(Judgment of the High Court was delivered by Patanjali Sastri, J.)
The assessee is the manager of a joint Hindu family having its residence at Secunderabad outside British India. He was assessee on behalf of the family for the assessment years 1939-40 and 1940-41 in respect of the family income accruing not only in British India but also abroad, the family being treated as resident in British India under the provisions of Section 4-A (b) of the Income-tax Act. The assessee appealed to the Income-tax Appellate Tribunal which did not agree with the view that the family of the assessee was resident in British India within the meaning of the section referred to above and directed that he should be assessed as a reference non-resident. The Commissioner of Income-tax, having asked for a reference to this Court on this question, the Appellate Tribunal has stated the case and referred the following question for the opinion of this Court :-
'Whether on the facts found by the Tribunal the assessee can be said to be a resident in British India within the meaning of Section 4-A (b) of the Indian Income-tax Act ?'
The facts found by the Appellate Tribunal are as follows :-
The family resides at Secunderabad and the manager (the respondent before us) also resides with the family at that place. The family however carries on business at Guntur and also at Bombay through agents duly authorised in that behalf. The respondent visited Guntur during the accounting year and stayed there in a portion of the business premises for two days; he arrived on the 2nd April and left Secunderabad on the 4th. On these facts it is contended for the applicant before us, the Commissioner of Income-tax, Madras, that the respondents family was resident in British India within the meaning of Section 4-A (b) of the Income-tax Act, as the control and management of the affairs of the family was exercised by the respondent who stayed at Guntur for two days as stated above. It has, however, been found by the Tribunal that during his stay the manager exercised no act of management or control in respect of the business at the place.
Section 4-A (b) reads thus : 'For the purposes of this Act, a Hindu undivided family, firm or other association of persons is resident in British Indian unless the control and management of its affairs is situated wholly without British India.'
The question is whether on the facts stated above it could be said that any part of the Management or control of the affairs of the family was situated within British India. The answer to this question, it seems to us, should clearly be in the negative. The mere visit to the manager of the family to Guntur and his stay there for two days cannot amount to the exercise of control and management of the affairs of the family at Guntur in the absence of anything to show that during such stay he actually exercised any act of control or management. We are of opinion that on the facts found the question referred to this Court should be answered in the negative.
The applicant will pay Rs. 250 to the assessee for his costs.
Reference answered in the negative.