SHAH, - (1.) THE Judgment of the court was delivered by
(2.) RAMANATHAN Chettiar his son Muthiah Ghettiar-called here-inafter for the sake of brevity, Muthiah and RAMANATHAN, Annamalai andAlagappaii, sons of Muthiah, constituted a Hindu undivided family. The familyowned a 3/5th share in M.R.M.S. Firm, Seramban in Malaya. The firm wasassessed under the Indian Income-tax Act, 1922, in the status of a firm resi-dent within the taxable territories. On 16/09/1950, Muthiah separated677from the family taking his l/5th share in the M.R.M.S. Finn. On April 13.1951, the status of the family became completely disrupted and the three sonsof Muthiah took in equal shares the remaining 2/5th share-the grandfatherRAMANATHAN taking no share in the M.R.M.S. Firm. For the assessment year. 1952-53, Muthiah submitted a return of bisincome as an individual and stated under the bead business income "Kindlyascertain his (assessee's) share of profit and remittances from the Income-taxOfficer, Second Additional Circle-1, Karaikudi in F. 6098-m/1952-53". InPart III of the return Muthiah supplied the following information about hispartners: JUDGEMENT_675_1_1969Html1.htm For the assessment year 1953-54 in Column 3 in Section B of thereturn Muthiah stated: "Kindly ascertain the remittances from the Income-tax Officer, Fifth Additional, Karaikudi in, F. 6098-m", and at p. 3 of thereturn in Column 3 of Section P it was stated : "Assessee has 60/303 share in Messrs. R. M. S. Joint Seramban(Malaya). Kindly ascertain share of profit or loss from the Income-taxOfficer, Fifth Additional, Karaikudi, in F. 6098." In Part III of the return he set out the names of the partners as werementioned in the return for 1952-53. Against the names of RamanathanChettiar, Alagappa'n Ghettiar and Annamalai Ghettiar it was not disclosedthat they were minors. For the assessment year 1954-55 at the foot of page I of the returnMuthiah stated: "The assessee has a remittance of Rs. 6,188-12-0 from M.R.M.S.Firm, Seramban. His share of income may be taken from the firm'sfile.", and in Part III the names of seven partners as mentioned in 1952-53 returnwere set out-Ramanathan, Alagappan, Annamalai were not shown asminors.
(3.) RAMANATHAN, Alagappan and Annamalai-the three minor sons ofMuthiah represented by their mother and guardian also filed returns oi"678their respective income for the years 1952-53, 1953-54 and 1954-55 and dis-closed therein their shares in the profit from the 2/5th share in the M.R.M.S.Firm. For the assessment years 1952-53, 1953-54 and 1954-55 the Income-tax Officer completed the assessments separately on the firm, on Muthiah as anindividual and on the three minors represented by their mother and guardian.Muthiah was assessed in respect of his share in the income of the firm andfrom other sources. In his returns Muthiah had not disclosed the sharesreceived by his minor sons and the Income-tax Officer did not in making theassessments include shares of the minors from the firm under Sec-tion 16(3) (a) (ii) of the Indian Income-tax Act, 1922. The Income-tax Officerissued notices of re-assessment to Muthiah under Section 34(1) (a) of theIncome-tax Act, 1922, for the years 1952-53 and 1953-54 and underSection 34( 1) (b) for the year 1954-55. Muthiah filed returns under protestdeclaring the same income as originally assessed. In the view of the Income-tax Officer Muthiah had not furnished in Part III, clause (c) of the returnfull facts regarding the other parties and in Column 2 he had merely disclosedthat Ramanathan, Alagappan and Annamalai were minors : That "infor-mation was not full in the sense that he had not stated that they were minorsons" of Muthiah. Accordingly the Income-tax Officer held that the incomeof the sons of Muthiah which should have been included under Sec-tion 16(3) (a) (ii) of the Income-tax Act had escaped assessment in Muthiah'shands and he brought that income to tax.;