Sankaranarayana Bhatta vs Agrl. Income Tax Officer, Kasaragod

M.S. Menon, C.J.—The petitioner in O. P. No. 3225 of 1961 is the appellant before us. The controversy relates to Ext. P. 1, an assessment order dated 10-3-1961 u/s 18 of the Agricultural income tax Act, 1950. The assessment year concerned is 1958-59. The accounting period is the 17 months from 1-11-1956 to 31-3-1958.

The appellant was the head of a Hindu undivided family consisting of himself and his three sons. He claimed that a partition had taken place among the members of his family, and that claim was accepted by the Agricultural income tax Officer. Ext. P. 1 says:

the bona fides of the partition was enquired into and it was found that he made a metes and bounds partition and that the beneficiaries are seen in possession of their allotted shares. Notices were issued to that effect to all the beneficiaries but they have filed statements to the effect that there was no partition. There is no bona fides in their statements and hence they are rejected and the family income is considered as disputed from 1-4-1958.

The contention before us is that in view of the definite finding of a partition on 1-4-1958 the assessment should have been in accordance with Section 29(2) of the Agricultural income tax Act, 1950, that it is not in accordance with that sub-section, and that Ext. P. 1 should on that account be struck down by this Court under Art. 226 of the Constitution. Sub-section (1) of section 29 provides that where at the time of making an assessment u/s 18 it is claimed by or on behalf of any member of a Hindu undivided family till then assessed as undivided that a partition had taken place among the members or group of members of such family, the Agricultural income tax Officer shall make such inquiry thereinto as he may think fit, and if he is satisfied that the joint family property had been partitioned among the various members or groups of members in definite portions he shall record an order to that effect. Sub-section (2) of Section 29-omitting the references to Marumakkathayam tarwads-reads as follows:

Where such an order has been passed, the Agricultural income tax Officer shall make an assessment of the total agricultural income received by or on behalf of the family as such, as if no partition had taken place, and each member or group of members shall, in addition to any Agricultural income tax for which he or it may be separately liable, and notwithstanding anything contained in clause (a) of S. 10, be liable for a share of the tax on the income so assessed accordingly in the portion of the family property allotted to him or it and the Agricultural income tax Officer shall make assessments accordingly on the various members and groups of members in accordance with the provisions of S. 18:

Provided that all the members and groups of members whose family property has been partitioned shall be liable jointly and severally for the tax on the total agricultural income received by or on behalf of the family as such up to the date of the partition.

There can be no doubt that in view of the fact that the Agricultural income tax Officer has recorded an order to the effect that there has been a partition of the Hindu undivided family on 1-4-1958, the assessment in this case should conform to the provisions of sub-section (2) of section 29. It is common ground that assessments have not been made on the various members as provided in that sub-section and that only one assessment has been made for the whole of the family income on the appellant before us. It must follow that Ext. P. 1 is not in order and cannot be sustained.

Section 29 of the Agricultural income tax Act, 1950, corresponds to Section 25A of the Indian income tax Act, 1922. The Supreme Court had occasion to deal with Section 25A in Lakshminarain Bhadani Vs. Commr. of Income Tax, Bihar and Orissa, . Kania C. J. said :

It appears that the income tax Officer in the first place has to make, an assessment of the total income as if no partition had taken place. That means that he has to find out what the total income was and calculate the amount of tax payable thereon as if it was payable by one unit. Having done that, it is the duty of the income tax Officer under the section to apportion the amount payable by the unit amongst the members of the joint family according to the portion of the joint family property allotted to each of them. That duty also appears to be imperative having regard to the concluding words of S. 25A(2).

Section 25A also came up for consideration before the High Court of Andhra Pradesh in A. Ranganatham Vs. The Addl. Income Tax Officer, Cuddapah and Another, . That Court, after reviewing the wording of Section 25A and the case law on the subject, said:

From the language of the section it is clear that where an order is made under S. 25A (1) the procedure laid down under S. 25A(2) must be followed.

In this case an order under sub-section (1) of section 29 is forthcoming; but not an order in conformity with sub-section (2) of that section, Ext. P. 1 has, therefore, to be set aside, and we do so, with freedom reserved to the Agricultural income tax Officer to take such further action as he deems fit in accordance with the law. The appeal is allowed as above. No costs.