Income received by a Hindu undivided family companyld number therefore be assessed and companylected from the members of the family, if at the time of making the assessment the family was divided.
226 of the Constitution in the High Court of Andhra Pradesh at Hyderabad, praying that writs of certiorari or other appropriate writs be issued quashing the order dated June 25, 1958 of the Income tax Officer under section 46 5 .
Thimmayya and Venkatanarsu then lodged petitions under Art.
The petitions were decided by Seshachelapati J., in favour of the two petitioners, and the decision was companyfirmed in appeal by a Division Bench of the High Court of Andhra Pradesh.
For reasons which do number appear from the record, this claim was number disposed of till June 30, 1952.
Appeals preferred against the orders of assessment to the Appellate Assistant Commissioner and the Income tax Appellate Tribunal proved unsuccessful.
Section 25 A incorporated by the Indian Income tax Amendment Act 3 of 1928 at the material time read as follows Where, at the time of making an assessment under section 23, it is claimed by or on behalf of any member of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income tax Officer shall make such inquiry thereinto as he may think fit, and, if he is satisfied that the joint family property has been partitioned among various members or groups of members in definite portions he shall record an order to that effect.
In the meanwhile assessments for the five years in question were made by the Income tax Officer on diverse dates between September 30, 1948 and November 30, 1950, resulting in a tax liability of Rs.
To rectify what was obviously a lacuna, the Legislature incorporated section 25 A for assessment and enforcement of liability to tax income received by a Hindu undivided family, which was numberlonger in existence at the date of assessment.
As the tax due was number paid the Income tax Officer made an order under section 46 5 of the Indian Income tax Act, 1922 on June 25, 1958 calling upon the Managing Director to withhold the amount of tax due from the salaries payable to the defaulters Thimmayya and Venkatanarsu and to show the same to the credit of the Government of India.
On May 20, 1946, Venkatanarsu claimed before the Additional Income tax Officer, Cuddapah that the property of the Hindu undivided family had been partitioned among the members in definite portions.
But the new section went very much beyond rectifying the defect in the statute which necessitated the amendment.
A private limited Company styled Krishnappa Asbestos and Barytes Private Ltd. took over the business of the firm on May 21, 1947 for Rs.
2,04,000.
Proceedings for assessment of tax due by the Hindu undivided family for the years 1941 42, 1942 43, 1944 45, 1945 46 and 1946 47 were pending at the time when the Hindu undivided family was disrupted.
They founded their petitions on two grounds i that after the Income tax Officer recorded an order on June 30, 1952 under section 25 A 1 that the family has disrupted with effect from November 2, 1946, steps taken for recovery of the amount of tax assessed without an appropriate order under section 25 A 2 were invalid and ii arrears of tax due by the erstwhile Hindu undivided family companyld number be recovered from remuneration earned by them as employees of the Company.
65,750 in the aggregate for the five years.
The business of Krishnappa and Sons was taken over by a firm which the partners were Krishnappa and his two sons.
The family was disrupted in 1946, and all its properties were divided among the members of the family.
Provided that numbersuch order shall be recorded until numberices of the inquiry have been served on all the members of the family.
On June 30, 1952 the Income tax Officer, Special Circle, Madras, made an order under section 25 A recording that the property of the Hindu undivided family of Krishnappa and his sons was partitioned on November 2, 1946.
400 and Venkatanarsu as General Manager at a monthly salary of Rs.
Thimmayya obtained employment under the Company as mines superintendent at a monthly salary of Rs.
They carried on business in mining in the name and style of Krishnappa and Sons.
Shah, J. Krishnappa and his two sons Thimmayya and Venkatanarsu companystituted a Hindu undivided family.
