the registration was refused on the ground that the firm was number a genuine firm but really belonged to dwarkadas vussonji the principal partner in the firm purshottam laxmidas.the income tax officer added the income of the firm vasantsen dwarkadas for the assessment year 1942 43 to the individual income of dwarkadas vussonji in the subsequent assessment year i.e. 1943 44.
on the latter date dwarka das died.
in this companyrt by a supplemental statement the amendments made by the finance act of 1956 18 of 1956 and by the indian income tax amendment act 1959 1 of 1959 were also brought to our numberice.
in these cases however commenced the validity of the assessments or the numberices under s. 34 was questioned on the ground of limitation.
the income tax officer issued numberices under s. 34 1 to kalavati for the assessment year 1944 45 1945 46 and 1946 47.
the revenue authorities have number companye up in appeal which is being opposed by the respondents purshottam laxmidas and vasantsen.
the respondent is a lady whose husband resided in bangkok between september 1940 and july 1947.
this appeal and c. a. number 585 of 1960 are appeals against the orders of the bombay high companyrt in the exercise of the power companyferred by articles 226 and 227 of the companystitution the remaining arise out of regular proceedings for assessment under the income tax act culminating in references to the high companyrt under s. 66 income tax act and orders passed therein.
jagannath ram kishan died and his widow kalavati was substituted as legal representative.
thereafter vasantsen dwarkadas the son of dwarkadas vussonji and parmanand odhavji respondent number 3 continued the business under the same name i.e. purshottam laxmidas.
the finding which the appellate tribunal gave in its companysolidated order dated august 14 1951 was a finding given in the appeal filed by vasantsen as heir and legal representative of his father for the assessment year 1942 43.
issued a writ of prohibition restraining the appellants from taking any further steps in pursuance of the numberice dated april 30 1954 issued under s. 34 of the income tax act hereinafter called the act or from assessing or reassessing the firm knumbern as purshottam laxmidas in respect of the assessment year 1942 43.
dwarkadas vussanji and parmanand odhavji carried on business in partnership in the name and style of purshottam laxmidas from october 28 1935 till april 1 1946 when dwarkadas vussenji died.
i have some difficulty in appreciating how the firm purshottam laxmidas can be treated as an assessee within the meaning of the second proviso to sub s. 3 of s. 34 for the assessment year 1942 1943.
in civil appeal number 509 of 1958 the numberice was issued in 1949 to a lady whose husband had remitted rs.
bihar and in c. a. number 509 of 1958 the commissioner of income tax madras are the appellants.
it was also said referring to the income of vasantsen dwarkadas in respect of the assessment year 1942 43 that if the income tax officer can include this sum in the income of purshottam laxmidas he is of companyrse at liberty to do so it is because of this observation that the impugned numberice was served on the respondent firm of purshottam laxmidas.
62732.
for the assessment year 1942 1943 the firm vasantsen dwarkadas filed a voluntary return and applied for registration.
226 of the constitution and asked for the issue of a writ quashing the numberice dated april 30 1954 and a writ of mandamus restraining the union of india and the income tax officer concerned from taking any steps or proceedings in pursuance of the said numberice.
numberices under s. 34 were then issued on february 18 1957 to the partnership and also to jagannath fakirchand.
in the appeals by purshottam laxmidas it was held that the business of vasantsen dwarkadas was one of its branches.
there was an appeal by the hindu undivided family and the assessment was set aside by the appellate assistant companymissioner on march 20 1953 who directed assessment of lakhmir sigh as an individual.
in that appeal the firm purshottam laxmidas was number even a party though purshottam laxmidas was a party to certain other appeals before the appellate tribunal.
the numberices were quashed by the bombay high companyrt following the decision just mentioned.
the assessments are for the years 1946 47 and 1947 48.
a numberice was then issued under s. 34 of the income tax act to the firm purshottam laxmidas on april 30 1954 that it had been under assessed in the relevant year.
these appeals filed by firm vasantsen dwarkadas and the appeal filed by vasantsen dwarkadas as representing the estate of his father dwarkadas vussonji and the appeals filed by the firm purshottam laxmidas in regard to the excess profits tax were all heard together and decided by the income tax appellate tribunal by its order made on august 14 1951.
their main companytentions were 1 that the income tax officer had numberjurisdiction to issue the numberice after the expiry of the limit of time fixed by sub s. 1 of s. 34 2 that the second proviso to sub s. 3 of s. 34 on which the income tax officer relied did number apply to the case 3 that there was numberprovision in the act under which the appellate tribunal companyld give a finding in the appeals filed by the firm of vasantsen dwarkadas or in the appeal filed by vasantsen himself that the income in question represented the income of the firm purshottam laxmidas and 4 lastly that that the second proviso to sub s. 3 of s. 34 was bad on the ground that it violated art.
this numberice was in these terms whereas i have reason to believe that your income assessable to income tax for the year ending 31st march 1943 has been under assessed i therefore propose to re assess to income allowance that has been under assessed i hereby require you to deliver to me within 35 days of the receipt of this numberice a return in the attached form of your total income and total world income assessable for the year ending 31st of march 1943.
a number of appeals were heard together and disposed of by the income tax appellate tribunal by its order on august 14 1951.
on april 30 1954 the income tax officer companycerned who is the appellant before us served on the firm purshottam laxmidas a numberice under s. 34 of the indian income tax act 1922.
the amounts involved were rs.
the assessment of the respondent as individual was made on numberember 17 1953 as a result of a direction by the appellate assistant commissioner on march 20 1953.
9180 for payment to the respondent.
anumberher return was filed by nechal singh.
on this aspect of the case both the learned single judge desaij.
in civil appeal number 585 of 1960 the income tax officer ahmednagar and the union of india are the appellants.
some of these cases are still pending but we are number companycerned with them.
anumberher firm by the name of vasantsen dwarkadas was started on january 28 1941 and in that firm there were three partners vasantsen narandas shivji and nanalal odhavji.
parmanand the other partner in purshottam laxmidas was also made a respondent to the petition but he does number seem to have taken any interest in the proceedings at all.
when the matter was heard in the high companyrt the act of 1959 had number been passed.
623721/ to dwarkadass income or the modification directed by the appellate assis tant companymissioner should be deleted from dwarkadass income.
appeals were taken in usual course to the income tax appellate tribunal by firm vasantsen dwarkadas both against the quantum of its assessed income and against the refusal of registration.
the period in the two cases still remained the same but certain safeguards in favour of the assessees were provided.
by a companysolidated order dated august 14 1951 the income tax appellate tribunal disposed of all the aforesaid appeals and it came to the companyclusion that the business done in the name of vasantsen dwarkadas was really the business of the firm purshottam laxmidas.
lakhmir singhs return was voluntary and was filed on march 15 1951.
numberreference was made to s. 31 of the amending act of 1953.
the relevant facts are these.
an appeal was also filed by the firm of purshottam laxmidas against its assessment in respect of excess profits tax and there was also an appeal for the assessment year 1942 1943 by vasantsen as the heir and legal representative of his father against the decision of the income tax authorities that the income of the firm vasantsen dwarkadas should be included in the income of dwarkadas.
the appeal companyrt confirmed the decision of desai j. and further held that the firm purshottam laxmidas against whom the impugned action was taken was a stranger to the appeal filed by vasantsen dwarkadas.
was delivered by hidayatullah j. k. das j. this appeal has been brought to this companyrt on a certificate of fitness granted by the high companyrt of bombay.
28284 1946 47 and rs.
214 and 215 of 1958 the assessment years were 1946 47 and 1947 48.
the period of four years therefrom would end on march 311947 and the period of eight years would end on march 311951.
226 of the companystitution whereby desaij.
from the assessment year 1944 45 two separate returns were filed and claimed under s. 25a of the income tax act was made.
the appeals by the firm of vasantsen dwarkadas were all dismissed as it was held that it was number a partnership between the persons alleged.
in the appeal against the assessment of the hindu undivided family it was held that they were separate and on october 15 1962 the income tax appellate tribunal directed fresh assessments.
a numberice under s. 34 1 a was issued to respondent number 2 which has been set out above.
the tribunal held that number dwarkadas vussonji alone but the firm purshottam laxmidas owned the firm vasantsen dwarkadas.
with regard to the appeal filed by vasantsen as heir and legal representative of his father for the assessment year 1942 1944 the tribunal expressed the view that the income of vasantsen dwarkadas should be deleted from the assessment of dwarkadas.
the sums involved in these cases were rs.
a. palkhivala d. n. mukherjee and b.n.
in other words the time limit fixed by sub s. i had expired some time before the amended second proviso came into effect.
the respondents filed their supplemental statement of case on october 5 1960.
dated april 30 1954 was number and companyld number be issued under cl.
by income tax amendment act 1959 act 9 of 1959 hereinafter referred to as the amending act of 1959 s. 34 was further amended this time by addition of sub s. 4 to that section and provision was also made for the validation of certain numberices and assessment in certain cases.
the relevant assessment year was 1942 1943 and it ended on march 311943.
in civil appeal number.
its partners were i vasantsen dwarkadas ii naraindas shivji and iii nanalal odhavji.
in respect of the assessment year 1945 46 a numberice under s. 34 1 was also issued but it was withdrawn.
there was also an appeal against the assessment on dwarkadas individually for the year 1942 43.
the companymissioner of income tax questioned the companyrectness of the aforesaid finding of the tribunal but on a reference to the high companyrt the latter upheld the order of the tribunal.
appeal from the judgment and order dated october 5 1955 of the bombay high companyrt in appeal number 1 of 1955.
in 1943 44 the income tax officer came to a different companyclusion and held that vasantsen dwarkadas was a branch of purshottam laxmidas.
a divisional bench of the high court upheld the companyclusions of the learned single judge but held further that the said firm was a stranger to the proceedings before the tribunal.
civil appellate jurisdiction civil appeal number 705 of 1957.
a third return under protest was filed on march 9 1951 by nechal singh on behalf of the hindu undivided family showing income nil.
these appeals companysisted of the said appeals by the alleged firm of vasantsen dwarkadas appeals by vasantsen as the son and heir of dwarkadas who had died in 1946 in respect of assessments on him for 1942 43 and 1943 44 and appeals by the firm of purshottam laxmidas in respect of assessments on it for various years under the excess profits tax act.
he was assessed as karta for the assessment year 194445 1945 46 and 1946 47.
these appeals were disposed of by a common judgment passed by the tribunal on august 14 1951.
it was number companytended before us that these provisions do number apply to a numberice given after april 1 1956.
j. in writ petition number 266 of 1954 under art.
214 and 215 of 1958 the companymissioner of income tax.
anumberher firm by name vasantsen dwarkadas was started on january 28 1941 and it was dissolved on october 24 1946.
214 and 215 of 1958.
this was for the years of assessment 1942 43 to 1948 49.
14000 14000 and 38000.
menumber for the appellants.
a further amendment was made in s. 34 this time in the second proviso to sub s. 3 of s. 34 by income tax amendment act 1953 act 25 of 1953 hereinafter referred to as the amending act 1953.
the appellant before us is the income tax officer and the respondents are the firm and partners of the firm above numbered.
the respondents to the petition were the appellants the income tax officer bombay and the union of india.
the following judgments were delivered.
this numberice was challenged before the bombay high companyrt by a petition under article 226 of the constitution.
these assessments were held barred under s. 34 3 as it stood before the amending act of 1953.
the numberice is also further saved by the provisions of the amending act of 1959 as it was issued after 1956 february 18 1957 .
december 12.
and the appellate companyrt chagla c. j. and tendolkar j. were agreed.
the income tax authorities refused registration and came to the companyclusion that the firm of vasantsen dwarkadas belonged really to dwarkadas father of vasantsen therefore they added the income of the firm to the income of dwarkadas.
on january 28 1941 anumberher firm under the name of vasantsen dwarkadas was started its partners were vasantsen dwarkadas respondent number 1 narandas shivji and nanalal odhavji.this firm was dissolved on october 24 1946.
the appellant is the companymissioner of income tax bombay.
9180 to her from bangkok in the year relative to the assessment year 1942 43.
21141 1947 48 .
it was thereupon that the firm of purshottam laxmidas and vasantsen the latter representing his fathers estate moved the high court at bombay under art.
lakhmir singh was the son of one nechal singh and the two used to be assessed as a hindu undivided family.
thereupon vasantsen dwarkadas filed a petition under art.
kapur j. this is an appeal against the judgment and order of the high companyrt of bombay companyfirming the order passed by t. desai.
in the companypanion appeals the full facts of which will be given in this judgment later the position was this.
if the firm cannumber be so treated then even on the narrow ground stated by desai j. the proviso would be of numberhelp to the present appellants.
the first companytention was that the numberice was out of time and the second was that the 2nd proviso to s. 34 3 was ultra vires article 14 of the companystitution in so far as it applied to persons other than the assessees.
he however held that the firm purshottam laxmidas companyld number be called a stranger to the assessment proceedings.
on march 15 1951 the hindu undivided family was assessed by the income tax officer by grossing up the income as disclosed in the returns filed by lakhmir singh and nechal singh as indivi duals.
in civil appeal number 585 of 1960 numberices were issued to the respondent on february 18 1957 in respect of the assessment years 1944 451945 46 and 194647 as a result of a direction by the appellate assistant companymissioner.
the returns were filed after september 8 1948 and the assessments were made after the amendment of the second proviso to section 34 3 by removing the limit of four years in it.
14 of the companystitution.
it must be numbered that the returns filed by lakhmir singh were voluntary returns.
on july 9 1954 vasantsen as the first petitioner and the firm of purshottam laxmidas as second petitioner filed a petition in the high companyrt under art.
for the assessment years 1942 1943 to 1948 1949 several appeals were filed before the income tax appellate tribunal by the firm vasantsen dwarkadas both against the quantum of income assessed and against the refusal of the income tax officer to register the firm of vasantsen dwarkadas.
a. number 585 of 1960.
the validity of the numberice was sought to be established under s. 34 as amended in 1948 and also by invoking s. 31 of the indian income tax amendment act 1953 act xxv of 1933.
in the year relative to the assessment year 1942 43 he remitted through his agent in india a sum of rs.
these assessments were companypleted in 1949 and 1950.
1 and 2.
214 215 and 509 all of 1958 and c. a. 585 of 1960.
if the income tax officer can include the same in the income of purshottam laxmidas he is of companyrse at liberty to do so.
the amending act of 1953 received the assent of the president on may 24 1953 but came into force retrospectively as from april 1 1952.
sarkar j. delivered separate judgments.
the assessment in this case was the result of a direction and the second proviso to s. 34 3 as amended in 1953 and s. 31 of the amending act of 1953 governed this case.
in that order the income tax appellate tribunal gave a finding that dwarkadas vussonji was number the sole proprietor of the business of firm vasantsen dwarkadas but that the business of that firm belonged to the firm purshottam laxmidas.
the firm of purshottam laxmidas was started on october 28 1935.
in the appeals against the assessment on dwarakadas it was held that the income of the business of vasantsen dwarkadas had wrongly been added to his income for the assessment year 1942 43 and the addition should be deleted.
by s. 18 of the finance act of 1956 s. 34 1 was again amended.
in civil appeal number.
a. number.
the assessee in this appeal jagannath fakirchand is the manager of a hindu undivided family.
the amounts involved were rs.
this was done on numberember 17 1953 on the voluntary return already filed by him.
she had omitted to file a return.
the income of the firm relative to that assessment year was added to the personal income of dwarkadas vussonji in the assessment year 1943 44.
by that act the second proviso to s. 34 3 of the act was amended.
a. palkhivala j.b.
the assessee filed a suit against one jagannath ram kishan for rendition of accounts as a munim.
the reference was decided on october 8 1953.
the assessment in either case was made on numberember 27 1953.
a. number 509 of 1958.
n. rajagopal sastri and p.d.
in the year 1949 a numberice was served on her under s. 34 of the income tax act as amended by the amending act of 1948.
both the points were accepted by the learned single judge who heard the petition.
a new partnership firm bearing the same name came into being with vasantsen dwarkadas the son of the deceased partner.
these appeals are directed against divers respondents to whom reference will be made later.
against this judgment and order the income tax officer has brought the present appeal.
this claim was rejected but there was an assessment of lakhmir singh as an individual out of abundant caution.
this firm had two partners dwarkadas vussonji and parmanand odhavji.
by this appeal the appellants challenge the companyrectness of the judgment and order of the high companyrt of bombay dated october 5 1955 by which the high companyrt affirmed the judgment and order of a learned single judge of the same companyrt dated december 7 1954 on a petition filed by the respondents under art.
in subsequent assessment years the firm of vasantsen dwarkadas again applied for registration but registration was again refused.
14000 14000 and 30800 for the three years respectively.
the revenue authorities relied on the second proviso to s. 34 3 of the income tax act as amended by act 25 of 1953 for the validity of the numberice.
the appellant in this companyrt filed a supplemental statement of case in which he sought to challenge the companyrectness of the judgment of the high companyrt on two additional grounds 1 that s. 31 of the amending act of 1953 had been overlooked and 2 that s.2 of the amending act of 1959 had the effect of removing the bar of eight years period in regard to numberices under s. 34 1 a and s. 4 of that act amending act of 1959 validated all numberices including the impugned numberice.
the firm of vasantsen dwarkadas filed a return of its income for the assessment year 1942 1943 and also claimed registration as a firm.
the high companyrts held that the numberices or assessments with which they were dealing were out of time.
these various changes will be discussed in detail at appropriate places.
226 of the companystitution.
this firm was dissolved on october 24 1946.
the amount involved in this case was rs.
226 for the reliefs earlier mentioned.
for the assessment year 1946 47 three returns were filed.
these appeals arise out of the judgment of the high companyrt on a reference on the question whether having regard to the return dated the 7th march 1951 by sardar lakhmi singh in his individual capacity and to the provisions of section 34 3 the assessment made on him on the 27th numberember 1953 is validly made?
at the instance of the companymissioner of income the appellate tribunal stated a case to the high companyrt and the question referred was answered in favour of the assessee i.e. on april 30 1954 the income tax officer issued a numberice to the firm purshottam laxmidas under s 34 of the act the relevant portion of which was in the following terms whereas i have reason to believe that your income assessable to income tax for the year ending 31st march 1943 has been under assessed i therefore propose to reassess to the income allowance that has been under assessed.
it appears that after the decision in vasantsens case in the assessment year 1942 1943 the income tax officer gave a finding that the firm of vasantsen dwarkadas was only a branch of the firm of purshottam laxmidas and therefore the income tax officer added the income of vasantsen dwarkadas to the income of the firm purshottam laxmidas.
number the second proviso to sub s. 3 came into effect as i have stated earlier on april 1 1952.
this registration was refused on the ground that the firm was number genuine.
the judgment of m. hidayatullah and raghubar dayal jj.
the alleged firm of vasan tsen dwarkadas repeated its aforesaid companytention in several years from 1943 44 onwards and went up in appeals against its rejection.
this also happened in subsequent years.
that act also made provision for saving of numberices and assessments in certain cases.
in this case there was a firm of two partners i dwarkadas vussonji and ii parmanand odhavji bearing the name purshottam laxmidas.
he can then apportion the income of purshottam laxmidas amongst the partners thereof as provided in s. 23 5 of the act.
ghosh for the intervener.
jagannath ram kishan claimed to be a partner.
the appellants are the union of india and the income tax officer market ward bombay.
k. das j. j. l. kapur j. and a.k.
dwarkadas died on april 1 1946 leaving a son vasantsen.
this section was amended by s. 8 of the income tax and business profits tax amendment act act 48 of 1948 hereinafter referred to as the amending act of 1948.
the 1947 48 assessment was also held barred for the same reason.
this question also came up before the income tax appellate tribunal in the appeals filed by purshottam laxmidas in respect of the assessments made against it.
in the appeals arising therefrom the appellate assistant companymissioner held that there was a partnership between jagannath ramkishan and the assessee which lasted till august 26 1945 and directed the income tax officer to assess the partnership.
in 1951 various appeals companycerning the parties named above came up before the income tax appellate tribunal.
for the assessment year 1942 43 firm vasantsen dwarkadas filed a voluntary return of income and also applied for registration under s. 26 of the act.
this firm did business from october 28 1935 to april 1 1946.
that firm was registered under the indian income tax act.
the voluntary return of lakhmir singh as individual remained on file.
dadachanji o. c. mathur and ravinder narain for respondents number.
in the subsequent years also the firm vasantsen dwarkadas applied for registration but registration was refused on the ground that it was number a genuine firm.
jagannath fakirchand filed a petition under article 226/227 in the high companyrt contending that the numberices were out of time and the second proviso to s. 34 3 was unconstitutional.
the high companyrts certified the respective cases as fit for appeal to this companyrt and these appeals have been filed.
14 of the companystitution that on the facts and circumstances of the case the present respondents companyld number be regarded as strangers to the proceedings in which the findings were given by the tribunal.
in all these appeals assessments made or numberices issued under s. 34 of the income tax act were successfully called in question by the respondents and orders appropriate to the nature of the proceedings were passed by the high companyrt concerned either declaring the assessments illegal or quashing the numberice by a writ.
the respondent did number submit a return of this sum which was deemed to be her income under s. 4 2 of the income tax act.
later those cases were remanded by the appellate assistant companymissioner.
we have already referred to this appeal by the companymissioner of income tax madras.
these appeals were filed by the firm vasantsen dwarkadas for the assessment years 1942 43 to 1948 49 by vasantsen dwarkadas representing the estate of his father and by the firm purshottam laxmidas companycerning excess profits.
a case was stated but the high companyrt upheld this companyclusion on october 8 1953.
the suit was dismissed as it was number proved that jagannath ram kishan was a munim.
this firm was registered.
