JAGANMOHAN REDDY - This is a petition for the issue of a writ of mandamus directing the respondent to make payment of the amount as per the order in General Index No. 62-R dated April 30, 1949, issued in favour of the petitioners or to issue any appropriate writ or direction to the respondent and pass such other or further orders as the court think fit. The petitioners carried on business under the name and style of Kakkirala Rama Rao & Sons, at Rajahmundry, consisting of of Kakkirala Rama Rao and his two sons, Kamaraju and Aatmaram. The firm of the joint family was assessed to income-tax for the year 1948-49 at Rs. 140-12-0 and after this sum was deducted from the advance of Rs. 3,375-15-0 paid under section 18A of the Indian Income-tax Act, a sum of Rs. 3,336-2-0 including interest thereon became refundable. An order to that effect was ought to have been passed on April 30, 1949, in which it was also stated a refund voucher for the said sum will be sent later on; but in spite of reminders and addressing communications dated May 13, 1949, and August 22, 1949, requesting the Income-tax Officer, Rajahmundry, the voucher was not sent. It is further alleged that the father issued a notice to his sons on August 21, 1949, communicating his intention to become divided in status with them and called upon his son, Atmaram, to settle his accounts in respect of his separate drawings for his person and separate business carried on by him under the name and style of Lakshmi Trading Co., that on settlement of accounts on September 2, 1949, an amount of Rs. 32,542-13-0 was found due from Atmaram to the family; that in lieu of this amount found due he relinquished his share in the family business and an agreement was executed by him evidencing the above terms and that in spite of communications addressed to the Income-tax Officer, dated April 5, 1951, January 2, 1953, April 27, 1953, and September 29, 1953, no reply was received, but on November 26, 1954, of the Income-tax Act attaching the amount due to the petitioner and his sons, for arrears of income-tax separately due from the other sons, Atmaram, in his individual business on the ground that Atmaram had a subsisting interest in the refundable amount. It is alleged that having regard to the settlement arrived at between Atmaram and the other members of the family, his shares was appropriate towards the debt due from him and that he has no subsisting interest in the amount due from the Income-tax Department. It is also stated that subsequent to the assessment year 1948-49 there was disruption of the family and the family business was stopped and that there was also no further assessment to income-tax for the family after April 30, 1949.
In the counter the respondent, Income-tax Officer, contended that inasmuch as the petitioners had served a notice under section 80 of the Code of Civil Procedure on September 22, 1954, stating that unless the sum of Rs. 3,336-2-0 together with interest at six percent. from May 1, 1949, be paid, a suit against the Central Government for recovery of the amount will be filed, the writ petition should be dismissed. It was, however, admitted that Rs. 3,336-2-0 was due to the family of K. Rama Rao, K. Atmaram and K. Kamaraju after the completion of the assessment of the family for the year 1948-49. It is alleged of that K. Atmaram had indulged in black marketing on an extensive scale and a demand of Rs. 33,348-13-0 was raised against him for the said assessment year; that as against that sum, after adjustments, etc., a sum of Rs. 16,619-7-0 was found due, which demand was reduced to Rs. 5,719-9-0 by the Appellate Tribnunals order; that to recover these arrears, proceedings were initiated by the Income-tax Officer by the issue of a notice under the provisions of section 46(5A); and that a certificate to the Collector under section 46(5A) for attaching the properties of the family was also issued, but Board of Revenue, Madras, directed the Collector on August 2, 1949, to release the properties of the family from attachment. The counter further assailed the assertion of the petitioners that there had been a division or that the share of Atmaram was appropriated towards the debt due from him or that an amount of Rs. 32,542-13-0 was found due by Atmaram. It is stated that the fact that soon after the release of the properties from attachment by the Collector, Atmaram executed an agreement to relinquish his interest in the joint family properties as well as the fact that there was neither a relinquishment deed actually executed by Atmaram nor a partition deed clearly point to the whole affair being a device to defeat the Government from collecting the arrear demand from the defaulter. It was further stated that the share of Atmaram was valued at Rs. 9,287-3-6 and therefore the Income-tax authorities were right in attaching the refund payable to the joint family in which Atmaram had an interest, under section 46(5A) of the Income-tax Act.
The question in this writ petition shortly is whether the Income-tax authorities had jurisdiction to attach the entire amount of Rs. 3,336-2-0 on the assumption that Atmaram has relinquished his share in the joint family. It may be stated that the Additional Income-tax Officer by his letter dated December 11, 1954, informed the petitioner that the notice under section 46(5A) dated November 26, 1954, was not issued to him attaching any amount on account of his assessee, but the notice was issued to the Income-tax Officer, Rajahmundry, attaching the amount in which the assessee had interest and that a copy of the notice issued to the Income-tax Officer, Rajahmundry, was sent to him for information I may here observe that the statement that no assessment was made on the joint family after April 30, 1949, is not borne out by the record filed by the learned advocate for the Department, because I find that for the year 1951-52 the first petitioner filed a nil return for the joint family in which Atmaram and Kamaraju were shown as constituting the joint family. Under section 25A where it is claimed by or on behalf of any member of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income-tax Officer is empowered to make an enquiry after giving property has been divided in definite portions. Sub-section (3), however, makes it clear that where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family. The statutory provisions do not intefere with the ordinary law as to division in status and partition, etc., but for the purposes of the Income-tax Act an order by the Income-tax Officer regarding the partition is necessary before the family can be treated as divided. It is true that the claim is now sought to be made in any proceedings. As such there was no occasion for any order to be passed. But all the same sub-section (3) is clear and provides that once a Hindu family is assessed as a joint family, it must continue to be so assessed even after disruption unless and until an order is passed under sub-section (1) recognising the partition and that no such order can be passed unless there has been a complete physical division of the family property. The questions whether the complete physical partition of the family property is made or whether the relinquishment by Atmaram was a genuine one or whether he in fact toward a sum of thirty-two thousand and odd to the joint family or whether it was in fact payable by him are all questions of fact requiring evidence and cannot be enquired into or determined in this writ petition. For the purposes of income-tax assessment, therefore, the family of the pointers must be deemed to still continue, with Atmaram as one of its members, even on the basis of the nil return filed; and the refund is payable to the joint family as such. Learned advocate for the petitioner submits that, without prejudice to his other contentions, even on the assumption that the joint family continues the entire amount due as refund to the joint family cannot be attached by the Income-tax Officer for the realisation of arrears due from one of its members individually, by that his share alone can be attached. Learned advocate for the Department, on the other hand, contends that, since the share; of Atmaram in the joint family is more than three thousand, this amount can be attached. It is, I think, clear law that no coparcener can before partition claim any specific property as his own, though he has an undivided interest in every specific property. According to the Mithakshara as applied in Bombay and Madras, though a coparcener may alienate his undivided interest either in the whole of the joint family property or in a specific property forming part of the joint family property, he has no right to alienate his interest in specific property, for, as already said, no coparcener can before partition claim any such interest as his own. If he does alienate, the alienation is valid only to the extent of his undivided interest in that property and no more. If as the Income-tax Department contends the joint family exists, then they cannot attach the entire amount belonging to the joint family for the debt due from one of the coparceners, individually.
The relevant portion of section 46(5A) is as under :
'(5A) The Income-tax Officer may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the Income-tax Officer) require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Income-tax Officer, either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the taxpayer in respect of arrears of the income-tax and penalty or the whole of the money when it is equal to or less than that amount.'
From the above provision it cannot be said that the refund money is due or has become due to the asseessee, Atmaram, nor can it be said that the Income-tax Officer, Rajahmundry, was holding this money on behalf or on account of Atmaram. No doubt Atmaram has an undivided interest in the refund money, if it is to be held that the relinquishment of his interest, which is admitted as a fact, is not valid, but that does not justify the conclusion that the money or any portion of it became payable to him. The issue of a notice under this sub-section is something analogous to garnishee proceedings under Order XXI, rules 46 - 52, of the Code of Civil Procedure, and have been inserted to enable the Income-tax Officer to collect tax from amounts due or becoming due to the assessee from any person who holds or may subsequently hold money for or on account of the assessee and to give a sufficient discharge of the liability Order XXI, rule 46, it has been held in Kurseong Hydro Electric Supply Co. Ltd. v. Lakshmi Narayan Sukhani that a debt due to a firm cannot be attached by the process prescribed in Order XXI, rule 46, in execution of a decree obtained not against the firm or the partners as such, but against one or some of them not qua partner or partners but in his or their individual capacities, because a debt due to a firm from a customer is the property of the firm within the meaning of Order XXI, rule 49, and that garnishee proceedings cannot be taken in respect of debt due to a firm in execution of a decree against the partners in their individual capacities. Mitter, J., observed :
'The first question therefore is whether a debt due to a firm can be attached by the process prescribed in Order XXI, rule 46, in execution of a decree obtained not against the firm or the partners as such, but against one or some of them not qua partner or partners but in his or their individual capacities. The rules of the Civil Procedure Code beginning from Order XXI, rule 43, and ending with Order XXI, rule 54, provide for attachment of different kinds of property and prescribe different kinds of processes for effecting attachment which are appropriate to the nature of the property sought to be attached.'
After discussing the scheme of the Act, Mitter, J., proceeds to observe :
'The scheme is not to break up the firm by a direct action on the part of the executing court, or to paralyse or hamper the activities of the firm by intercepting any part of its gross income. The share of the judgment debtor in the profits - the net income - can only be intercepted through the receiver for the purpose of making satisfaction to the judgment - debtor or the interest of the judgment - debtor in the partnership as a going concern can be sold leaving it to the purchaser at the court sale to take such steps as he may be advised to take... The scheme is based on a broad head of public policy, namely the protection of commerce, which is considered to be an important source of national wealth.'
No doubt it may be said that as the are specific provision in the Civil Procedure Code under Order XXI, rule 49, the analogy of attachment of partnership amounts for debts due from individual partners is not applicable to the case of attachment of refund amount under section 46(5A) of the Income-tax Act; but having regard to the fact that the debt itself is not attachable under Order XXI, rule 46, unless it is obtained against the firm or the partners as such, there seems to be no possible reason why that analogy cannot be made to apply to the provisions of section 46(5A). That apart, as I have already stated, refund is not payable to the assessee as such, even though the assessee may have an interest in the amount as one of the members of the joint family. It has already been pointed out that no member of the joint family can claim any specific property as his share nor can he claim that any specific portion belongs to him. In these circumstances it appears to me that the amount in the hands of the Income-tax Officer refundable to the joint family cannot be appropriated. That however, does not preclude the Department from resorting to other modes of recovery of tax provided by the section or otherwise.
It is again argued that this petition should be dismissed because there is an alternative remedy by way of suit, inasmuch as the assessee has given a notice of suit under section 80 of the Code of Civil Procedure. As has been stated in several cases, the existence of an alternative remedy does not prevent writ petitions being entertained or a remedy by way of a writ being afforded to aggrieved parties, if that alternative remedy is not efficacious or involves the party in expenses and harassment. In other words, the circumstances of each case must be taken into consideration. In this case the pursuit of an alternative remedy of a suit would certainly involve the joint family in having to pay a court-fee and the attendant inconveniences of a long protracted litigation.
In the result, the Income-tax authorities are directed to refund the amount to the joint family without prejudice to their right to attach and recover the tax due from Atmaram from out of his share of the joint family properties, if any, subsisting. The petition is allowed with costs. Advocates fee Rs. 100.