Case: Appellate Assistant Commissioner of Income Tax, A-Range, Bangalore Vs. Late B. Appaiah Naidu (By His Legal Representative)

HEGDE J. 1. These are appeals by special leave arising from the decision of the High Court of Mysore in I.T.R.C. 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 section 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 the 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 24B 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 assessee 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 the assessment years 1950-51 and 1951-52 ? " 2. In this case we are concerned with the assessment years 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 assessmentsThe High Court decided the first question against the department. In so doing, it followed the decision of the Bombay High Court in Commissioner of Income-tax v. Mr. Ellis C. Reid. 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 assessees Hindu undivided family 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 Reids case , the Central Legislature had amended the Income-tax Act of 1922 and included in the Act section 24B 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 Hindu undivided family. The department cannot now be permitted to change its case and contend that in reality the assessee is the Hindu undivided family 5.

Decision reasoning: 0[ds]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 Hindu undivided family. The department cannot now be permitted to change its case and contend that in reality the assessee is the Hindu undivided family