rectifying the orders of reassessment dated 26th March, 1970 made against the Hindu Undivided Family.
The orders dated 3rd September, 1974 also proceeded on the same lines and allocated the tax liability of the Hindu Undivided Family amongst the members in the same shares as the earlier orders.
Consequent upon the reassessments of the income of the two firms for the assessment years 1950 Sl to 1956 57, numberices were issued to the Hindu Undivided Family for reassessments of its income for those years, since the Hindu Undivided Family was a partner in these two firms during those years.
The petitioners in these petitions did number object to the recovery of the tax liability of the Hindu Undivided Family from out of the joint Family properties companye to their hands on partial partition, but their argument was that they were number jointly and severally liable for the tax liability number was the Income Tax officer entitled to proceed against them personally or recovery of any share of the tax liability.
The result was that from and after the assessment year 1957 58 numberpart of the income of the Export Firm or the Mining Firm was included in the assessment of the Hindu Undivided Family.
The net effect of these orders of rectification passed by the Income Tax officer was that ultimately a much larger amount of tax was determined as payable by the Hindu Undivided Family than what was found due when the original assessments were made for the assessment years 1950 51 to 1956 57.
This claim was accepted by the Income Tax officer after due inquiry and a finding was recorded by him in the order of assessment that there was a partial partition of the movable properties of the Hindu Undivided Family on 15th November, 1955.
1668, 1893, 1895 to 1897 of 1974.
The Income Tax officer, after following the requisite procedure.
The Hindu Undivided Family had companysiderable movable properties companysisting of shares in limited companypanies and jewellery and it was also a partner through its manager and Karta in two firms which may for the sake of companyvenience be referred to as the Export Firm and the Mining Firm.
T. Desai, S. C. Mandia and Shri Narain for the appellants in C.A. 702/75.
702 and 840 843 of 1975.
lt appears that besides these movable properties, the Hindu Undivided Family also owned some irremovable properties.
P. Mehta, S. C. Mandia and Shri Narain for the appellants in C.A. 840 843/75.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
But on 25th January, 1974, the Income Tax officer made certain orders in respect of the assessment years 1950 Sl to 1954 55 and 1956 57 which prejudicially affected the interest of the petitioners.
These movable properties which formed the subject matter of partial partition, were of the value of Rs.
The Judgment of the Court was delivered by BHAGWATI, J. These five appeals by special leave raise a short but interesting question of law relating to the applicability of s. 171, sub s. 6 of the Income Tax Act, 1961 hereinafter referred to as the new Act .
53,442/ , his wife got properties worth Rs.
The Income Tax officer, by these orders, determined the several liability of the members of the Hindu Undivided Family under s. 171, sub s. 7 of the new Act by apportioning the assessed on the Hindu Undivided Family for the assessment years 1950 51 to 1954 55 and 1956 57 amongst the members in the proportion of 2/7th share to Gulabdas this perhaps also included the share of his wife and l/7th share to each of the five sons.
50,000/ , while each of the five sons got properties worth Rs.
So far the members of the Hindu Undivided Family had numbergrievance because what was done by the Income Tax officer was merely to carry out reassessment or rectification of assessment of the income of the Hindu Undivided Family companysequent upon enhancement of the assessable income of the two firms in which the Hindu Undivided Family was a partner during the assessment years 1950 Sl to 1956 57.
On 15th November, 1955 there was a partial partition among the members of the Hindu Undivided Family and the movable properties were divided including the credit balances after taking into account the debit balances on the Export Firm and the Mining Firm.
S. Desai and J. Ramamurthi and S. P. Nayar for the respondents in all the appeals.
76,722/ .
The facts giving rise to these appeals are few and may be briefly stated as follows There was at all material times a Hindu Undivided Family companysisting of one Gulabdas, his wife and five sons.
4,87,054/ and they were divided amongst the members of the Hindu Undivided Family in such a manner that Gulabdas got properties worth Rs.
The companysequence of this partial partition was that the Hindu Undivided Family ceased to be a partner in the Export Firm and the Mining Firm and thereafter Gulabdas and his son Govinddas companytinued as partners in these two firms in their individual capacity.
When the Hindu Undivided Family was sought to be assessed for the assessment year 1957 58, for which the relevant previous year was Samvat Year companymencing from 16th November, 1955 a claim was made on behalf of the members of the Hindu Undivided Family that they had effected a partial partition of their movable properties on 15th November, 1955.
These orders were subsequently rectified by orders dated 3rd September, 1974 revising the allocation of the liability, companysequent upon the rectification made in the orders of assessment against the Hindu Undivided Family as a result of the relief granted to the two firms by the Tribunal.
Now it appears that the assessments of the Export Firm and the Mining Firm relating to the assessment years 1950 51 to 1956 57 were reopened after the new Act came into force and reassessments were made enhancing the assessable income of the two firms in accordance with the procedure provided in the new Act.
