V. G. OAK C.J. - These two special appeals arise out of proceedings under the Excess Profit Tax Act, 1940. There was a Hindu undivided family known as 'Ramnath Ram Prasad.' Ram Prasad was the karta of the Hindu undivided family. There was a disruption of the family some time by October 1, 1951. Under a scheme of voluntary disclosure, authorities were informed about a sum of Rs. 2,08,450 as income of the Hindu undivided family. Income-tax was assessed on that income. The authorities proceeded to assess excess profits tax on the same income. Three notices were issued under section 13(1) of the Excess Profits Tax Act on February 14, 1957. Another notice under the same Act was issued on April 18, 1958, under section 15 of the same Act, Ram Prasad and others field two writ petition challenging the validity of the various notices issued under section 13(1) and 15 of the Act. The two connected special appeals by the Income-tax Officer, Gorakhpur, are directed against these orders, dated December 8, 1961.
The main point urged for the petitioners before the learned single judge was what, in view of the fact that the Hindu undivided family disrupted as long as October 1, 1951. Proceeding under the Excess Profits Tax Act could not be initiated in 1957 or 1958. This contention has been accepted by the learned single judge.
He relied upon Commissioner of Excess Profit Tax v. Jivaraj Topur and Sons. It was held by the Madras High Court in that case that there as no provision in the Excess profit Tax Act to assess a Hindu undivided family which had become defunct.
The same view was taken by a Division Bench of the Allahabad High Court in Commissioner of Income-tax v. Neekelal Jainarain. It was held by this court that the business of the Hindu undivided family on which notice under section 13 of the Excess Profits Tax Act had been served before the disruption on the Hindu undivided family could not be subjected to excess profits tax after the disruption of Hindu undivided family.
Mr. Gopal Behari appearing for the appellant urged that these decisions are not sound, and require reconsideration. He relied upon a decision of the Supreme Court in E. M. Muthappa Chettiar v. Income-tax Officer, Special Circle, E. P. T. Cirle, Coimbatore. It was held by the Supreme Court that, even assuming that a firm had been dissolved on some date anterior the assessment, the dissolution did not affect the validity of the assessment order passed after notice to the person in management of the business during the chargeable accounting period, since it was not the firm but the business that was the unit of assessment. As section 44 of the Income-tax Act was made applicable by section 21 of the Excess Profits Tax Act to the latter Act, the procedure applicable to an undissolved firm was attracted to a dissolved firm, and the partners continued to be liable jointly and severally even after dissolution as they were liable before dissolution. As the provision of section 63 of the Income-tax Act were also applicable to proceedings under the Excess Profit tax Act notice could be issued to and served on a partner of the firm, even if by the date notice as issued the firm was dissolved. In that case the Supreme Court was dealing with a dissolved firm. In the present case we are dealing with a joint Hindu Family, which was disrupted several years before the impugned notices were issued which was disrupted several years before the impugned notices were issued.
Mr. Gopal Behari points out that section 44 and 63 of the Income-tax Act have been made applicable to proceeding under the Excess Profits Tax Act. Sub-section (1) of section 44 of the Income-tax Act state :
'Where any business, profession or vocation carried on by a firm or other association of persons has discontinued or where a firm or other association of persons is dissolved, the Income-tax Officer shall make an assessment of the total income of the firm or other association of persons as such as if no such discontinuance and taken place.'
It is true that section 44, Income-tax Act, governs an association of persons. But the question remains whether the expression 'association of person' covers a joint Hindu family. Section 3 of the Income-tax Act, is the charging section. Section 3 mentions the expression 'Hindu undivided family' as well as the expression 'association of person'. Section 25A of the income-tax Act provides for assessment after partition of a Hindu undivided family. The learned single judge has pointed out that section 25A of the Income-tax Act does not govern proceedings under the Excess Profits Tax Act. Considering that the Income-tax Act contains a special provision for assessment after partition of a Hindu undivided family, it is at lest doubtful whether the expression 'association of person' used in section 44 of the Income-tax Act covers a Hindu undivided family.
No doubt section 63, Income-tax Act, makes a definite mention of Hindu undivided family. But section 63, Income-tax Act, is largely concerned with the mode of service of notice. Section 63, Income-tax Act, does not deal with the basic question whether it is permissible to proceed against a Hindu undivided family long after its dissolution.
The orders under appeal can be supported on another short ground. All the impugned notices have been addressed to M/s. Ram Nath Ram Prasad, Hindu undivided family. It is significant that notices issued in 1957-58 were addressed to the alleged Hindu undivided family, although it is common ground that that Hindu undivided family was disrupted by the year 1951. It is a well-recognised principle that it is not possible to initiate legal proceeding against a deal person. On the same principle, it is not permissible to initiate taxation proceedings against an entity, which is no longer in existence.
Lastly, it was urged by Mr. Gopal Behari that Ram Prasad having made voluntary disclosure, it is not open to him to object to taxation consequential to the voluntary disclosure. Presumably, the voluntary disclosure was for the purpose of avoiding criminal protection and imposition of penalty. The application of voluntary disclosure is not on the record. It is not therefore clear that the voluntary disclosure as for the purpose of taxation under the Excess Profits Tax Act. Since there was no clear submission to taxation under the Excess Profits tax Act, there can be no consideration by way of estoppel or acquiescence.
We see no particular ground for differing from the view taken by the Division Bench in Commissioner of Income-tax v. Neekelal Jainarain. Further, as pointed out above, the notices were issued against an entity, which was no longer in existence. For these reasons, the learned, single judge was justified in quashing notices under section 13(1) and 15 of the Excess Profits Tax Act. All that the learned judge has done is to quash certain notices. He made it clear that the orders dated December 8, 1961, will not preclude the present appellant from proceeding against the respondents in any other manner permissible under the law.
Each of the two special appeals is dismissed with costs.