- (1.) These appeals arise from the judgment of the Punjab and Haryana High court dismissing an application under Section 256 (2 of the Income Tax Act. The assessment years concerned are 1973-74 and 1974-75. The question which the Revenue sought to raise reads thus: "Whether on the facts and in the circumstances of the case the tribunal was right in holding that the income of the minor children of the assessee in the firm M/s Harbhagwan Harbhajan Lal (Viramgeron) , Chandigarh was not includible in his individual capacity under Section 64 (i) (ii) of the IT Act, 1961 - (Question quoted from the Paper-Book).
(2.) The assessee, Harbhajan Lal was a partner in a partnership firm, during the relevant accounting years, in his capacity as a Karta of a Hindu Undivided family. His minor children were admitted to the benefits of that partnership firm. The Income Tax Officer sought to include the income accruing to the said minors in the income of the assessee, which was objected to by him. The tribunal agreed with him, whereupon the Revenue applied for referring the above question under Section 256 (1. It was rejected by the tribunal. The revenue then approached the High court under Section 256 (2. The High court refused its request. The High court was of the opinion that inasmuch as against the decision of the A. P. High court in commissioner OF INCOME TAX v. Sanka Sankaraiah , taking a view similar to the one taken by the tribunal, this court has rejected the special leave petition, and also because the Punjab and Haryana High court itself has taken a similar view in another matter, there was no occasion or necessity to refer the said question.
(3.) We find that the question sought to be raised by the Revenue is concluded against it by the decision of this court in L. Hirday Narain v. ITO rendered with reference to Section 16 (3 (a) (ii) of the Income Tax Act, 1922 which is in pari materia with Section 64 (1 (ii) of the Income Tax Act, 1961 (as it obtained prior to the Amendment in 1975 with effect from 1/4/1976. Shah, J. , speaking for the division bench, observed: "Income for the period 19-11-1949 to 30/9/1950, being assessed to tax as the income of a Hindu Undivided Family and not of an individual, section 16 (3 (a) (ii) plainly did not apply and the income of the minor children of Hirday Narain could not be included in the income of Hirday narain assessed as a Hindu Undivided Family. ";