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Tuljansa Janardhansa Pawar, Hubli Vs. Commissioner of Income-tax, Bombay South - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Reference No. 20 of 1949
Judge
Reported inAIR1950Bom332; (1950)52BOMLR421; [1950]18ITR648(Bom)
ActsIncome Tax Act, 1922 - Sections 25A and 30
AppellantTuljansa Janardhansa Pawar, Hubli
RespondentCommissioner of Income-tax, Bombay South
Appellant AdvocateJamshedji Kanga, Adv.
Respondent AdvocateAttorney-General of India
Excerpt:
indian income-tax act (xi of 1922), sections 30, 25a - appellate assistant commissioner--appeal, hearing of--notice of hearing to all persons concerned--rules of natural justice--legislature, presumption regarding.;the appellate assistant commissioner of income-tax hearing an appeal under section 30 of: the indian income-tax act, 1922, from an order passed by the income-tax officer (e.g. an order passed under section 25 a of the act), is bound to hear all parties interested in the appeal before he decides the appeal.;when an authority upon whom judicial functions are conferred has to decide or hear a case or an appeal, he can only do so provided he has heard all parties which are likely to be affected by the order which he is going to make.;it is a fundamental principle of natural justice..........that the family was a joint and undivided family. from this order subansa went in appeal to the appellate assistant commissioner and the appellate assistant commissioner heard further evidence and came to a conclusion contrary to that reached by the income-tax officer, and by his order dated the 3rd march 1944, he directed the income-tax officer to make an assessment in the manner laid down in section 25a(2) which proceed on the basis of there being partition. therefore, whereas the income-tax officer came to one conclusion, the appellant assistant commissioner came to the contrary conclusion. on the 31st of may, 1944, a notice of assessment was served on the applicant on the basis of his being a divided member of the family. the notice of assessment was taken out on the 31st may,.....
Judgment:

Chagla, C.J.

1. There was a joint and undivided Hindu family consisting of one Babansa and his three sons Janardhansa, Subansa and Appansa. Babansa died on the 26th June, 1938, and Janardhansa predeceased him having died on the 3rd January, 1926. Janardhansa left four sons of whom the applicant before us is one, and after the death of Janardhansa, Subansa was the Karta of this joint and undivided Hindu family. The family was assessed to tax as a Hindu joint family and Subansa made an application to the Income-tax Officer at the time of assessment for the assessment year 1943-44 that there had been a partition and that an order to that effect should be made. Section 25A contemplates an enquiry being made by the Income-tax Officer on notice being served on all the members of the family, and if the Income-tax Officer is satisfied on making such inquiry that the joint family property has been partitioned among the various members or groups of members in definite portions, he has to record an order to that effect. On the application of Subansa the Income-tax Officer served a notice on all the members of the family including the applicant, and having made the necessary inquiry came to the conclusion that the partition was not proved and that the assessment should proceed on the basis that the family was a joint and undivided family. From this order Subansa went in appeal to the Appellate Assistant Commissioner and the Appellate Assistant Commissioner heard further evidence and came to a conclusion contrary to that reached by the Income-tax Officer, and by his order dated the 3rd March 1944, he directed the Income-tax Officer to make an assessment in the manner laid down in section 25A(2) which proceed on the basis of there being partition. Therefore, whereas the Income-tax Officer came to one conclusion, the Appellant Assistant Commissioner came to the contrary conclusion. On the 31st of May, 1944, a notice of assessment was served on the applicant on the basis of his being a divided member of the family. The notice of assessment was taken out on the 31st May, 1944, and was served upon him on the 1st September, 1944, and the assessment was made on the 24th March, 1945. From this order of assessment the applicant preferred an appeal to the Appellate Assistant Commissioner and his grievance was that the Appellate Assistant Commissioner had come to the conclusion that there was a partition without his being heard at all and he was assessed as an individual without his being an opportunity to put forward his case. The Appellate Assistant Commissioner rejected the appeal of the applicant, the applicant went in appeal to the Tribunal, and the Tribunal also rejected his appeal.

2. Now, the question that arise for our determination is whether there was any obligation upon the Appellate Assistant Commissioner to hear the applicant before he made an order reversing the decision of the Income-tax Officer. The Attorney-General has our attention to the different in language between Section 25A Section 30. Whereas Section 25A provides for a notice being served by the Income-tax Officer on all the members of the family before any order is recorded under that section, Section 30 does not cast a similar obligation upon the Appellate Assistant Commissioner, and therefore the Attorney-General argues that in the absence of any statutory provision there was no obligation upon the Appellate Assistant Commissioner to serve the applicant with a notice and he was perfectly justified in recording evidence and in coming to the conclusion without the applicant being heard at all. In my opinion, this contention is entirely untenable. Section 30 confers the power upon the Appellate Assistant Commissioner to hear and decide appeals from an order made by the Income-tax Officer. When an authority upon whom judicial functions are conferred has to decide or hear a case or an appeals, he can only do so provided he has heard all parties which are likely to be affected by the order which he is going to make. It is a fundamental principle of natural justice that no judge or no person upon whom judicial powers are conferred can come to a judicial or a quasi-judicial decision without hearing all parties who are to be affected by his decision and we must always assume that the legislature who has knowledge of judicial principles and rules of natural justice impliedly, if not expressly, incorporate these rules whenever they confer judicial function upon a person or an authority. If these rules of natural justice are to be excluded, then we must find in the statue an express provision to that effect. Therefore, when we find in Section 30 that the Appellate Assistant Commissioner had to hear an appeal from the decision of the Income-tax Officer and to decide that appeal, we must hold that decision had to be in conformity with the rules of natural justice, and if a decision was arrived at by the Appellate Assistant Commissioner in contravention of the rules of natural justice, it was not a decision at all in law. It is not disputed by the Attorney-General, and indeed it cannot be disputed, that the right of the applicant were vitally affected by the decision arrived at by the Appellate Assistant Commissioner. Whereas he and the members of his family had been assessed as a joint Hindu family unit, behind his back and without hearing him, the Appellate Assistant Commissioner had held that he should be assessed as an individual. Therefore, in my opinion, the decision of the Appellate Assistant Commissioner cannot be supported at all and that decision was not binding and never bound the applicant. If that decision is bad and not valid in law, the assessment made on the applicant is equally bad because, as I said, that assessment was made on the basis of the applicant being an individual.

3. Therefore, the question that are submitted to us by the Tribunal must be answered as follow : Question (1) in the affirmative. We will amend question (2) and it should read thu : 'Whether the Appellate Assistant Commissioner was competent to take additional evidence in the absence of Tuljansa without notice to other members of the family'. So amended the answer must be in the negative. Question (3) in the affirmative. Commissioner to pay the costs of the reference. Notice of motion dismissed. No order as to costs.

4. Reference answered accordingly.


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