COMMISSIONER OF INCOME TAX DELHI AND RAJASTHAN Vs. GANESHI SHAM LAL

JUDGEMENT

(1.) Firm Ganeshi Lal Sham Lal (hereinafter referred to as assessee) was Hindu undivided family, assessed as such up to the assessment year 1946-47. In the present reference we are concerned with the assessment years 1947-48 and 1952-53.

(2.) During the assessment proceedings for the asssessment year 1947-48 the assessee claimed that there -was a total disruption of family on 10th of July 1945. The order made under section 25A of the Indian Income-tax Act 1922 by the Income-tax Officer shows that 10th July 1945 was the last day of the accounting year relevant to the assessment year 1946- 47. By order dated the 28th of November 1951 the Income-tax Officer, Business, Circle, New Delhi, recognized the total disruption of the assessee with effect from the 10th of July 1945. After the said order was passed under section 25A, assece of the notices under section 34 with respect to the assessment year 1947-48 and under section 22(2) with respect to the assesssment year 1952-53 the Income-tax Officer called upon the assessee to show cause why assessee's claim under section 25A of the said Act, which had been accepted by the Income-tax Officer by his order dated the 28th November 1951, should not be rejected. The Income-tax Officer came to the conclusion that the firm Ganeshi Lal Sham Lal had not disrupted on the 10th July 1943 but had continued till 10th May 1952. He accordingly made assessment on Hindu undivided family for each of the said two years The assessee challenged these assessments before the Appellate Assistant Commisioner inter alia on the ground that proceedings under section 34 were without jurisdiction inasmuch as the order passed by the Income-tax Officer under section 25A of the said Act was subsisting and had not been set aside by the Commissioner under section 33B of the Act. The con ten tion inshort was that the successor Income-tax Officer could not review the order passed by his predecessor under section 25A and was not competent to go into the validity of the claim that the joint Hindu family had disrupted. In appeal the Appellate Assistant Commissioner held that the Income-tax Officer was justified in initiating proceedings under section 34. He, however, felt that the question as to whether the family had or had not disrupted on 10th of May 1952 should have been first investigated by the Income-tax Officer. He accordingly set aside the assessments made by the Income-tax Officer and directed him to complete the assessments de now after passing proper orders under section 25A of the Act.

(3.) The assessee, aggrieved by the order of the Appellate Assistant. Commissioner, filed an appeal before the Income-tax Appellate Tribunal. It was contended there that it was never the assessee's case that the family had disrupted in May 1952 and consequently the authorities concerned were not competent to investigate whether the family had disrupted on 10th of May 1952 or not. The contention advanced before the Appellate Assistant Commissioner regarding the applicability of section 34 was repeated before the Tribunal. The Appellate Tribunal by its order dated 15th September, 1960, held that (a) the income sought to be assessed in the hands of the family had already been assessed in the hands of the coparceners of the fanuly who carried on business as firm Hariram Shri Ram, and (b) the Income-tax Officer having himself recognised the disruption of the Hindu undivided family under section 25A it was no longer open to him to reconsider whether the said order had been properly passed or not as the succeeding Income-tax Officer could not sit in judgment over the order passed by his predecessor and review the same. The Tribunal accordingly held that the proceedings under section 34 were had in law. In these circumstances the following question of law has been referred to this Court, under section 66(1) of the said Act at the instance of the Commissioner of Income-tax :-