COMMISSIONER OF INCOME TAX Vs. K M S LAKSHMANA IYER

JUDGEMENT

(1.) THE question which arises in this reference is really answered by our judgment delivered on the 16th February, 1945, in V. M. Raghavalu Naidu & Sons v. Commissioner of Income-tax, Madras, R. C. No. 38 of 1944. THE assessee is a partner in two firms. He has a son who is a minor and the minor has been admitted to the benefits of these partnerships. THE share of the profits falling to the minor should have been included in the fathers assessment for the year 1938-39; but the Income-tax Officer, under a wrong conception of the law, did not include the minors share in calculating the income of the father, and the matter was left there. In the following year, the minors share was included. THE assessee took objection to this course and carried the matter to this Court which on the 15th September, 1941, held that the minors share was properly included in the assessment for the year 1939-40. On the 14th March, 1940, that is eighteen months before this Court had given its decision in the respect of the assessment for 1939-40, the Income-tax Officer served a notice on the assessee under Section 34 in respect of the sons share of the profits which had escaped assessment in the year 1938-39. THE Income-tax Appellate Tribunal held that the Income-tax Officer was not entitled to reopen the assessment for the year 1938-39 on this ground because he had already applied his mind to the question and had adjudicated upon it. At the instance of the Commissioner of Income-tax, the Tribunal has referred to this Court for decision under Section 66 (1) of the Act the following question :-