Case: Lakshminarain Bhadani Vs. Commissioner of Income-Tax, Bihar &amp; Orissa

2. Briefly stated the facts are that a joint Hindu family, of which the present appellant was the karta, was assessed tox for the. In 1944 thex Officer considered that certain income of the family taxable in0 had escaped assessment. In the meanwhile, the joint family had become divided and necessary steps had been taken by the members to have an order passed under S.x Act. Thex Officer issued a notice in the name of joint Hindu family and served it on the appellant under S. 34 read with S. 22,x Act, to make a return in respect of the escaped income and the appellant sent a return in response to that notice. Thereafter, thex officer made an assessment on the escaped income of Rs. 37,098 and issued a notice of demand on the appellant as the karta and on the two other members of the joint familyThe notice was to require payment of the full amount of tax due on the escaped income and did not apportion the liability for it amongst the three members of the family. The assessee contended that the proceeding were irregular and that he was not liable to pay anything. His contention was rejected by thex officer, the Appellate Assistant Commissioner, and thex Appellate Tribunal. He prayed that a question of law may be referred to the High Court for its Opinion, Accordingly thex Appellate Tribunal referred the following question for the High Courts opinion:Whether in the circumstances of this case proceedings under S. 34 in respect of the assessment year0 were validly initiated and completed against the Hindu undivided family, which had ceased to exist then, and an order under S.) accepting the partition of the Hindu undivided family had already been passed."The High Court expressed the view that there were irregularities both in initiating the proceedings and in completing the same but as there was no prejudice to the appellant, they answered the question in the affirmative and ordered the assessee to pay the costs of the reference. The assessee has come in appeal before us.

Reasoning: 3. Mr. Umrigar, on behalf of the appellant, argued only one point for our consideration. He contended that as the High Court had held that the proceedings were irregularly initiated and completed they were invalid and no order for assessment could be made. For this contention he relies on the wording of S.. In our opinion, this contention is unsound and the opinion of the High Court that the proceedings were initiated irregularly is also unsound. It does not appear necessary, when proceedings are initiated under S. 34 read with S. 22,x Act, to issue notice to every member of the family. The position is as if thex Officer was proceeding to assess the income of the Hindu undivided family as in. In our opinion, therefore, that contention must be rejected4. The next contention urged by Mr. Umrigar was that S. 25A(2) requires that the assessment should be made against each member of the joint family for a proportionate share of the tax and it is only after one of them had failed to pay such share that thex Officer could proceed to recover it from the others.The argument so formulated cannot be accepted6. In the present, case, thex Officer has omitted to make any apportionment. That fact is noticed in the judgment of the High Court and also by thex Appellate Tribunal In The judgment of the High Court it has been stated that this could be put right. In our opinion, it is necessary that thex Officer should issue the notice of demand against each of the members of the family in accordance with the concluding words of S.25A(2)and that should be done7. We are unable to accept the second part of the argument of Mr. Umrigar that it is only on the failure or default of payment by one of the members that the Government has the right to recover that portion of the amount from others. The proviso to S.25A(2)makes the Position very clear. In contrast with that the Proviso to S. 26 shows that when the Legislature wanted to give power to thex authority to recover from others only on failure of payment by a party, it said so expressly. The absence of similar words in the proviso to S.25A(2)must result in the rejection of this part of Mr. Umrigars argument.