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Commissioner of Income-tax Vs. Anil Kumar Roy Chowdhury and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference Nos. 73 and 149 of 1964
Judge
Reported in[1971]81ITR207(Cal)
ActsIndian Income Tax Act, 1922 - Sections 25A and 66(1)
AppellantCommissioner of Income-tax
RespondentAnil Kumar Roy Chowdhury and ors.
Appellant AdvocateK. Sen and ;B. Gupta, Advs.
Respondent AdvocateD. Pal, ;P. Pal and ;N. Dutt, Advs.
Cases ReferredSunder Singh Majithia v. Commissioner of Income
Excerpt:
- p.b. mukharji, actg. c.j. 1. these are two income-tax references. one is income-tax reference no. 73 of 1964. the other is the income-tax reference no. 149 of 1964. they relate to the same parties. they raise common questions of fact and law. the tribunal on its own referred one question under section 66(1) of the income-tax act, in the following terms :' (1) whether, on the facts and in the circumstances of the case, the tribunal was justified in placing the burden of proof upon the department and excluding the income from pakistan agricultural properties from the assessee's income ?'2. thereafter, upon an order by this court, the tribunal was directed to refer the following three other questions to this court under section 66(2) of the income-tax act:' (a) whether, on the facts and in.....
Judgment:

P.B. Mukharji, Actg. C.J.

1. These are two income-tax references. One is Income-tax Reference No. 73 of 1964. The other is the Income-tax Reference No. 149 of 1964. They relate to the same parties. They raise common questions of fact and law. The Tribunal on its own referred one question under Section 66(1) of the Income-tax Act, in the following terms :

' (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in placing the burden of proof upon the department and excluding the income from Pakistan agricultural properties from the assessee's income ?'

2. Thereafter, upon an order by this court, the Tribunal was directed to refer the following three other questions to this court under Section 66(2) of the Income-tax Act:

' (a) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that Section 25A of the Indian Income-tax Act, 1922, had no application in the present case?

(b) If the answer to question No. 1 (i.e., (a)) is in the negative, then, whether, on the facts and in the circumstances of the case, the Tribunal was right in placing the onus upon the department to prove that the agricultural income in Pakistan belonged to the Hindu undivided family and still retained that character ?

(c) If the answer to question No. 2 (i.e., (b)) is in the negative, then, whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the agricultural income in Pakistan did not belong to the assessee-Hindu undivided family, and in directing exclusion of the said income from the assessable income of the family ?'

3. There was a direction in the order passed by this court under Section 66(2) of the Income-tax Act, that Income-tax Reference No. 149 of 1964 shall be heard along with the earlier one, i.e., Income-tax Reference No. 73 of 1964.

4. We shall, therefore, on these facts and circumstances, dispose of both these references by one judgment.

5. The facts giving rise to these questions should be set out at the outset. The assessment year is 1948-49 for which the relevant previous year is the year 1354 B. S, The assessee is a Hindu undivided family. A sum of Rs. 1.96,045 was added to its income being an income from agricultural activities carried on in Pakistan. There is no dispute with regard to the quantum determined. By the amendment of the definition of ' agricultural income ' made in the year 1950 such income accruing in a foreign country is taxable under the Indian Income-tax Act. The assessee did not include that income in its return. The Income-tax Officer assessed that income besides certain others with which this reference is not concerned, in thehands of the assessee. In doing so he relied upon not only the order passed by the Agricultural Income-tax Officer of Pakistan dated 18th February, 1949, but also upon the Pakistan Income-tax Officer's order of assessment dated 27th February, 1950, both of which appear in the paper-book. In the assessment order of the Agricultural Income-tax Officer of Pakistan dated 18th February, 1949, the status shown by the Pakistan Agricultural Income-tax Officer was 'individual'. But in the body of the order it was clearly stated by the Pakistan Income-tax Officer that the four brothers who constitute the Hindu undivided family here in India for the purposes of income-tax: had equal shares in the properties which were ' jointly managed ' and it was only for convenience and facility of the assessment work that the total agricultural income derived from the entire property was determined by the Pakistan Agricultural Income-tax Officer first and then each was apportioned his share of the income. In that order the Pakistan Agricultural Income-tax Officer clearly came to the finding that each assessee had 1/4th share in the property but did not come to a finding that these were divided shares and he calculated the total agricultural income shown in schedule 'A' to his order in the share of each of the assessees considered as individuals.

6. But then in me order of assessment of the Pakistan Income-tax Officer dated the 27th February, 1950, these very assessees were treated as a Hindu undivided family. We, therefore, have the evidence of these two orders of the Pakistan Agricultural Income-tax Officer and of the Pakistan Income-tax Officer, one treating the assessees as individuals and the other treating the assessees as Hindu undivided family, and then in the order treating the assessees as individuals the fact is recorded that these four brothers were jointly managing the agricultural properties and it was only for the purpose of convenience and facility of assessment that the total agricultural income derived from their entire property was derived first and thereafter the incidental allocation or apportionment was made to the share of each assessee.

7. On that evidence contained in these two orders of assessment for Pakistan, the Indian Income-tax Officer included the agricultural income from Pakistan, namely, the balance of Rs. 1,96,045, as income under the head 'Other sources' for these assessees who are being assessed as a Hindu undivided family by the Indian Income-tax Officer.

8. It will be appropriate at this stage to notice that the Indian Income-tax Officer in his assessment order dated 27th February, 1953, records the fact that the assessment was being made by him under Section 23(3) of the Income-tax Act. He records the further fact that, in response to the notice under Section 23(2), the representatives on behalf of the assessee, i.e., the Hindu undivided family, produced the bank books of the Imperial Bank ofIndia (Mymensingh Branch), Calcutta, and the Lloyds Bank, Calcutta. The Indian Income-tax Officer also records the fact that in spite of his repeated requests, the assessee expressed his inability to produce the cash book and the ledgers from the estate in Pakistan. It is also recorded there as a fact that the assessee does not keep any record in Calcutta of his income from zamindary and other sources in Pakistan. There is the further record in his order that he had requested the assessee to furnish the details of remittances received from Pakistan, both agricultural and non-agricultural, and to produce evidence in respect thereof. In compliance with that request, it was stated by the assessee that remittances received during 1354 B.S. from Mymensingh after the 15th August, 1947, amounted only to Rs. 20,000 credited in Lloyds Bank and Rs. 10,000 credited in the Imperial Bank, but, it is recorded, the assessee could not establish the exact sources from which the remittances were receive^ although the assessee was given sufficient opportunities. The other evidence was contained in the two orders of assessment in Pakistan, viz., one by the Pakistan Agricultural Income-tax Officer and the other by the Pakistan Income-tax Officer. It is also recorded in the order of the Indian Income-tax Officer that the assessee had declared that remittances received during the year 1354 B.S. from Mymecsingh were only Rs. 30,000 out of which Rs. 20,000 were credited to the Lloyds Bank and Rs. 10,000 credited to the Imperial Bank of India.

9. The assessee appealed before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner dismissed the appeal on the point now under discussion. The Appellate Assistant Commissioner in paragraph 10 of his order dated 17th March, 1962, stated as follows :

' The representative has raised an additional ground at the appellate stage that the four members of the Hindu undivided family have been assessed in their individual capacity at Mymensingh by the agricultural income-tax authority of Pakistan and, therefore, the assessment of the income from Pakistan in the hands of the Hindu undivided family is not justified. It is not known on what basis the assessments have been made in the hands of the individuals by the Pakistan authorities. For the purpose of Indian income-tax, however, the provisions of Section 25A of the Income-tax Act are applicable in respect of assessment on the Hindu undivided family. Under that section it is necessary that a claim for partition should be made and after enquiries the Income-tax Officer should be satisfied that the joint family properties have been partitioned and then only the properties belonging to the Hindu undivided family can be taken as partitioned among its members. In the present case I find that the appellant filed the return of income in the status of Hindu undivided family and there was no claim for partition of any of the properties and as such the contention raised by the representative is totally irrelevant and is required to be rejected.

10. This raised the whole point of controversy. Before proceeding further, it is essential to notice here at this stage that the Appellate Assistant Commissioner records that the present contention of the assessee is that the four properties of the Hindu undivided family have been assessed in their individual capacity at Mymensingh and, therefore, the assessment of income from Pakistan in the hands of the Hindu undivided family was not justified. In other words, the whole contention of the assessee before us has been that the income of the Hindu undivided family cannot include the income of the separate individuals composing the Hindu undivided family and because the Pakistan Agricultural Income-tax Officer assessed the assessees in the status of individual, therefore, the Indian Income-tax Officer could not include that income in the assessment of the Hindu undivided family here in India. Strangely enough, this contention was never put forward before the Income-tax Officer who was making the assessment. It was never urged before the Income-tax Officer that this property being separate property could not be included in the assessment of the Hindu undivided family. What is worse, in the written grounds of appeal of the assessee before the Appellate Assistant Commissioner, which are set out at page 28 of the paper book in Ref. No. 149 of 1964, not a single ground was taken in the grounds of appeal that the assessees were separate in Pakistan and joint in Hindusthan and, therefore, an assessment by the Indian Income-tax Officer of the Hindu undivided family in India could not include the income of the individual members coming from Pakistan which was assessed separately by the Agricultural Income-tax Officer there. This is a crucial question of fact. If separation or tenancy-in-common or any other consideration has to be pleaded, then in that case that was a fact within the special knowledge of the assessee and it should have been raised as a fact before the Income-tax Officer and determined whether that was so or not. It is crucial also from another point of view that it was not raised in the grounds of appeal before the Appellate Assistant Commissioner when the assessee knew exactly what the order of the Indian Income-tax Officer was and what were the points on which such order was passed. This point naturally not being raised or argued before the Indian Income-tax Officer, his order of assessment does not contain any reference to such a point. The importance of this feature will be realised when we come to deal with the order of the Tribunal. The Appellate Assistant Commissioner also records the fact that this was urged only as an additional ground at the appellate stage and apparently that also in the oral submission relating to such questions of fact. The next feature of the Appellate Assistant Commissioner's order, it should be noticed, is that he definitely comes to the view that it is not known on what basis the assessments had been made in the hands of the individuals by the Pakistan authorities. In other words, the AppellateAssistant Commissioner saw from the order oi assessment of the Pakistan Agricultural Income-tax Officer that, although he was treating the assessee in the status of individual, the real nature is described by him as four brothers having equal shares in the properties which were jointly managed and it was first found by the Pakistan Income-tax Officer what was the total agricultural income derived from the entire property so jointly owned. The Appellate Assistant Commissioner had also before him the assessment order of the Pakistan Income-tax Officer dated 27th February, 1950, from where it was clear that the Pakistan Income-tax Officer was treating these very four assessees in the status of a Hindu undivided family. The position then is that the Pakistan Agricultural Income-tax Officer was assessing these assessees as individuals although knowing their jointness, the Pakistan Income-tax Officer was assessing these four assessees as Hindu undivided family and the Indian Income-tax Officer was treating these four assessees as Hindu undivided family. In that context the Appellate Assistant Commissioner was therefore justified in making the observation which we have just quoted, viz., ' it is not known on what basis the assessments have been made in the hands of the individuals by the Pakistan authorities '. We shall-leave the order of the Appellate Assistant Commissioner at this stage and come back to it on the point of Section 25A later on in this judgment.

11. The assessee thereafter appealed before the Tribunal. In paragraph 3 of the Tribunal's order the Tribunal notices that with regard to the assessment of Rs. 1,96,045 being the income from agricultural activities carried on in Pakistan, there is no dispute with regard to the quantum determined. The Tribunal records that the first submission in that respect by the assessee is that that being an agricultural income it was exempt under the provisions of Section 4(3)(viii) of the Act. Although after the partition of India the agricultural land in question, out of which this income accrued to the assessee, fell within the territory of Pakistan, yet by the amendment of the definition of ' agricultural income ' made in the year 1950 such income was held by this court in Kumar Jagdish Ckandra Sinha v. Commissioner of Income-tax, [1955] 28 I.T.R. 732 (Cal.). and Rai Sudhindra Nath Choudhury v. Commissioner of Income-tax, [1956] 29 I.T.R. 551 (Cal.)., to be not agricultural income within the meaning of Section 4(3)(viii) of the Indian Income-tax Act, 1922, and, therefore, following these decisions of the Bench, the Tribunal held that they were not exempt from the Indian Income-tax Act.

12. The Tribunal thereafter proceeded to deal with the next contention ofthe assessee, that is, the assessee was a Hindu undivided family and theincome from agricultural land did not apply to the Hindu undivided familyand therefore ought not to have been included in its income and noticed thefact that in its return that income was not included. In approaching thisproblem and this question the Tribunal misguided itself entirely andproceeded on a fundamental misconception of facts. The Tribunal comes to the finding and we shall quote the Tribunal:

' The Income-tax Officer, however, assessed the agricultural income and included it in the assessee's income without discharging the onus that lay upon him.'

13. The Tribunal forgot that this point was never raised or urged or argued before the Income-tax Officer and therefore there was no question of the Income-tax Officer failing to discharge any onus that lay upon him. This fundamental misconception and the failure of the Tribunal to realise that the point was not raised or argued before the Income-tax Officer vitiates their entire order on this point. This misconception persisted even in the statement of the case which the Tribunal prepared, where it appears again in the following terms:

' The assessee did not include that income in its return on the ground that the agricultural income did not apply to the Hindu undivided family but belonged to its members in severalty. . The Income-tax Officer did not accept the assessee's contention. '

14. These are entirely wrong statements. The assessee never said, never alleged and never argued that the exclusion from the return was on the ground that such agricultural income did not belong to any Hindu undivided family but belonged to its members in severalty. Secondly, it was entirely wrong to say that the Income-tax Officer did not accept the assessee's contention because the assessee never contended and never alleged that this was their separate property.

15. It is, therefore, impossible on the facts and circumstances of the case to agree with the Tribunal in placing the burden of proof upon the department and the revenue as the Tribunal has done. The Tribunal comes to the finding that from the orders passed by the departmental authorities it was unable to find any material to hold that the agricultural income belonged to the Hindu undivided family, without noticing the facts that this assessee was being treated as a Hindu undivided family by even the Pakistan Income-tax Officer and that even the Pakistan Agricultural Income-tax Officer was treating them only as individuals in a very special context which emphasised the joint management and assessment of the entire agricultural income from the entire property of the assessees. Incidentally, it may be noticed that with regard to another point relating to forest income when these assessees were being assessed as a Hindu undivided family by the Pakistan Income-tax Officer that the Hindu undivided family had an income of Rs. 75,500 during the year of account from the sale of forest trees and that this income had not been shown in the return and it was contended before the Pakistan Income-tax Officer by these assessees that the forest income of the assessee as the Hindu undividedfamily was agricultural income and they did not contend at that time that they did not belong at all to the Hindu undivided family but to the assessees separately as individuals. In fact, the Tribunal entirely misguided itself and completely failed to take notice of all the relevant facts on the record on this point and its conclusion, therefore, that these properties belonged to the assessees separately was not supported by any fact or evidence, entirely baseless and was an inference wholly unjustified by the facts on record.

16. We shall now come to the question of Section 25A of the Income-tax Act which was applied by the Appellate Assistant Commissioner whose order has already been quoted above. The Tribunal dismissed this point of the Appellate Assistant Commissioner by making these observations:

' Under that section it is necessary that a claim for partition should be made and after enquiries the Income-tax Officer should be satisfied that the joint family properties have been partitioned and then only the properties belonging to the Hindu undivided family can be taken as partitioned among its members. The Appellate Assistant Commissioner failed to appreciate the jiature of the case put forth by the assessee before him. It was not a case in which the property out of which the income arose was admitted by the assessee to belong to the Hindu undivided family and then a division of the income was sought. The pure and simple case was that the income from agriculture accruing in Pakistan did not belong to the Hindu undivided family but belonged to the individuals in severalty. In our opinion, therefore, there is no question of the application of Section 25A to such matters. The department in such cases had to rebut the fact of separation among the members of the Hindu undivided family in respect of the agricultural income.'

17. This again, in our view, was an entirely wrong approach by the Tribunal. It was wrong on facts ; it was wrong in the inference that the Tribunal appeared to draw. The Tribunal observes:

' The Appellate Assistant Commissioner failed to appreciate the nature of the case put forth by the assessee before him. '

18. But what is the case and what was the nature of the case put forth As already indicated, this case or its nature was never even uttered before the Income-tax Officer when the assessment was being made. This case and its nature were never put forth in the written grounds of appeal. Apparently, ' the case ', at best, here is only the contention put forward by the assessee in argument before the Appellate Assistant Commissioner and nothing more. To raise in oral argument disputed or debatable questions of fact appears to be entirely unjustified. The Tribunal was, therefore, wrong in saying that there was a case put forward by the assessee unless it be understood in the sense that it was a case in argument or in submission. The Tribunalwas trying to interpret 'the case' of the assessee by saying that the assessee's case was that the income from agriculture accruing in Pakistan did not belong to the Hindu undivided family but belonged to the individuals in severally. Where is that case before the Income-tax Officer Where is that case in the grounds of appeal before the Appellate Assistant Commissioner If that was the case of the assessee what are the proofs The proofs have all been given. The two orders of the Pakistan taxing authorities, discussed above, show clearly that even in Pakistan it could not be said that the assessees were for all purposes separated. In the context of such evidence from Pakistan that the assessees were Hindu undivided family for the purpose of income-tax in Pakistan and in that very same country of Pakistan they were with the status of individuals for the purpose of agricultural income-tax where the entire property was being jointly managed, the Tribunal said :

' The department in such cases had to rebut the fact of separation among the members of the Hindu undivided family in respect of agricultural income. '

19. But where is the fact of separation No fact of separation was proved or established. The two Pakistani orders had not established the fact of separation. On the contrary, they established the fact that this is a joint Hindu undivided family for all practical purposes in fact and in law. In that context, we do not think that either the Income-tax Officer or the Appellate Assistant Commissioner was at all wrong in coming to the conclusion that they did. Not only that. Even the remittances from Pakistan were being absorbed and appropriated to the credit of joint accounts of the Hindu undivided family here in India, as already indicated, and there was the fact of blending indicated by that act.

20. Mr. Sen for the revenue referred us to the decision in Ram Pershad Mattan Lal v. Commissioner of Income-tax, [1952] 21 I.T.R. 555 (Punj.)., laying down tne proposition, inter alia, that in the case of a joint family, the presumption is that until the contraf y is proved the family continues to be joint and that, as the assessee in that case had not substantiated the claim, the legal presumption that the Hindu family continued joint had not been rebutted. It is unnecessary to pursue this point because it is a well-settled proposition in Hindu law.

21. Reference is also made by Mr. Sen for the revenue to the Privy Council decision in Suraj Narain v. Ratan Lal, [1917] L.R. 44 I.A. 201; 401.C. 988, 992, 993 (P.C.)., where the observation by Lord Buckmaster was made, at page 205, as follows:

' In the Hindu joint family the law is that, while it is possible that amember of the joint family could make separate acquisition and keepmonies and property so acquired as his separate property, yet the questionwhether he has done so is to be judged from all the circumstances of the case.'

22. Therefore, all the circumstances of the case must be taken into consideration. We regret to say that the Tribunal failed to consider any of the facts and circumstances of this case bearing on this point. The Privy Council in that case also, dealing with the private earnings claimed to be separate property, observed as follows (page 206):

' The position with regard to the private earnings of Ram Narain is this: It has not been established that any circumstances existed from which it could be inferred that there was any joint family estate in the separate earnings of the four brothers, and it must be accepted that the earnings of Ram Narain were monies which he was at perfect liberty to use in any manner that he thought fit. At the same time, it would be quite consistent with the principle which regulates joint family estates that he should, in fact, have brought them into the joint property and made them part of the whole.'

23. It will be necessary now to deal with the interpretation and ambit of Section 25A of the Indian Income-tax Act in the light of the facts in the instant reference before us. Section 25A of the Income-tax Act provides for assessment after partition of a Hindu undivided family and reads, inter alia, as follows:

' (1) Where, at the time of making an assessment under Section 23, it is claimed by or on behalf of any member of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income-tax Officer shall make such enquiry thereinto as he may think fit, and, if he is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions, he shall record an order to that effect;

Provided that no such order shall be recorded until notices of the enquiry have been served on all the members of the family.

(2) Where such an order has been passed .... the Income-tax Officer shall make an assessment of the total income received by or on behalf of the joint family as such, as if no partition had taken place, and each member or group oi members shall, in addition to any income-tax for which he or it may be separately liable and notwithstanding anything contained in Sub-section (1) of Section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it; and the Income-tax Officer shall make assessments accordingly on the various members and groups of members in accordance with the provisions of Section 23 :

Provided that all the members and groups of members whose joint family property has been partitioned shall be liable jointly and severallyfor the tax assessed on the total income received by or on behalf of the joint family as such.

(3) Where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act to continue to be a Hindu undivided family. '

24. Here we shall make a reference to the decision of the Supreme Court in Kalwa Devadattam v. Union of India, : [1963]49ITR165(SC) , because it contains observations on the above Section 25A of the Income-tax Act, 1922. At page 172 of the report, the Supreme Court observes :

'If no order is recorded under Sub-section (1) of Section 25A, by virtue of Sub-section (3), the family shall be deemed, for the purposes of the Act, to continue to remain a Hindu undivided family. Section 25A merely sets up a machinery for avoiding difficulties encountered in levying and collecting tax, where since the income was received, the property of the joint family has been partitioned in definite portions, while at the same time affirming the liability of such members or group of members, jointly or severally, to satisfy the total tax in respect of the income of the family as such. The section seeks to remove the bar imposed by Section 14(1) against recovery of tax from an individual member of a joint Hindu family in respect of any sum which he receives as a member of the family, and to ensure recovery of tax due, notwithstanding partition. The incidence of tax, but not the quantum, is re-adjusted to altered conditions. '

25. The Supreme Court thereafter referred to the Privy Council decision in Sunder Singh Majithia v. Commissioner of Income-tax, [1942] 10 I.T.R. 457 (P.C.).. In the Supreme Court decision also no order under Section 25A(1) was recorded. It is also further observed by the Supreme Court at page 173 of that report:

' But no enquiry was in fact made and no order was recorded by the Income-tax Officer about the partition; by virtue of Sub-section (3) the Hindu family originally assessed as undivided had to be deemed, for the purposes of the Act, to continue to be a Hindu undivided family.'

26. Dr. Pal for the assessee tried to distinguish the Supreme Court decision by making the argument that here in this case it has not been established that there was ' a Hindu undivided family hitherto assessed as undivided and that a partition has taken place among the members of such family '. On behalf of the assessee he makes the submission that the fact is that his clients were not a Hindu undivided family hitherto assessed as undivided and the further fact is that it is not his clients' case that a partition has taken place among the members of such family. Unfortunately for Dr. Pal for the assessee these facts are not on record. The assessee in this case was being assessed under Section 23 as a Hindu undivided family. At this stage of that assessment under Section 23 before the Income-tax Officer theassessee never claimed and never urged and never asserted before the Income-tax Officer, that they are not members of a Hindu family in respect of the income that came from Pakistan. In arguments and submissions before the Appellate Assistant Commissioner they raised the question that the four members of the assessee-Hindu undivided family were assessed in their individual capacity at Mymensingh by the agricultural income-tax authority of Pakistan. In other words, he tried to suggest that this was not a case where the assessee was saying that a partition or separation has been effected of a Hindu undivided family which was hitherto assessed as such, but it was always separate. This argument is based on the assumption of the fact that the Pakistan authorities treated these assessees as separate and as individuals. The records show that that is not a fact and that is not a conclusion which can be drawn as an inference from the facts on record and as we have indicated above even in Pakistan these assessees are treated as Hindu undivided family by the Pakistan Income-tax Officer. We are, therefore, unable to accept the submissions of Dr. Pal for the assessee that by some mysterious process these four brothers composing the Hindu undivided family here in India were separate individuals in Pakistan.

27. If that was so, then this contention could not have been raised by way of an after-thought in the manner that it was done in the records of these proceedings and to which we have already made a reference. If they were separated, then that would have been the first point for the assessee to raise before the Indian Income-tax Officer that separate incomes of separate individuals were being included in assessing the Hindu undivided family in India. But that was not done. In the particular facts and circumstances of the case, we are satisfied that the facts do not justify the submission made by Dr. Pal for the assessee that these assessees were separate individuals independently of any separation or partition. The basic fact not being established, his argument cannot be sustained. Nor has Dr. Pal satisfied us on the records how these assessees could be separate individuals. The Income-tax Officer gave ample opportunities to the assessees to prove the sources of this income. But, in spite of repeated opportunities, no evidence was produced. The Income-tax Officer proceeded on the available evidence. That evidence has been judged as a whole by him taking a total view of the two assessment orders of Pakistan taxing authorities, both of Agricultural Income-tax Officer as well as the Income-tax Officer and also the observations made therein. Even on the basis of Dr. Pal's argument, the origin of these four brothers being treated as separate individuals remained unexplained when they were a Hindu undivided family even in Pakistan lor Pakistan income-tax purposes.

28. It will not be inappropriate to make a reference to Section 4 of the Income-tax Act where it is expressly provided that 'subject to theprovisions of the Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which are received or are deemed to be received in the taxable territories in such year by or on behalf of such persons '. That being so and the facts being as they are, on the records, which we have discussed, it is not open to the assessee to argue that these very assessees do not constitute ' a Hindu family hitherto assessed as undivided and that a partition has taken place among the members of such family ' within the meaning of Section 25A of the Income-tax Act.

29. On the facts, therefore, we are unable to accept the Tribunal's inference and conclusion about the nature of the assessee's contention, wrongly described as ' his case ' in the Tribunal's order. The effect of the failure of the assessee in the instant reference to raise this point that they were separate members before the Income-tax Officer makes the impact of Section 25A of the Income-tax Act inevitable, in our opinion, in the particular facts and circumstances of this case. As pointed out by the authority we have discussed as well as in the 13th edition of Mulla's Hindu Law at page 382 :

' The general principle is that every Hindu family is presumed to be joint unless the contrary is proved. '

30. Here is a Hindu family, which is a Hindu undivided family admittedly even in Pakistan contending that it is not so and yet there is no proof to show or support how and in what circumstances the members of this Hindu undivided family became separate individuals. Normally, in Hindu law partial partition is discouraged. But here the assessee's case is that not only a partial partition but the more illogical assertion that it is not a partial partition either with regard to properties or members but the same members composing Hindu undivided family for one purpose and not composing Hindu undivided family for another purpose. In that context it seems illogical for us to hold that the same members are a Hindu undivided family in one breath and separate members in another. The facts render such a conclusion impossible.

31. For me reasons stated above, we proceed to answer the questions asked:

We answer the question asked in Income-tax Reference No. 73 of 1964 in the negative in favour of the revenue. We hold that the Tribunal was not justified in placing the burden of proof in the facts and circumstances of this case upon the department and was not justified in excluding income from Pakistan agricultural properties from the assessee's income.

32. For similar reasons we answer the three questions (a), (b) and (c) in Income-tax Reference No. 149 of 1964 as follows:

' We answer the first question (a) in the negative in favour of the revenue. We hold that the Tribunal was wrong in saying that Section 25A of the Income-tax Act bad no application in the present case, on its factsand circumstances. We answer the second question (b) also in the negative in favour of the revenue. We hold that, on the facts and circumstances the Tribunal was wrong in placing the onus upon the department to prove that the agricultural income in Pakistan belonged to the Hindu undivided family and still retained that character. We also answer the third question (c) in the negative in favour of the revenue and we hold that on the facts and circumstances of the case, the Tribunal was wrong in holding that the agricultural income in Pakistan did not belong to the assessee-Hindu undivided family and in directing exclusion of such income from the assessable income of the family, as we have already indicated that this error of the Tribunal crept in from its fundamental misconception of the fact that the point had been urged by the assessees before the Indian Income-tax Officer at the time of assessment. It may also be stated that the Tribunal had no new facts before it and the facts were those which were before the Income-tax Officer. What in fact the Tribunal was doing was drawing an entirely wrong inference from the facts.

33. No order as to costs.

T.K. Basu, J.

34. I agree.


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