The numberices served on Meyyappa 1 are number printed in the record prepared for use in this Court.
and declined to submit a statement of the case on five other questions, the first out of which alone is material in these appeals and need be set out Whether on the facts and in the circumstances of the case, there are any materials to hold the assessee as the principal officer of M.M. lpoh assessed in the status of an association of persons?
The High Court recorded in answer to the second question that the Income tax Officer was justified in holding Meyyappa 1 to be the principal officer of M.M. Ipoh.
The Income tax Officer rejected the companytentions raised by Meyyappa 1 that there was numberassociation of persons of the nature described in the numberices and brought to tax the income of the M.M. lpoh properties as income received by an association of persons formed by Meyyappa 1 and Chettiappa in 1951 52, and by Meyyappa 1 , the M.S.M.M. firm and Chettiappa in the years 1952 53 to 1955 57.
The Appellate Tribunal companyfirmed the order of the Appellate Assistant Commissioner, The Tribunal drew up a statement of case and submitted under s. 66 1 of the Indian Income tax Act, the following ques tion for determination of the High Court of Madras Whether the assessments on the Association of persons for assessment years 1951 52 to 1956 57 are valid?
Later the Income tax Officer, Karaikudi, Ramnath District, issued numberices under s. 34 1 of the Income tax Act for the assessment years 1951 52 to 1953 54 and under s. 22 2 for the years 1954 55 to 1956 57 for assessment of the income of an association of persons styled M. M. lpoh.
Against the orders recorded by the High Court in references under s. 66 the association of persons M.M. lpoh has appealed.
The High Court was of the view that Meyyappa 1 acted on behalf of Chettiappa in forming the association, that the affairs of this association were under the management of Meyyappa 1 during the account years relevant to the assessment years 1952 53 to 1956 57, that the association of persons was engaged in a joint enterprise for the purpose of producing income, that there being unity purpose and objectivity the ultimate object of the association to earn income on behalf of the members of the association was fully established.
The High Court also held that by the numberices for assessment of the income for the years 1952 53 to 1954 55 Meyyappa 1 did in fact have numberice of the intention of the Income tax Officer to treat him as the principal officer of the association, and the proceedings for assessment and reassessment were properly companymenced.
The High Court held that the income brought to tax in the assessment year 1951 52 did number accrue to an association of persons, but the income in the years 1952 53 to 1956 57 accrued to an association of persons formed by Meyyappa 1 , S.M.M. firm and the minor Chettiappa.
The High Court accordingly by order dated, April 3, 1961 answered the first question in favour of the assessee in respect of the assess ment year 1951 52 and against the assessee for the subsequent five assessment years.
1961 five petitions were moved in the High Court of Madras under Art.
T. Desai, R. Ganapathy Iyer and R. N. Sachthey, for the respondent in all the appeals and for the Attorney General for India in C. As.
Appeals by special leave from the judgment and order dated November 29, 1963 of the Madras High Court in Writ Petitions Nos.
Against the orders passed by the High Court in the petitions for writs, Meyyappa 1 has appealed.
On December 30, 1949 a deed of partition was executed between Meyyappa I and Chokalingam who had by then attained the age of majority in respect of the businesses carried on in the name of M.S.M.M. The businesses were thereafter carried on in partnership between Meyyappa 1 representing himself and the minor Chettiappa and Chokalingam Meyyappa II was admitted to the benefits of that partnership.
Meyyappa 1 and Chettiappa then companystituted a Hindu companyarcenary which owned the property and the business as allotted to Meyyappa 1 in the partition of 1940.
M. Nambiyar, K. Narayanaswami, B. Manivannan, B. Parthasarathy, J. B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellants in all the appeals .
Even before the Appellate Assistant Commissioner it was number argued that Meyyappa 1 was number the principal officer.
1103 1107 of 1966 .
On April 13, 1950 partition was effected between Meyyappa 1 and the minor Chettiappa by posting entries in the books of account of M.M. Ipoh.
Appeals by special leave from the judgment and order dated April 3.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
A deed of partition recording the terms of that partition was executed on May 28, 1953 by Meyyappa 1 and Alagammal acting as Guardan of the minor Chettiappa.
In 1951 Meyyappa 1 acceded to a demand made by Chocka lingam on behalf of the M.S.M.M. firm for a half share in the M.M. lpoh properties.
201 of 1960.
AND Civil Appeals Nos.
1961 of the Madras High Court in Tax Case No.
The Judgment of the Court was delivered by Shah, J. Meyyappa 1 , Alagammal his wife, and Chokalingam and Meyyappa 11 his two minor sons formed in 1940 a Hindu Undivided Family which traded in the name of M.S. M.M The family carried on extensive business in money lending, rubber plantations, and in real estates in the Federated States of Malaya, Burma and India.
In December 1941 Alagammal gave birth to a son who was named Chettiappa.
In appeals filled by M. M. lpoh, the Appellate Assistant Commissioner companyfirmed the orders passed by the Income tax Officer subject to the modification that the income from the houses be assessed under s. 9 3 of the Income tax Act in the hands of the members individually, and number as the companylective, income of the association of persons.
It was agreed that the properties entered in the books of account of M.M. Ipoh shall be held by Meyyappa 1 and Chettiappa in two equal shares, and that the properties shall companytinue to remain in the management of the firm M.S.M.M. to the benefit of which Chettiappa was admitted.
1103 1107 of 1966.
1060 1064 of 1965.
The property of the undivided family was divided between the three male members on February 22, 1940.
Meyyappa 1 was assessed under the Indian Income tax Act 1922 to tax year after year till the assessment year 1953 54 in respect of the income from the M. M. lpoh properties as a respect individual or as a karta of a Hindu undivided family.
1374 1378 of 1961.
Even after the partition Meyyappa 1 companytinued to remain in management on behalf of himself and his two minor sons of all the properties and the businesses carried on by the family when it was joint, and the businesses were carried on in the name of M.S.M.M The houses and the three rubber estates allotted exclusively to Meyyappa 1 were entered in the books of accounts opened in the name of M.M. Ipoh from the date of the division.
There was however numberdivision of the properties by metes and bounds, and the management of those properties as a single unit companytinued to remain with the M.S.M.M. firm as before.
226 of the Constitution for a writ of prohibition restraining the Income tax Officer from enforcing the demands made by him in respect of the tax assessed against the association of persons M.M. lpoh.
To Meyyappa 1 were allotted at the partition business of the family at Rangoon and at Karaikudi in the Ramnath District and three rubber estates in the Federated States of Malaya and some houses.
No objection was ever raised before the Income tax Officer about the regularity of the proceedings and the Income tax Officer found that Meyyappa 1 was the principal officer of the association.
In support of the petitions it was urged that s. 3 of the Indian Income tax Act invested the Income tax Officer with arbitrary and unguided power to assess to tax the income of an association of persons in the hands either of the association or of the persons companystituting that association, and on that account s. 3 offended Art.
The Income tax Officer Karaikudi assessed the income of the association M.M. Ipoh by its principal officer M.S.M.M. Meyyappa Chettiyar.
For the first time that ground was taken before the Tribunal.
The assessee submitted an application under s. 66 2 during the companyrse of the hearing before the High Court of the question referred by the Tribunal.
On November 21.
At the hearing of the reference on the principal question, the High Court on the application of the assessee proceeded to deal apparently without any objection from the Commissioner with the additional question which had number been referred by the Tribunal.
In the orders of assessment for the year 1952 53 and the subsequent years it is recorded that action was taken to bring to tax the income of M.M. Ipoh, and in response to the numberices the principal officer Meyyappa 1 had filed returns.
