A.N. Grover and; K.S. Hegde, JJ.
1. These are appeals by special leave arising from the decision of the High Court of Mysore in ITRC No. 14 of 1966. Therein the High Court pronounced its opinion on the two questions of law referred to it by the Commissioner of Income Tax, Mysore, Bangalore. The two questions referred for its opinion are :
“(a) Whether, on the facts and in the circumstances of the case, the assessments made under Sections 23(3) and 26(2) of the Mysore Income Tax Act, 1923, of Shri B.A. Sriramamurthy, the legal representative and successor to late Shri B.A. Appaiah Naidu, for Assessment Years 1946-47 and 1947-48 are ab initio bad for the reason that there is no provision in the Mysore Income Tax Act, 1923, corresponding to Section 24-B of the Indian Income Tax Act, 1922?
(b) Whether, on the facts and in the circumstances of the case, the Appellate Assistant Commissioner of Income Tax, ‘A’ Range, is justified in disposing of the appeals merely on the first additional ground involving the legal issue mentioned in Question 1 above, considering it as the preliminary issue, without considering the other grounds raised by the appellant before him, one of which grounds is to the effect that the assessor should be given the status of “Hindu Undivided Family” and, specially when such claim for the status of Hindu undivided family by the assessee has already been referred to the High Court by the assessee for Assessment Years 1950-51 and 1951-52?”
In this case we are concerned with Assessment Year 1946-47 the relevant accounting year ending on June 30, 1946 and 1947-48, the relevant accounting year ending on June 30, 1947. In both these years the assessee Sriramamurthy was assessed as the legal representative of his deceased father Appaiah Naidu. The notice under Section 23(2) had been served on Appaiah Naidu. Those assessments were made on January 15, 1963. Appaiah Naidu had died long before that date. The question for decision is whether the assessments in question are valid assessments.
2. The High Court decided the first question against the department. In so doing, it followed the decision of the Bombay High Court in CIT v. Mr Ellis C. Reid1. On the second question, it came to the conclusion that no purpose will be served by answering that question as no reassessment can be made against the assessee's H.U.F. as the same is barred by time.
3. Mr Solicitor-General appearing for the department does not challenge the correctness of the decision of the High Court on the first question. In fact, following the decision of the Bombay High Court in Reid case the Central Legislature had amended the Income Tax Act of 1922 and included in the Act Section 24-B.
4. Now coming to the second question as noticed earlier, the assessment was made in respect of the income of Appaiah Naidu on his legal representative, his son Sriramamurthy, in the status of an individual and not as the karta of his H.U.F. The department cannot now be permitted to change its case and contend that in reality the assessee is the H.U.F.
5. In the result these appeals fail and the same are dismissed with costs. Hearing fee one set.