COMMISSIONER OF INCOME TAX Vs. ANAND C L

JUDGEMENT

(1.) INCOME-tax Reference No. 366 of 1982 is from R. A. No. 244 (Coch)/1982 arising out of I. T. A. No. 440 (Coch) of 1980 and INCOME-tax Reference No. 4 of 1983 is from R. A. No. 365 (Coch)/1982 arising out of I. T. A. No. 67 (Coch) of 1981. The assessees are the same in both the income-tax references but the assessment year is 1972-73 in INCOME-tax Reference No. 366 of 1982 and 1970-71 in INCOME-tax Reference No. 4 of 1983.

(2.) THE assessee is an individual deriving income by way of salary as managing director of the company, Toshiba Anand Batteries Ltd. THE original assessment for the year 1970-71 was completed on May 30, 1972, and for the year 1972-73 was completed on October 19, 1972. When the relevant returns were submitted, the assessee was a partner of the firm, Anand Water Metre Manufacturing Co., Kapurthala, as the karta of a Hindu undivided family. His wife, Smt. Sheela Rani Anand, was also a partner of the said firm and both the Hindu undivided family and Smt. Sheela Rani Anand were assessed to income-tax at Jullundur. During the previous years relevant to the assessment years 1970-71 and 1972-73, the share income of the assessee's wife was not included in the individual assessment of the assessee and it was the assessee's contention that he was a partner in the firm at Kapurthala in his capacity as the karta of the Hindu undivided family and, therefore, Section 64(1) did not apply to him in respect of the share income of his wife from that firm. THE Income-tax Officer reopened the assessments completed on May 30, 1972, arid October 19, 1972, for the assessment years 1970-71 and 1972-73 under Section 147(a) and brought to tax the share income of the assessee's wife from the firm. THE assessee filed appeals before the Commissioner of Income-tax (Appeals) objecting to the reopening and inclusion of the share income of the wife. THE Commissioner of Income-tax (Appeals) held that the assessee did not have any obligation under law to declare the income of his wife as part of his total income and there was no omission or failure on his part to disclose material facts to enable the Income-tax Officer to initiate action under Section 147(a). He also held that Section 64 applies only to a case where the individual and his spouse have income from the same firm and not to cases where the share income accrues to the Hindu undivided family represented by the individual who is assessed. In that view of the matter, he held that the assessee had no obligation to declare the income of his wife and the Income-tax Officer had no jurisdiction to reopen the assessment: THE Commissioner of Income-tax (Appeals), accordingly, cancelled the reassessments.

(3.) A copy of this judgment shall be sent under the seal of the court and the signature of the Registrar to the Appellate Tribunal, Cochin Bench.