VAIDIALINGAM J. - In this writ proceedings Mr. C.K. Viswanatha Iyer, learned counsel for the writ petitioner, challenges certain orders passed by the income-tax authorities by way of reassessment and also levying penalty. So far as the question of penalty is concerned, the larger contention that was raised was to the effect that when once the Cochin Income-tax Act, VI of 1117, has been repealed by the Finance Act of 1950, section 38 of the Cochin Act is no longer available to the officer for exercising his powers of levying penalty.
So far as this aspect is concerned, this contention is no longer available to the petitioner as will be seen from the recent decision of their Lordships of the Supreme Court in Commissioner of Income-tax v. Bhikaji Dadabhai & Co. Therefore, so far as this aspect is concerned, the writ petition will have to fail and we have to hold that the officer has powers and jurisdiction which could be exercised for levying penalty in appropriate cases.
Probably it is this contention that was taken in the writ petition which related really to the jurisdiction of the officer to levy penalty under the repealed Cochin enactment that gave a chance to the writ petitioner to approach this court under article 226 of the Constitution. But now that question is concluded against the petitioner and the matter to be considered is what are the other points available for adjudication by this court is proceedings under article 226. So far as this is concerned, we have to bear in mind the decision of their Lordships of the Supreme Court in C.A. Abraham v. Income-tax Officer, Kottayam. His Lordship, Mr. Justice Shah, speaking for the court, observes at page 428 as follows :
'The Income-tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper orders passed by the income-tax authorities, and the appellant could not be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Tribunal.'
In view of the clear exposition, if we may say so with respect, of the jurisdiction of court in matters arising under article 226 regarding assessment orders passed under the Income-tax Act, we could have dismissed the writ petition notwithstanding the fact that there are other contentions raised to which we will advert immediately. But Mr. Viswanatha Iyer also pressed before us that there are certain other decisions of the Supreme Court which will show that in such circumstances interference can be made by the High Court. But anyhow as we are adverting to the merits also in view of what is stated below it is are adverting to the merits also in view of what is stated below it is unnecessary to dilate on this aspect further.
But Mr. Viswanatha Iyer, learned counsel, very strenuously urged that he had already come to this court raising not only the power and jurisdiction of the authority of function under the repealed Cochin Act for levying penalty but he had also raised other contentions regarding the matter in which that power has been exercised, in regard to the levy of penalty in these proceedings. Ordinarily we would have referred the petitioner to the appropriate appellate forum which is constituted under the Act itself. But in the particular circumstances of this case to refer the petitioner to the Appellate Tribunal after a long lapse of time would result in hardship and therefore we have considered the other contentions that are raised by Mr. C.K. Viswanatha Iyer.
The contentions that are raised by Mr. C.K. Viswanatha Iyer are mainly two-fold. The first is the joint family in this case has disrupted by a regular partition deed executed on December 10, 1947, and therefore when reassessment proceedings were taken and penalty was levied the joint family as such had ceased to exist and therefore the officer had no power to levy penalty on the members of the joint family after such disruption under section 34 of the Cochin Act corresponding to section 25A of the Indian Income-tax Act.
The second contention raised is that in any event the person who was guilty of suppression was the deceased, Popatlal, and, therefore the officer had no power to levy a penalty on the succeeding karta or the succeeding manager of the joint family, namely, Amrithlal, the petitioner before us.
So far as this is concerned, we are again of the view that the question does not relate actually to the jurisdiction of the officer concerned, but really to a proper construction that is to be placed upon particular sections in the enactment in question.
Though some incidental attacks have been made against the order of reassessment also, we are not satisfied that there is any merit in this contention.
Now coming to the two contentions, the first contention, as we have already stated, is that after the partition of the family there is no power in the officer to levy penalty as against the members of the family though it may be for an act done during the time when the family was joint.
The relevant provision in the Cochin Act that has to be noticed in particular is section 34, sub-section (3) which provides :
'Where such an order has not been passed in respect of a Hindu family or a Marumakkathayam tarwad hitherto assessed as undivided, such family or tarwad shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family or undivided Marumakkathayam tarwad.'
The other sub-sections, namely, sub-sections (1) and (2), deal with the manner in which the division of the joint family is to be brought to the notice officer and what exactly he has to do when making an assessment under section 28. According to sub-section (3) it will be seen that, when no order recognising the division of the family under the provisions of sub-section (1) of section 34 has been passed by the Income-tax Officer after the necessary inquiry, it shall be deemed to be continuing to be a Hindu joint family.
Mr. G. Rama Iyer, learned counsel for the revenue, submitted that no order as contemplated by sub-section (1) of section 34 has ever been passed nor has the partition been recognised by the department in these proceedings.
In this connection, Mr. C.K. Viswanatha Iyer drew our attention to the analogous provision contained in the Indian Income-tax Act, namely, section 25A, and also to the provisions of the Indian Income-tax Act relating to levy of penalty. Learned counsel also invited our attention to a decision of the Andhra Pradesh High Court in Mahankali Subba Rao v. Commissioner of Income-tax, a decision of the learned Chief Justice, Mr. Subba Rao, as he then was, and Mr. Justice Mohammad Ahmad Ansari. The learned judges in that case had to consider section 25A of the Indian Income-tax Act with special reference to the powers of the assessing authority to levy penalty in respect of a family which had ceased to be joint on the date of levying penalty. In that connection, no doubt, the learned judges go into that aspect and come to the conclusion that there is a lacuna in the section and there is no provision in the statute which gives power to the Income-tax Officers to levy penalty on the divided members after the joint family status had ceased to exist. It will also be seen that the learned Chief Justice refers to two other decisions, namely, Commissioner of Income-tax v. Sanichar Sah Bhim Sah and Raju Chettiar v. Collector of Madras which are in accordance with the views expressed by the learned Chief Justice in the decision of the Andhra Pradesh High Court. These decisions were adverted to by their Lordships of the Supreme Court in C.A. Abraham v. Income-tax Officer, Kottayam. The learned judges observe at page 431 :
'But whether on the dissolution of a Hindu joint family the liability for penalty under section 28 which may be incurred during the subsistence of the family cannot be imposed does not fall for decision in this case;...'
If the question directly arises and if the petitioner is able to satisfy us that he has been able to obtain an order in the manner indicated in section 34(3) of the Cochin Act the decisions adverted to by the learned counsel and the power of the assessing authority is such circumstances will have to be considered directly by us and an opinion expressed one way or the other. But there is a difficulty for the petitioner created by the findings recorded in these proceedings by the Appellate Assistant Commissioner before whom the order levying penalty was taken up in appeal. Exhibit M is the order of the Appellate Assistant Commissioner. The petitioner appears to have raised the contention that the family has become divided and so far as that is concerned the Appellate Assistant Commissioner considers the materials that were made available before him and ultimately records a finding to the effect that not only has not the petitioner obtained an order under section 34(3) of the Cochin Act but he is even prepared to go further and say that no such claim appears to have been made at any time before the appropriate officers. In fact, the Appellate Assistant Commissioner seems to have directly put a question to the assessees representative as to whether a claim under section 25A(1) has been made and it is also stated that the appellates representative stated that such a claim is implied in the appellants letter. That letter is dated August 30, 1951. The contents of that letter are adverted to by the Appellate Assistant Commissioner and ultimately he is of the view that there is no reference to a partition deed dated December 10, 1947, in that letter nor to an order under section 25A(1) of the Act. Therefore, the Appellate Assistant Commissioner concludes by saying 'the original undivided family should therefore be deemed to continue for purposes of assessment proceedings'. In view of the finding recorded by the Appellate Assistant Commissioner on a pure question of fact and inasmuch as it has not been challenged by the petitioner before the appropriate Tribunal constituted under the Act itself, for the purpose of this writ petition we have to proceed on the basis that the findings recorded by the Appellate Assistant Commissioner are correct. Therefore, inasmuch as the petitioner has not been able to establish the essential requisite on which the contention is now sought to be raised it follows that the order of assessment levying a penalty on the joint family as such in the absence of any order having been obtained or any claim having been made on the basis of section 34(3) of the Cochin Act, the levy of penalty will have to be upheld by us.
Learned counsel urged another contention, namely, that a succeeding manager or a succeeding karta of a joint family cannot be visited with a levy of penalty. In support of this contention the learned counsel again referred us to a decision of the Madras High Court in Hariram Sait v. Commissioner of Income-tax. A perusal of the order of the Appellate Assistant Commissioner clearly shows that the fact that the appellant, namely, the petitioner, concealed the income was not disputed in the appeals before him. There is another circumstance to which also it is necessary to advert. Even in the affidavit that has been filed in this court, especially in paragraph 5, it has been stated that apart from suppressions stated to have been made by Poppatlal, the petitioner also was having some sort of personal dealings and that he also voluntarily disclosed the income of his personal ventures before the officer in pursuance of the compounding scheme started by the Government. The petitioner admits that the income voluntarily disclosed from his personal ventures during the years in question was not included also in any of the income-tax returns already submitted before the officers. No doubt, he gives some explanation in respect of these matters. We are only adverting to this to show that the contention of Mr. C.K. Viswanatha Iyer, learned counsel for the petitioner, that the levy of penalty in this case is really in consequence of an act of suppression not by the petitioner but by the deceased, Poppatlal, cannot be accepted in full especially because there appears to be considerable doubt in view of the matters mentioned in the affidavit itself. That explains the reason for the statement recorded by the Appellate Assistant Commissioner adverted to earlier that the petitioner did not contest the position that there has been a suppression of the profits. Therefore, this contention of Mr. Viswanatha Iyer also has to be rejected in view of the statements contained in the affidavit filed in support of this application taken along with the findings recorded by the Appellate Assistant Commissioner. Therefore, it follows that the petitioner is not entitled to any relief in these proceedings and the writ petition is dismissed. Parties will bear their own costs in these proceedings.