Hegde, J. - (1.) Aggrieved by the decision of the Allahabad High Court in Misc. Writ Petitions Nos. 1057 and 1059 of 1957, the Income-tax Officer, Gorakhpur has brought these appeals after obtaining special leave from this Court. For proper appreciation of the questions of law arising for decision in these appeals, it is necessary to set out the material facts.
(2.) The first respondent Ram Prasad was the Karta of a Hindu undivided family which carried on business in the name and style of "Ram Nath Ram Prasad". Assessments were made on the family for income-tax for the assessment years 1944-45 to 1947-48 and for excess profits tax for the corresponding chargeable accounting periods respectively ending on October 28, 1943, October 16, 1944, November 4, 1945 and March 31, 1946. The income-tax assessments for the assessment year 1944-45 and the excess profits tax assessment for the corresponding chargeable accounting period ending on October 28, 1943 were set aside by the Income-tax Appellate Tribunal with the direction that fresh orders of assessment be made in accordance with the directions given by the Tribunal. On September 25, 1951, under a scheme for voluntary disclosure, the first respondent disclosed by means of an application a sum of Rs.2,08,450/- and offered the same for taxation. On October 1, 1951, the Hindu undivided family disrupted and there was a complete partition, which was accepted by the department as of that date. Thereafter fresh assessments to income-tax were made for the assessment year 1944-45 to 1947-48 taking into consideration the disclosures made by the first respondent. There is no dispute about those assessments. Subsequently notices were issued under Section 13 (1) of the Excess Profits Tax Act, 1940 (to be hereinafter referred to as the Act) on February 14, 1957 for all the four chargeable accounting periods ending on October 25, 1943, October 16, 1944, November 4, 1945 and March 31, 1946 in the name of the first respondent. Immediately thereafter the first respondent filed two writ petitions before the Allahabad High Court challenging the validity of the notices issued. After the institution of those writ petitions on April 8, 1958, the appellants issued three notices to the respondent under Section 15 of the Act in respect of the chargeable accounting periods ending on October 14, 1944, November 4, 1945 and March 31, 1946. Thereafter the writ petitions filed by the first respondent were amended and the validity of those notices was also challenged. The learned Single Judge who heard the writ petitions allowed the same holding that the appellant was not competent to take proceedings under the provisions of the Act in respect of Hindu undivided family which had been divided. Aggrieved by that decision, the appellant took up the matter in appeal to the Division Bench of the Allahabad High Court. The Division Bench upheld the decision of the learned Single Judge. Hence these appeals.
(3.) Section 2 (17) of the Act defines a person as including a Hindu undivided family. Section 4 is the charging section. It reads: "4 (1) Subject to the provisions of this Act, there shall, in respect of any business to which this Act applies, be charged, levied and paid on the amount by which the profits during any chargeable accounting period exceed the standard profits a tax (in this Act referred to as "excess profits tax") which shall, in respect of any chargeable accounting period ending on or before the 31st day of March, 1941, be equal to fifty per cent, of that excess and shall, in respect of any chargeable accounting period beginning after that date, be equal to such percentage of that excess as may be fixed by the annual Finance Act......." The other relevant provisions are Section 13 and 14 which reads: "13. (1) The Excess Profits Tax Officer may, for the purpose of this Act require any person whom be believes to be engaged in any business to which this Act applies, or to have been so engaged during any chargeable accounting period, or to be otherwise liable to pay excess profits tax to furnish within such period, not being less than sixty days from the date of the service of the notice, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) with respect to any chargeable accounting period specified in the notice the profits of the business and the standard profits of the business as computed in accordance with the provisions of Section 6 or the amount of deficiency available for relief under Section 7: Provided that the Excess Profits Tax Officer may, in his discretion, extend the date for the delivery of the return. (2) The Excess Profits Tax Officer may serve on any person upon whom a notice has been served under sub-section (1) a notice requiring him on a date to be therein specified to produce, or cause to be produced, such accounts or document as the Excess Profits Tax Officer may require and may from time to time serve further notices in like manner requiring the production of such further accounts or documents or other evidence as he may require: Provided that the Excess Profits Tax Officer shall not require the production of any accounts relating to a period prior to the "previous year" as determined under Section 2 of the Indian Income-tax Act, 1922, for the purpose of the Income-tax assessment for the year ending on the 31st day of March, 1937. 14 (1) The Excess Profits Tax Officer shall, by an order in writing after considering such evidence, if any, as he was required under section 13, assess to the best of his judgment the profits liable to excess profits tax and the amount of excess profits tax payable on the basis of such assessment, or if there is a deficiency of profits, the amount of that deficiency and the amount of excess profits tax, if any, repayble and shall furnish a copy of such order to the person on whom the assessment has been made. (2) Excess profits tax payable in respect of any chargeable accounting period shall be payable by the person carrying on the business in that period. (3) Where two or more persons were carrying on the business jointly in the chargeable accounting period, the assessment shall be made upon then jointly and in the case of a partnership, may be made in the partnership name. (4) Where by virtue of the foregoing provisions an assessment could but for his death, have been made on any person either solely or jointly with any other person or persons, the assessment may be made on his legal representative either solely or jointly withh that other person or persons, as the case may be.";