Satyanarayana Rao, J.
1. Under Section 66(1) of the Income-tax Act read with Section 21 of the Excess Profits Tax Act, at the instance of the Commissioner of Excess Profits Tax, the Income-tax Appellate Tribunal has referred to us the following question :
'Whether on the facts and in the circumstances of the case the Tribunal's decision that the proceedings initiated under the Excess Profits Tax Act against the Hindu undivided family by issuing notice on 8th August 1944 on a member of the disrupted family and assessing the family's income to excess profits tax thereon partition and disruption having been accepted by the department on 18th March 1943--was valid in law ?'
The assessee is a Hindu undivided family, viz. Messrs. Jivaraj Topun and Sons, Madras. The chargeable accounting periods with which we are concerned in this reference are (1) from 1st September 1939 to 11th November 1939, (2) from 12th November 1939 to 30th October 1940 and (3) from 31st October 1940 to 14th October 1941. A notice under Section 13 of the Excess Profits Tax Act was served on Tricumdas Jamunadas to file a return under the Act. In reply to that notice Jamnadas J. Topun submitted a nil return on 5th October 1944 in which it was stated that the family became divided on 4th October 1941 and that the Hindu undivided family which is treated as an assessee by the revenue authorities was no longer in existence. The partition put forward has been accepted by the department and there is no dispute now regarding it. The excess profits tax officer did not accept the nil return, but completed the assessment on the footing that the business was the business of a joint family and that the notice issued under Section 13 and served on a member of one of the groups that came into existence after the partition was valid. On appeal however the Appellate Assistant Commissioner disagreed with this view and set aside the assessment, which was confirmed on a further appeal by the Appellate Tribunal. The view taken by both the authorities was that as the undivided family ceased to exist on the date on which the notice was issued there was no basis for calling upon one o the members of the joint family which once existed as such to submit a return with reference to the business of the undividedfamily. It was pointed out by the Appellate Tribunal that Section 63 of the Income-tax Act which provides for service of notice and which is also a provision made applicable to proceedings under the Excess Profits Tax Act could not be applied to a case where the undivided family ceased to exist on the date of the notice. Hence this reference.
2. Mr. Rama Rao Sahib, the learned counsel for the Excess Profits Tax Commissioner, argues that the scheme of the Excess Profits Tax Act is that it is the business that is treated as assessable to tax and as there is no time limit within which an assessment could be made under the Excess Profits Tax Act, unlike the Income-tax Act, even if the business had ceased as there was a partition between the members of an undivided family, it was open to the authorities to assess the profits of that business under the Act by serving a notice on any member of the family to which the business once belonged. He drew our attention to the several provisions of the Act in support of his contention. Section 4 of the Act, is the charging section and it does not, in terms, refer to a person as being the assessee in respect of the profits of the business. But it would be noticed that the proviso to that section refers to Section 4(3) of the Indian Income-tax Act and the body of the section itself refers to the assessment in respect of any business to which the Act applies to be charged, levied and paid on the amount by which the profits during any chargeable accounting period exceed the standard profits. The word 'paid' in the context can only refer to a person and it is an indication that the Act contemplates assessment of tax on a person though on the basis of the profits from the business. This view to some extent, receives support from Section 5 of the Act which states that the Act is to apply to every business of which any part of the profits made during the chargeable accounting period is chargeable to income-tax under the provisions of Sub-clause (i) or Sub-clause (ii) of Clause (b) of Sub-section (1) of Section 4 of the Indian Income tax Act, 1922 or of Clause (c) of that sub section. No doubt the basis of the assessment is not the receipt of the profits but the acerual, whether it accrued to a resident or non-resident and whether the accrual was within or without British India. But here again it assumes that the assessment is on the person on the basis of accrual taking into consideration residence and non residence and accrual within and without British India, in the same manner as under the Indian Income-tax Act. No doubt Section 8 which provides for successions and amalgamations does not very much help us to decide the point, as it provides only for the manner of computing the standard profits in the cases of successions and amalgamations of businesses. The point, however, is put beyond doubt by Section 14, Sub-section (1) of the Act which provides for assessment of the tax after the returnis submitted in pursuance of a notice issued under Section 13 of the Act. It requires that the Excess Profits Tax Officer, after completing the assessment should furnish 'a copy of such order (that is the assessment order) to the person on whom the assessment has been made'. Sub-s (2) of that section imposes the liability to piy on the person carrying on the business in that period. Under Sub-section (3) if the business is carried on jointly during the chargeable accounting period, the assessment should be made upon the persons jointly and in the case of a partnership it should be in the name of partnership. Under Sub-section (4) if a person could be assessed either solely or jointly with other person or persons, in case of his death, the assessment may be made on his legal representative either solely, or jointly with the other person or persons. The provisions of this section, therefore, place the matter beyond doubt that the assessment of the tax is on the person in the same manner as under the Income-tax Act. No doubt, under the Income-tax Act the computation of the tax is on the basis of the income derived by a person from various sources; while under the Excess Profits Tax Act it is on the profits of a business of the person. A similar argument was considered by Viscount Finlay in Moore (H. M. Inspector of Taxes) (1928) 12 Tax Gas. 266 at pages 285 and 286 It was argued there also on behalf of the Crown that the excess profits duty was a tax upon the business itself as distinguished from the person who owns or carries on that business. It was urged in support of that contention in that case that the business was continuous and the profits of that business were taken as the basis for assessing the tax under the Act and therefore it was argued that the assessee under the Act was the business and not the person owning it. This argument was met by Viscount Finlay at page 286 in the following passage:
'It is quite true that the statute imposing the excess profits duty treats the business as continuous for one purpose. As ita name denotes, the excess profits duty is charged is respect of'the excess of the profits yielded by any business after the outbreak of war as compared with its yield before the war. The business is regarded as remaining the same, although the person by whom it is carried on may have changed. This is consistent with the popular conception of a business as a thing which may exist for a century or more while the persons through whose hands the business maj have changed over and over again from generation to generation by transmission or transfer and it cannot be disputed that this conception of the business as an entity which continues is correct. But though for this purpose the business is treated as continuous the essential incidence of the tax is upon the person by whom it is conducted at the time in question. Just as a rate is imposed upon the occupant is respeot of the house, so income-tax and super tax are imposed upon individuals in respect of the business. The yield of the business during any particular period depends upon the amount of profit which is got from it by the person carrying it on for the time being, and this must largely depend upon his personal qualities. The profits are not earned by the business, they are earned by the person who carried it on.'
3. There is no reason, therefore, for accepting the extreme contention urged by Mr. Rama Rao Sahib on behalf of the Excess Profits Tax Commissioner that the entity which is taken as the basis for assessment is a business under the Excess Profits Tax Act and not a person owning or carrying on the business.
4. The next contention of Mr. Rama Rao Sahib is based upon the language of Section 13 of the Act. His argument is that the language of Section 13 is wide enough to justify the notice on any member of the family which carried on business during the chargeable accounting periods even though the family as a unit had ceased to exist by the time the department came to issue the notice under that section. Under Section 21 of the Act, some sections of the Income tax Act were made applicable to this Act but those sections do not include Section 25 A of the Income-tax Act which continues the joint family as a unit for the purposes of assessment notwithstanding disruption of the family, subject to certain limitations. It is the absence of this provision that is strongly relied on by the Appellate Tribunal and also by the learned counsel for the respondent, the assessee in this case. The absence of such a provision in the Excess Profits Tax Act would undoubtedly have the effect of making it practically impossible for the Excess Profits Tax authorities to assess to tax the business of an undivided family if it had ceased to exist by the time the notice under Section 13 came to be issued, unless Mr. Rama Rao Sahib's contention is well founded.
5. A 'person' as defined under the Act includes a Hindu undivided family, vide Section 2, Sub-section (17). The person, therefore, referred to in Section 13 must be interpreted to mean in the context either an individual who carries on business in the case of a business owned only by an individual and an undivided family in case the business was carried on by an undivided family as a unit. If so, the flection would require that the notice should issue to a person whom the authorities believe to be engaged in any business to which the Act applies or to have been so engaged during any chargeable accounting period; or to be otherwise liable to pay excess profits tax; and the object of the notice is to require such person to furnish within a stated time a return in the prescribed form of the profits of the business and the standard profits of the business as computed in accordance with the provisions of the Act. This practically is the first step in the initiation of the proceedings to assess profits to tax under the Act. In the case of an undivided family which has ceased to exist it cannot be said that any member of the family who once belonged to that family when it was joint is liable under the Act to pay the tax in respect of the profits of the business which was once owned by the undivided family, for under Mitakshara Hindu law no member of the family is entitled to treat the income of the family as his exclusiveincome or even to assert that he was entitled to any particular share, though the position is different under the Dayabhaga law. Therefore it follows that the person to whom notice should go must necessarily refer, in the case of an undivided family, to the undivided family engaged in the business the profits of which are sought to be charged under the Act. In such a case, if the family continues to be joint, there is no difficulty because under Section 63 of the income-tax Act which is made applicable to proceedings under the Exeess Profits Tax Act, a notice or requisition in the case of an undivided family may be addressed to the manager or any adult male member of the family But that again assumes that the family as a unit continues to exist as such without divisions and that there was either a manager or an adult male member of that family on whom service of the notice contemplated by Section 13 could be effected. If the business was once a business owned by the joint family and it is the profits of that business during the chargeable accounting periods that are sought to be charged and assessed under the Excess Profits Tax, and if by the time the notice is issued the joint family ceased to exist there is no provision under the Act to assess that undivided family which has become defunct and there is no procedure by which service of notice requiring the undivided family to submit a return can be effected. It is no doubt a lacuna in the Act and the result may be unfortunate from the point of view of the department. But it cannot be helped as we have to construe the language of the section as it stands and it is not open to us to fill up the gaps in the legislation with a view to catch the profits of an assessee like the present, who taking advantage of the omission in the Act escapes assessment.
6. We think, therffore, that the view taken by the Appellate Tribunal is correct and the question referred to us muss be answered in favour of the respondent and against the Commissioner. As the respondent has succeeded in this reference, he is entitled to his costs which we fix at Rs. 250 payable by the Commissioner.