Commissioner of Wealth-tax vs Valiya Aryan Bhattathiripad

K.S. Paripoornan, J.—At the instance of the Revenue, the Income Tax Appellate Tribunal has referred the following two questions of law for the decision of this court.

"1. Whether, on the facts and in the circumstances of the case, was the Tribunal right in law and in fact in holding that there is no joint family system in existence on the passing of the Kerala Joint Hindu Family (Abolition) Act, 1975, since the family is defunct on the date of the assessment order ?

Whether, on the facts and in the circumstances of the case, was the Tribunal right in law and in fact in holding that assessments are null and void ?"

The respondent/assessee was the karta of a Hindu undivided family. We are concerned with the assessment year 1977-78, for which the relevant valuation date was 31-12-1151 (Malayalam Era), corresponding to August 15, 1976. It is seen that the assessee filed a return of net wealth. An assessment was made on the basis of the return submitted by the assessee. In the first appeal filed before the Commissioner of Income Tax (Appeals), objection was taken that the very assessment was null and void as it was made on the karta of the Hindu undivided family which stood disrupted from December 1, 1976, as a result of the Kerala Joint Hindu Family System (Abolition) Act, Act 30 of 1976. This plea was repelled by the Commissioner of Income Tax (Appeals) by holding that the assessment related to a period before the coming into force of the Act. The Act came into force on December 1, 1976. But, in second appeal, the Income Tax Appellate Tribunal held that the assessment was made on January 3, 1983, long after the Kerala Joint Hindu Family System (Abolition) Act, 1975 came into force. Relying on the Bench decision of this court in Wealth Tax Officer, C-Ward Vs. K. Madhavan Nambiar, (W. A. No. 159 of 1981) and also in Sreepadam Vs. Commissioner of Wealth Tax and Others, , the Income Tax Appellate Tribunal held that since there was no joint Hindu family in existence on the date when the assessment order was passed, the assessment order is a nullity. It is thereafter at the instance of the Revenue that the questions of law formulated hereinabove have been referred for the decision of this court.

We heard counsel. We are concerned with the assessment year 1977-78, for which the relevant valuation date is August 15, 1976. The Kerala Joint Hindu Family System (Abolition) Act, 1975, came into force on December 1, 1976. The assessment relates to a period before the said Act came into force. In the case of the very same assessee, for the periods before the Kerala Joint Hindu Family System (Abolition) Act, 1975, came into force, assessments made by the Wealth-tax Officer for the years 1970-71 to 1973-74 were annulled by the Income Tax Appellate Tribunal for identical reason. The matter came up before this court in Income Tax References Nos. 147 to 150 of 1988 Commissioner of Wealth-tax Vs. Valia Aryan Bhattathiripad, . This Bench, by judgment dated January 25, 1991, held that the Appellate Tribunal was in error in holding that the assessment made on the erstwhile Hindu undivided family is a nullity, as the order of assessment was passed after the Act came into force. This court took the view that the Appellate Tribunal failed to address itself to the proper question that arose for consideration and declined to answer the question, but, at the same time, directed the Income Tax Appellate Tribunal to restore the appeals to file and pose the question that arose for consideration from a correct perspective and dispose of the appeals in accordance with law.

The assessee herein is the same assessee who was the respondent in Commissioner of Wealth-tax Vs. Valia Aryan Bhattathiripad, . In view of the earlier Bench decision of this court dated January 25, 1991, we decline to answer the questions referred to this court but, at the same time, direct the Income Tax Appellate Tribunal to dispose of the appeal afresh in accordance with law and in the light of the directions contained in the judgment in Commissioner of Wealth-tax Vs. Valia Aryan Bhattathiripad, .

The reference is disposed of as above.

A copy of this judgment under the seal of this court and the signature of the Registrar shall be forwarded to the Income Tax Appellate Tribunal, Cochin Bench.