26. The decision of Madhava Reddy, J. in S. A. 520 of 1968, D/- 20-7-1970 is the first decision in chronological sequence which was cited before us. The second appeal arose out of a suit for declaration of title and recovery of possession. The suit was sought to be resisted by the 1st defendant on the basis of part performance of a contract of sale in his favour contending that his possession could not be disturbed having regard to Ss. 47 and 50-B of the Hyderabad Tenancy Act. The 1st defendant pleaded that the plaintiff had been the highest bidder at a revenue sale but entered into an agreement with him for sale of the land and requested the Tashildar to finalise the sale in his name. The Tahsildar accordingly recommended to the Collector but the District Collector refused to accept the recommendation. Earlier in accordance with the contract the plaintiff put the lst defendant in possession of the plaint schedule land in part performance of the agreement. The entire consideration was paid by 25th May, 1963. While considering the tenability of the 1st defendant's defence the learned Judge referred to the decision in Syed Jalal's case (supra), wherein it was held that the contract of sale was neither prohibited by S. 47 nor invalid in law and what was prohibited was a permanent alienation or other transfer of agricultural land. Therefore, a suit for specific performance of a contract of sale without prior permission under S. 47 could be maintained. Then dealing with the consequence of deleting S. 47 and the effect of S. 50-B the learned Judge observed that the deletion of S. 47 can operate only prospectively and if on the date of transfer or permanent alienation when S. 47 was in force, it cannot be contended that on that date the alienation was valid and the transfer of possession would also be


Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977

be contended that on that date the alienation was valid and the transfer of possession would also be valid. He also observed that S. 50-B could have reference only to transfers which were made at a time when Ss. 47 to 50-B were in force. The learned Judge expressed the view that S. 50-B by necessary implication, retrospectively validates the transfers of agricultural lands made when S. 47 was in force and were invalid for want of prior sanction of the Tashildar. But even otherwise, if the third Amendment Act is held to be prospective at least from 18th March, 1969 onwards, the possession under such agreements of sale cannot be deemed to be unauthorised and therefore the persons in possession would be entitled to invoke the provisions of S. 53-A to protect their possession. The possession which had been delivered to the 1st defendant might have been unauthorised at the time it was given but it cannot be deemed to be unauthorised in view of the fact that Ss. 47 and 50-A were deleted and a provision was made for obtaining a certificate declaring the transfer as valid. After the expression of this opinion there is the following significant observation by the learned Judge:


"There is yet time for obtaining such a declaration."
 In that view of the matter, the 1st defendant was held to be entitled to successfully resist the suit for recovery of possession by invoking S. 53 of the T. P. Act. While dismissing the second appeal, the learned Judge granted leave. It is to be remembered that this decision was rendered on 20th July, 1970 by which date there was still time for the concerned party to apply for the validation under S. 50-B. In fact that was the observation made by the learned Judge which we have extracted.


27. It is against this decision Letters Patent Appeal No.139 of 1970: (ILR (1974) Andh Pra 119), was preferred and Gopal Rao Ekbote, J. (as he then was) and Sriramulu, J. disposed of the appeal on 18th Feb. 1972. Earlier, we have had an occasion to refer to this judgement to point out that the Division Bench in this case expressed its agreement with the principles laid down in Syed Jalal's case . Then the learned Judges proceeded to consider the views expressed by Madhava Reddy, J. in his judgement. The Division Bench expressed its dissent from the view take by Madhava Reddy, J. that S. 50-B was retrospective in its operation and validated the transfers of agricultural lands made even when S. 47 was in force. It was pointed our that S. 50-B was clearly retrospective in its operation and S. 50-B would not make all such contracts valid automatically. The learned Judges proceeded to observe that mere deletion of S.47 or introduction of S.50-B would not by itself validate all the transfers which were invalid and that such invalid transfers would not be legally enforceable unless a seal of approbation is put by the Tashildar by granting a certificate validating the same. But it could be made without any prior permission as was required when S. 47 was there. But the question had still to be answered whether possession delivered in pursuance of agreement to sell prior to 18-3-1969 could be defended by invoking S. 53-A of the T. P. Act.


28. Then reference was made to Syed Jalal's case and the view expressed therein that possession delivered in pursuance of an agreement without sanction under S. 47 was unauthorised and then the Bench pointed out that the position materially altered after S. 47 was removed. Existence of S. 98 in the view of the Division Bench, did not deprive the purchaser from invoking the principles of part performance to protect his possession after S.47 was deleted. At the same time, the learned Judges pointed out that S. 53-A of the Transfer of Property Act predicates a valid contract , a contract of a type which could be specifically enforced and the section would not apply where the contract was invalid on any ground other than that it was not completed in the manner prescribed by the law. After pointing out this, the learned Judges of the Division Bench observed that the principle laid down in Syed Jalal's case that the agreement of sale was capable of being enforced in a suit for specific performance was complied with in that case and there was no reason why the plea of part performance should not be available to the defence. When once S. 47 was deleted, the possession given earlier would be considered as validly given. In such a case, the doctrine of part performance would validly be invoked. Having made all these observations, the Division Bench agreed with the final conclusion of Madhava Reddy, J. in the second appeal and dismissed the Letters Patent Appeal.


29. Two features are worthy of note in this decision of the Division Bench. One is that it expressed concurrence with the decision of the earlier Division Bench in Syed Jalal's case . The second feature is that by deletion of S. 47 the possession, which was unauthorised until then, ceased to be unauthorised. This view was probably expressed in view of the fact that there was still time for validation of the contract of sale and the delivery of possession. We venture to make this inference because the decision of the Division Bench was rendered on 18th Feb. 1972 and the time of validation under S. 50-B was in force till 31st of March, 1972. Though the Division Bench did not specifically mention this, this inference is possible by the view expressed by the Division Bench that S. 50-B was not retrospective, and that until and unless the invalid transfers are validated, they (the invalid transfers) continue to be invalid. Therefore, we do not consider that this Bench Decision in Letters Patent Appeal No. 139 of 1970; (ILR (1974) Andh Pra 119), is in any way contrary to the view, we have expressed. Moreover this case was not concerned with the effect of S. 3 of the Regulation. Further the recent decision of a Division Bench in (1977) 2 APLJ (Notes) page 28 on the subject to which we have already made a reference has taken the same view which we have done.


30. Then the Supreme Court rendered decision in Nathulal V. Phoolchand (supra). Under S. 70 (4) of the Madhya Bharat Land Revenue and Tenancy Act of 1950, land could not be sold to an alienee not being an agriculturist without the sanction of the State Government. In that case transfer was made without such sanction but possession was delivered. Since the purchase had failed to pay on the due date of balance of the price, the vendor rescinded the contract and commenced an action for a decree for possession of land and the factory standing thereon with mesne profits. The transferee invoked the provisions of S. 53-A to his aid. There was no condition in the contract that the sanction required under S. 70 (4) would be obtained. The Supreme Court held that a condition to secure such a sanction after paying the appropriate fee must be implied and that it was well settled that where by a statute property was not transferable without the permission of the authority, an agreement to transfer the property must be deemed subject to implied condition that the transferor will obtain the sanction of the authority concerned. Then the learned Judges of the Supreme Court held that all the conditions necessary for making out the defence of part performance were fulfilled in the case. Once these essential requirements of S. 53-A of the T. P. Act were satisfied, there was no bar to the defence of part performance and the transferee could protect his possession under that provision. Sect 70 of the Madhya Bharat Land Revenue and Tenancy Act had a provision in sub-sect, (8) that no sale should be deemed to be valid unless the sale deed effecting such a sale had been registered in accordance with law of registration in force for the time being. Since there was no sale in that case and the purchaser was not relying upon any sale, there was no impediment in the way of safeguarding his


purchaser was not relying upon any sale, there was no impediment in the way of safeguarding his possession under S. 53-A. This decision, in our opinion, does not in any way detract from what we have expressed above. Under sub-sec. (4) of S.70 of the Madhya Bharat Act, land is not transferable without the permission of the appropriate authority to a non-agriculturist. The Supreme Court held the even if the contract did not contain the securing of such permission as one of the conditions, it implied in any contract of sale. This is what we also have held and that was the view, expressed in Syed Jalal's case . Therefore, when all the requirements of S. 53-A were satisfied certainly the transferee was entitled to protect his possession under that provision of law.


31. We must also notice in this connection certain vital differences between the Madhya Bharat Law and the relevant laws that obtained in the State of Andhra Pradesh. Sec. 47 of the Hyderabad Tenancy Act unlike S. 70 (4) of the Madhya Bharat Act clearly declared that no permanent alienation or other transfer of an agricultural land shall be valid unless it has been made with the previous sanction of the Tashildar. The corresponding provision did not exist in the Madhya Bharat Law. Though the alienee could seek specific performance of a contract calling upon the vendor to obtain the sanction of the Tashildar and then execute a sale deed, once the transaction was finalised and completed without obtaining the sanction of the Tashildar, the alienation or transfer become invalid. Further, there is no provision in the Madhya Bharat Law which correspondents to S. 50-B of the Hyderabad Tenancy Act, under which validation of transfers could be effected even later, once again emphasising that validation of the transfer was essential. As the learned Judges pointed out in the decision of the Supreme Court,, the condition to secure the permission of the Appropriate authority for the alienation was implied and it could be secured at anytime in future. Since there was possibility in that case for securing the permission and thus complying with S. 70 (4) of the Madhya Bharat Law, S. 53-A was presumably held to safeguard the possession of the transferee. But in the instant cases that possibility of securing the sanction came to an end on 31st of March, 1972. Afterwards there was no possibility of validating the sale transactions.


32. What is more, the lands which are purported to have been transferred in these three cases, are situate in Schedule Areas, the transfer of which by tribals to non-tribals was prohibited on and from 1-12-1963 in the Telegana Region. This circumstance also did not exist in the Supreme Court's case. Therefore, while following the principle laid down by the Supreme Court in Nathulal's case , we find nothing in that decision which goes contrary to the view we have expressed.


33. Then there is a decision of Madhava Reddy, J, D/- 21-9-1972 in S. A. No. 450 of 1970 (Andh Pra). In that case a question arose whether a contract of sale dated 30th June, 1956 could be deemed to be authorised at least from 18th March, 1969 i.e., the date of the Third Amendment to the Hyderabad Tenancy Act and whether the possession of the 1st defendant could be protected under the provisions of S. 53-A of the Transfer of Property Act. The learned Judge referred to Syed Jalal's case , his own decision in S. A. No.520 of 1968 and that in the Letters Patent Appeal 139 of 1970; (ILR (1974( Andh Pra 119) and concluded that the view he had taken in S. A. 520 of 1968 had found favour with the Division Bench. These cases we have already considered and expressed our opinions. Then the learned Judge referred to Nathulal's case , and also that of a Full Bench of this Court in K.Parvathamma V. Excise Commr., ., which dealt with a case of revenue sale and held that the defendants were entitled in invoke the aid of S. 53-A of the T.P. Act. The decision of Kondaiah , J. in the Commercial & Industrial Finance Ltd, v. Smt. Jeelani Begum, (1971) 2 APLJ 450 was also noted by the learned Judge and pointed out that the decision therein would not help the case of the appellants therein. To the extent that this decision is contrary to the view we have stated above, we express our respectful disagreement from our learned brother.


34. Then there are two decisions of the Mysore High Court in Eramma v. Parvatamma, AIR 1972 Mys 121 and Mohd. Tahair v. S. K. Ali, AIR 1973 Mys 307. The former was of a single Judge's and the latter was that of a Division Bench following and approving the Single Judge's view. The single Judge, in the former case followed the decision of the Supreme Court in Nathulal's case (supra). Eramma v. Parvathamma, AIR 1972 Mys 121, is a case which directly arose under S. 47 of the Hyderabad Tenancy Act. In that case also there was no sanction obtained from Tashildar as required under that section. The learned Judge following the Supreme Court's decision Nathulal's case held that the fact that there was no express condition in the agreement of sale that the vendor would undertake to obtain the sanction of the collector for the transaction makes no difference to the application of the principles of Sec. 53-A, because such an undertaking on the part of the vendor must be taken as an implied condition of the contract of sale. As held by us and also by a Division Bench of this Court in Syed Jalal's case , a contract of this nature could be specifically performed calling upon the vendor to execute a sale deed after obtaining the necessary sanction under S.47. By the time the decision was rendered in the Second Appeal by the learned Single Judge on the 9th March, 1971, there was time for the parties to obtain sanction under that section. It does not appear from the decision that, as was done in Andhra Pradesh, S. 47 was deleted and S. 50-B was enacted in the State of Karnataka. that makes a vital difference. Quite apart from that, it is patent from the decision that the transferee could support his possession under


Quite apart from that, it is patent from the decision that the transferee could support his possession under S. 53-A of T.P. Act and he could call upon the transferor to give him specific performance of the contract after obtaining the necessary sanction under S. 47.


35. The Bench decision in Mohd. Tahir v. S. K. Ali (AIR 1973 Mys 307) (supra) merely followed the single Judge's decision and the same reasoning, which was pointed our in respect of the single Judge's decision, would apply to this decision as well.
 36. The Full Bench decision in K. Parvathamma v. Excise Commr. (supra) dealt with a case of revenue sale. The Full Bench held that even for revenue sales sanction under S. 47 before the amendment of 1959 was required before confirmation of such sales. We see nothing in this decision which is different from what we have held. It is noteworthy that in the above decision, the further question of the validity of the transfer and possession as per the Regulation did not arise.


37. In W. P. Nos. 1509 and 1510 of 1973 (AP) the validity of alienation of lands in Scheduled Areas was challenged. Chinnappa Reddy, J. by his order dated 10th June 1975 held that the two writ petitions should fail for the reason that the petitioners did not choose to avail themselves of their right of appeal provided by para 3 (iii) of the Regulation. The learned Judge also upheld the view of the Assistant Agent that since the permission of the Tashildar under S. 47 of the Hyderabad Tenancy Act had not been obtained, their possession could not be held to be lawful. Though the decision of Parthasarthi, J. in Hafeezunnisa Begum v. Syed Arab, (1969- 2 Andh WR 317) (supra), was cited before him , Chinnappa Reddy, J. pointed out that S. 3 of the Regulation prevails over any provision contained in any enactment, rule or law in force. Therefore, he held that neither S. 50-B of the Hyderabad Tenancy Act nor S. 53-A of the T.P. Act can be a valid answer to a proceeding for eviction under the Scheduled Areas Land Transfer Regulation.


38. In W. P. No. 131 of 1975 (Andh Pra) and batch the validity of alienations by not-tribals under agreements of sale before 1-12-1963 for which sale deeds were taken after 1-12-1963 came up for consideration. Our learned brother Ganagadhara Rao., J. by his decision dated 26th Feb., 1976 dismissed the writ petitions holding that S. 3 of the Regulation declared all alienations invalid. The sale deed was executed after the Regulation. Since the sale deed which was executed after 1-12-1963 was bad, the agreement of sale taken before that date would not stand. Even assuming that the agreement of sale was valid on the date it was taken, it would have no effect and S.53-A of the Transfer of Property Act would not apply in view of the non obstante clause contained in S. 3 of the Regulation and its overriding effect, The Learned Judge also referred to the decision of Chinnappa Reddy, J. in the aforesaid case and agreed with that view.


39. Munju V. P. Raju, (1976) 2 APLJ 103, is a case decided by Kuppuswamy, J. In that case a tribal entered into an agreement with the petitioner on 15-2-1963, where under he agreed to sell a piece of land for a sum of Rs. 1,000/-. The amount was paid on that day itself and possession was taken. Thereafter a regular sale deed was executed on 2-3-1969. The Special Deputy Collector held that the document of 15-2-1963 was not registered and so it was not admissible in evidence. Since the regular sale deed which was registered was subsequent to the Regulation, it was invalid and the petitioner was liable to be ejected. On the facts of the case, the learned Judge held that there was no express finding to the effect that there was an agreement on sale on 15-2-1963. In the opinion of the learned Judge this lack of finding amounted to saying in effect that the Special Deputy Collector was not prepared to hold that the agreement of sale was true. It was also pointed out that the petitioner was not in possession of the land. Therefore, the learned Judge concluded that there was no agreement before the Regulation was applied to the Telengana Area and also there was no possession delivered. Consequently, the learned Judge held that on the facts of the case the writ petition should fail.


40. At the same time, the learned Judge was not inclined to agree with the views expressed by Chinnappa Reddy, J. and Gangadhara Rao, J. in the cases referred to above. Relying on the Supreme Court's decision in Nathulal's case (supra), the two Mysore decisions and the decisions of Madhava Reddy, J. in S.A.No. 450 of 1970, D/- 21-9-1972 and S. A. No. 520 of 1968, D/-20-7-1970; (ILR (1972) Andh Pra 1313) , the conclusion in which was upheld by the Division Bench in L. P. A. No. 139 of 1970: (ILR (1974) Andh Pra 119), Kuppuswamy, J. held that after the deletion of S. 47 and introduction of S. 50-B the possession was unlawful and the doctrine of part performance could be relied on. The learned Judge opined that if there was a transfer even prior to the coming into force of the Regulation, the Regulation will not have any effect on such transfer and S. 3 being one of the provisions of the Regulation will equally have no application. The definition in S. 2 (g) in the Regulation of the expression "transfer" which includes a contract was then noticed and then the learned Judge observed that a contract of sale would amount to a sale. We have already considered at length all the decisions referred by our learned brother Kuppuswamy, J. in Munja's case (1976-2 APLJ 103) (supra), and for those reasons, we cannot agree with the legal propositions which the learned Judge laid down in his decision.


41. Before we conclude, we must take note two decisions cite by the learned Counsel for the petitioners viz., Nanasaheb v. Appa and Mohinuddin v. Gulam Ghouse, ILR (1962) Bom 641. These decisions were cited in support of the contention that even if the transfer had not been completed in the manner prescribed, still the transferee would be entitled to the protection of S. 53-A of the T. P. Act , But there is nothing in these two decisions which is contrary to what we have held. In the present cases the delivery of possession itself was illegal and unlawful since it was contrary to law. Therefore the ratio of the two Bombay cases does not apply to the cases before us.


42. The foregoing discussion shows that there was no indefeasible title or right created in the petitioners before 1-12-1963 on which date the Regulation came to be applied to the Telengana Region. After 1-12-1963 the overriding provision of S. 3 of the Regulation have come into force. Sec. 3 of the Regulation had on and from 1-12-1963, overriding effect despite any other enactment, rule or law in force in agency tracks in respect of transfer of immovable property situate in scheduled areas by a tribal in favour of non-tribal. As we have held, these provisions had no retrospective effect. But then there was no indefeasible right in the petitioners by 1-12-1963. What all they had by that date was a contract of sale and unauthorised and illegal possession of the land. By virtue of S. 3 of the Regulation, they and the subsequent sale deeds, which the petitioners obtained , were null and void. The result is that the decisions of the Special Deputy Collector, as upheld by the appellate authority, which is sought to be quashed, is in accordance with law.
 43. Consequently, the writ petitions are untenable and are accordingly dismissed.


43. Consequently, the writ petitions are untenable and are accordingly dismissed.
 44. Now W. A. 355/77 remains. The Writ petition No. 21115/77 against which this appeal arises was dismissed in limine by our learned brother Raghuvir, J. The Special Deputy Collector held that the alienation in favour of the appellant was invalid in view of the provisions of the Regulation and an appeal was preferred to the appellate authority, Pending the appeal stay of eviction was sought. Since that was refused the writ petition was filed. Raguhvir, J, held that the appellant could have carried the matter in revision before the Government and since there was an alternative remedy, the writ petition could not be entertained. We, however, find that it is not necessary in this case to go into the controversy whether the revision under S. 6 is an alternative remedy which stands in the way of this Court entertaining a writ petition. As we have pointed out, the impugned order is one refusing to grant stay of eviction pending the appeal before the appellate authority. We direct the appellate authority to dispose of the appeal as expeditiously as possible and in the meanwhile, that is to say, until the appellate authority disposes of the appeal, we grant stay of the eviction of the appellant from the lands in question.
 45. With this direction the writ appeal is dismissed. Having regard to the circumstances of the case, we direct the parties to bear their own costs in the writ petitions as well as in the writ appeal, Advocate's fees Rs. 150/- in each case.
 46. Writ petitions and writ appeal dismissed.


Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987

JUDGMENT B.P. Jeevan Reddy, J.
1. Two questions are referred under Section 2 56( 1) of the Income-tax Act, 1961, one at the instance of the assessee and the other at the instance of the Revenue. The question referred at the instance of the assessee is :
 "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the initiation of reassessment proceedings was valid on the ground that the finding given in its order dated September 9, 1974, in I.T.A. No. 1229/ Hyd/1972 was a finding necessary for the disposal of that appeal ? "
2. At the instance of the Revenue, the following question is referred:
 "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessment for 1966-67 made under Section 147 read with Section 150(1) is liable to be quashed ? "
3. The assessee, as the karta of a joint family, was a partner in a firm, M/s. Gotturi Veeranna & Sons. Disputes arose between the partners which led to the institution of a civil suit. Under the decree passed in the suit, the assessee was held entitled to a sum of Rs. 1,10,949 with interest at 6% per annum from the date of the decree. This decree was made in the accounting year relevant to the assessment year 1966-67. The break-up of the said amount is :
(i) Rs. 48,949--Capital;


(i) Rs. 48,949--Capital;
(ii) Rs. 62,000--Interest at the rate of 12% from 5-8-1954 to 25-2-1965.


4. The assessee claimed that the said amount of interest should be spread over and divided between the relevant years. On that basis, he returned an amount of Rs. 5,138 for the said assessment year. The Income-tax Officer, however, did not agree. He adopted a different procedure altogether. He found that during the accounting year relevant to the said assessment year, the assessee has realised a sum of Rs. 48,929. He divided the said amount into principal and interest in the same proportion as they represented in the total decretal amount. On that basis, he allocated a sum of Rs. 27,342 towards interest and included the same in the income of the said assessment year. On appeal, the Appellate Assistant Commissioner confirmed the same. He made a slight modification, in that he directed the costs to be deleted from the total amount, on which basis the interest amount includible came to Rs. 25,700. The assessee carried the matter in further appeal to the Income-tax Appellate Tribunal. His contention before the Tribunal again was that the interest amount of Rs. 62,000 should be spread over and divided between the relevant years and that only the proportionate amount should be included in the income of the concerned assessment year. The Tribunal rejected the said argument. It held that the principle of the decision of this court in CIT v. Sankari Manickyamma applies to this case and on that basis the entire; interest amount of Rs. 62,000 must be held to have accrued to the assessee during the previous year relevant to the assessment year 1966-67 and ought to have been assessed accordingly. However, there was no appeal by the Department before the Tribunal. In the circumstances, the Tribunal merely dismissed the appeal preferred by the assessee, confirming the order of the Appellate Assistant Commissioner.


5. In view of the finding recorded by the Tribunal in its order aforesaid (dated September 9, 1974), the Income-tax Officer reopened the assessment under Section 147 of the Act, with a view to include the balance of the interest amount in the income of the said assessment year. The assessee objected to the reopening of the assessment unsuccessfully. His appeal to the Appellate Assistant Commissioner was also unsuccessful. The matter was then carried to the Appellate Tribunal. Two questions were urged before, and considered by, the Tribunal, viz., (i) that the finding recorded by the Tribunal in its order dated September 9, 1974, that the entire interest amount of Rs. 62,000 accrued to the assessee during the accounting year relevant to the assessment year 1966-67 and that it ought to have been assessed as such, was a finding which was not necessary for an effective disposal of the appeal before it, and (ii) that the reassessment proceedings initiated under Section 147 are barred by virtue of Sub-section (2) of Section 150. The Tribunal held on the first question that "the finding is irretrievably linked up with the contention raised by the assessee. It is, therefore, evident that what the Tribunal decided is a necessary finding for the purpose of the effective disposal of the appeal before it. To our mind, therefore, the case clearly comes within the purview of Section 150(1)." On the second question, it found that the reassessment proceedings in this case are barred by Sub-section (2) of Section 150. Accordingly, it allowed the appeal and set aside the reassessment proceedings. Thereupon, both the Revenue and the assessee asked for referring a question each, which has been done by the Tribunal.


6. For the sake of convenience, we shall dispose of the question referred at the instance of the assessee, first. We agree with the Tribunal that the finding recorded in the order of the Tribunal dated September 9, 1974, was necessary for a proper and effective disposal of the appeal before it. The main question urged before it by the assessee was that the interest amount of Rs. 62,000 cannot be included in the income of the year in which the decree was passed, i.e., in the year of accrual, but that it must be spread over and divided between all the years for which it has been awarded. This contention was dealt with by the Tribunal and was rejected holding that on the principle of the decision of this court in Sankari Manickyamma's case , the entire interest amount is liable to be assessed in the year in which it has accrued. We, therefore, answer the question referred at the instance of the assessee in the affirmative, i.e., in favour of the Revenue and against the assessee.
7. The more important question, however, is the one referred at the instance of the Revenue. The question is whether the reassessment proceedings were barred by virtue of Sub-section (2) of Section 150. The Tribunal has observed in its judgment--and it is also stated by counsel for both the parties before us--that there is no authority of any court on this aspect, It is necessary, therefore, to examine the said question with reference to the relevant provisions of law.


8. Section 147 provides for assessing or reassessing the income which has escaped assessment in any of the two situations mentioned in Clauses (a) and (b). The reassessment is, however, subject to the provisions contained in Sections 148 to 153. Section 148 provides that before making an assessment, reassessment or recomputation under Section 147, the Income-tax Officer shall serve on the assessee a notice containing the relevant particulars. Section 149 provides the time limit for issuance of notice, i.e., for initiation of the proceedings under Section 147. In cases falling under Clause (a) of Section 147, it is either eight years or sixteen years, as the case may be, while in a case falling under Clause (b), it is four years. According to it, in a case falling under Clause (b) of Section 147, " no notice under Section 148 shall be issued......at any time after the expiry of four years from the end of the relevant assessment year". Section 151 provides for obtaining the prior sanction of the Board or the Commissioner, as the case may be, in certain cases. Section 150 is in the nature of a proviso to Section 149. It reads thus :
"150. (1) Notwithstanding anything contained in Section 149, the notice under Section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision.


(2) The provisions of Sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken."
9. A reading of Sub-section (1) of Section 150 shows that where the reassessment proceedings are initiated "in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision", the time limits prescribed in Section 149 shall not apply and that notice under Section 148 can be issued at any time. Sub-section (2), however, is again in the nature of a proviso to Sub-section (1). It says that the provisions of Sub-section (1) shall not apply where, by virtue of any other provision limiting the time within which action for assessment, reassessment or recomputation may be taken, such assessment, reassessment or recomputation is barred on the date of the order which is the subject-matter of the appeal, reference or revision in which the finding or direction is contained.


10. Section 153 provides the time limits for completion of assessments and reassessments. Sub-section (I) says that an order of assessment under Section 143 or Section 144 shall not be made after the expiry of certain periods prescribed therein (at present, it is two years). Sub-section (2) similarly provides that no order of assessment, reassessment or recomputation shall be made beyond the periods prescribed therein. In the case of proceedings under Clause (a) of Section 147, they must be completed within-four years from the end of the assessment year in which notice under Section 148 was served. In the case of proceedings under Clause (b) of Section 147, the proceedings must be concluded either within four years from the end of the assessment year in which the income was first assessable, or within one year from the date of service of the notice under Section 148, whichever is later. Sub-section (3) is in the nature of a proviso to Sub-sections (1) and (2). It says that the provisions contained in Sub-sections (1) and (2) of Section 153 shall not apply in certain cases. Clause (ii) of Sub-section (3) provides one such situation, viz., "where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under Section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act." In other words, according to Sub-section (3), where proceedings are taken under Section 147 in consequence of or to give effect to any finding recorded by any appellate or revisional authority, or by any court in any proceeding, the time limit prescribed in Sub-section (2) shall not apply. Explanation 1 in this section provides for exclusion


prescribed in Sub-section (2) shall not apply. Explanation 1 in this section provides for exclusion of certain periods in computing the period of limitation prescribed therein. It is not necessary to notice this Explanation for our purpose. Explanations 2 and 3, however, must be referred to since they are strongly relied upon by the Revenue. Explanations 2 and 3 read as follows :


"Explanation 2.--Where, by an order referred to in Clause (ii) of Sub-section (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of Section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order.
Explanation 3.--Where, by an order referred to in Clause (ii) of Sub-section (3), any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of Section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed."


11. A reading of these Explanations clearly shows that they merely illustrate and clarify the meaning of the words "in consequence of or to give effect to any finding or direction" contained in an appellate, revisional or any other order. Explanation 2 says that where an appellate, revisional or other order excludes any income from the total income of the assessee for an assessment year, the assessment of such income for another assessment year shall, for the purposes of both Section 150 and Section 153, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the order. Similarly, Explanation 3 says that where by an appellate, revisional or other order any income is excluded from the total income of one person and held to be the income of another person, the assessment of income of such other person shall, both for the purposes of Section 150 and Section 153, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the order, provided, of course, such other person was given an opportunity of being heard before the said order was made. What is, however, clear is that Explanations 2 and 3 do not purport to obliterate or remove the restriction contained in Sub-section (2) of Section 150. They, no doubt, refer to Section 150, but for a limited purpose, mentioned above.


12. A review of the above provisions makes it clear that the Act provides certain time limits both for initiation of proceedings under Section 147 as well as for completion of such proceedings. The time limits for initiation of such proceedings are contained in Sections 149 and 150, while the time limits for completion of such proceedings are mentioned in Sub-sections (2) and (3) of Section 153. Just as Section 150 is a proviso to Section 149, Sub-section (3) of Section 153 is a proviso to Sub-section (2) thereof. Explanations 2 and 3, no doubt, are relevant both for Section 150 and Section 153(3), but their purpose is merely to illustrate certain words occurring therein, and not to remove or obliterate the time limits prescribed in the several provisions referred to above.


13. Learned standing counsel for the Revenue brought to our notice certain decisions, all of which appear to have been rendered with reference to Explanation 2 in Section 153. In B.A.R. Abdul Rahman Saheb v. ITO , a Bench of this court held that the effect of Section 150 and Sub-section (3) of Section 153 read with Explanation 2 is that, if any income is deleted from assessment by the order of a higher authority, on the ground that it is not the income of that year, steps may be taken under Section 147 to assess it as the income of another year, without any limitation prescribed under Section 149 as regards the issue of notice under Section 148 or as to the completion of the assessment or reassessment prescribed by Section 153. The Bench read Sub-section (2)of Section 150 as providing that the provisions of Sub-section (1) thereof will not apply to a case of assessment, reassessment or recomputation of income, if it related to an assessment year in respect of which assessment, reassessment, etc., could not have been made at the time when the order, which was the subject-matter of appeal, reference or revision, was made, by reason of the time limits fixed under Section 153 for making the assessment, reassessment, etc. (vide paragraph 2 at page 545). It would immediately be seen that Sub-section (2) of Section 150 does not refer to Section 153. It only refers to "any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken". The word "taken" refers only to initiation of proceedings and not to completion. Similarly, at page 547, the Bench observed: "the effect of Section 150 and this Sub-section (Section 153(3)) read with Explanation 2 is that if any income is deleted from assessment in a higher proceeding on the ground that it is not


is that if any income is deleted from assessment in a higher proceeding on the ground that it is not the income of that year, steps may be taken under Section 147 to assess it as the income of another year, without any limitation applying to the issue of notice under Section 148 or to the completion of the assessment or reassessment..." With great respect, we think that this observation overlooks the provisions contained in Sub-section (2) of Section 150. However, inasmuch as the case before us is not one falling under Explanation 2 to Section 153, we do not think it necessary to refer the matter to a larger Bench.


14. In Ambaji Traders P. Ltd. v. ITO , the Bombay High Court held that the effect of Explanation 2 in Section 153 is, where the income of an assessee has been excluded from assessment for one assessment year, its inclusion in another assessment year has been treated as having been made in consequence of or to give effect to a finding or direction, covered by Clause (ii) of Sub-section (3) of Section 153, and that for such a purpose, the bar of limitation contained in Section 153(2) will not apply. They approved the view taken by this court in B.A.R. Abdul Rahman Saheb v. ITO with respect to the legal position resulting from a reading together of Section 150, Section 153(3) and Explanation 2 thereto. On a reading of the decision, we find that the Bench has not paid due attention to the language of Section 150(2) which deals with initiation of proceedings under Section 148.
15. In ITO v. Eastern Coal Company ltd. , the Calcutta High Court considered the effect of Sub-section (2) of Section 150, among other provisions. This is what the court said (p. 487):


"The next question that was urged in this case was that even if Section 150(1) of the 1961 Act applied, the notice had become barred. It was contended that a notice would become barred even under Section 150(1) if on the date of the appellate order the time for taking action for assessment for that year had become barred by the other provisions of the Act. The correct date in this connection would be the date when the order, which is the subject-matter of the appeal, was passed. If on that date the reassessment proceedings could have been validly taken, then because of subsequent lapse of time, the said reassessment proceedings do not become barred by time. In this case, on 29th December, 1960, the original order of assessment was passed and, therefore, on that date action could have been taken for reassessment for the assessment year 1958-59. That was the date when the order which was the subject-matter of appeal was passed. In that view of the matter, in our opinion, the provisions of Section 150(1) of the Income-tax Act, 1961, would apply on the facts of this case..."


16. It may be mentioned that December 29, 1960, is the date on which the assessment for the assessment year 1956-57 was completed and certain income was included therein. In the second appeal before the Tribunal, it was held by the Tribunal (in the year 1965) that the said income could not have been included in the assessment year 1956-57, It was held that the income must be deemed to have accrued when the sale deed was executed on September 28, 1957, which fell in the accounting year relevant to the assessment year 1958-59. Pursuant to the order of the Tribunal, the Income-tax Officer issued a notice under Section 148 on December 7, 1965, proposing to reopen the assessment for the assessment year 1958-59 and to include the said income in the income of that year. This was objected to by the assessee, inter alia, on the ground that the notice was barred by virtue of Sub-section (2) of Section 150. It is relevant to mention that the expression "the order which was the subject-matter of the appeal, reference or revision, as the case may be" was understood as the original order from which the appeal, reference or revision arises, and not the order which was the immediate subject-matter of the appeal or reference, as the case may be. In other words, the said expression was not understood as referring to the order of the Appellate Assistant Commissioner against which the appeal before the Tribunal was preferred, but to the original order of assessment. This decision, in fact, supports our proposition rather than militate against it. We must also point out that Explanation 2 to Section 153 was also referred to and relied upon for the purpose of rejecting the argument of the assessee relating to the bar of limitation.


17. The next decision relied upon by learned standing counsel for the Revenue is of the Gujarat High Court in Addl. CIT v. New Jehangir Vakil Mills Co. Ltd. . On a perusal of the decision, we find that the main question that arose for consideration in the said decision, is: in which year is the compensation (for the land acquired) to be included? It was answered that it should be included in the year in which possession is taken, i.e., when the transfer takes place. In that connection, Sub-section (7A) of Section 155 and Section 48 were referred to. Only towards the end of the judgment, a reference was made to Sub-sections (2) and (3) of Section 153, and it was observed that where the assessment, reassessment, etc., is made in consequence of or to give effect to any finding or direction contained in an order...or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, the limitation provided in Sub-section (2) of Section 153 does not apply. We must, therefore, say that this decision is not relevant to the question in issue before us.
18. The next decision cited by learned standing counsel is of the Karnataka High Court in Mysore Tobacco Company Ltd. v. CIT . That was again a case arising under Explanation 2 to Section 153. A perusal of the judgment shows that there is no reference to Sub-section (2) of Section 150, nor was its effect considered. It does not even appear that it was relied upon for the assessee. The learned judges referred to Explanation 2 in Section 153 and held that the bar of limitation does not apply. It cannot, therefore, be said that this decision is a relevant authority on the question before us.


19. On the other hand, a passage from Sampath Iyengar's Commentary on the Law of Income Tax, Vol. IV, at p. 3584, which has been relied upon by the Tribunal in its judgment, lends support to our view. (Of course, the Tribunal took the extract from the Sixth Edition, i.e., from Vol. II). The learned author has expressed the view that Sub-section (2) of Section 150 is intended to preserve the finality of the orders made in earlier assessment years and that the bar contained therein has to be given effect to.


20. Now, coming to the facts of the case before us, the finding in consequence of which notice under Section 148 has been given, was recorded by the Appellate Tribunal at the stage of the second appeal. In this case, it is relevant to notice that the assessee did not file a return within the prescribed period. It was filed only on February 5, 1971. Inasmuch as this return was invalid in the eye of law, a notice under Section 148 was issued by the Income-tax Officer on March 1, 1971, and the assessment was completed on March 29, 1972. Against the said order of assessment, the assessee filed an appeal, which was disposed of by the Appellate Assistant Commissioner on October 6, 1972. The judgment of the Tribunal in the second appeal is dated September 9, 1974. Now, according to Sub-section (2) of Section 150, the initiation of reassessment proceedings would be bad, even when they are initiated in consequence of or to give effect to any finding or direction contained in the appellate order, if such initiation of reassessment proceedings is barred by any other provision of the Act on the date of the order which was the subject-matter of appeal. In this case, the second appeal in which the finding was recorded arose from the order of the Appellate Assistant Commissioner dated October 6, 1972. The question is, whether on that date the initiation of reassessment proceedings is barred by any provision of law ? According to Section 149(1)(b), reassessment proceedings cannot be initiated after the expiry of four years from the end of the relevant assessment year. The relevant assessment year in this case is 1966-67. Four years therefrom would expire on March 31, 1971. Thus, the impugned initiation of proceedings under Section 147 by a notice issued on a date subsequent to


the impugned initiation of proceedings under Section 147 by a notice issued on a date subsequent to September 9, 1974, would be clearly barred. Even if we construe the expression "the order which was the subject-matter of the appeal, reference or revision, as the case may be" occurring in Sub-section (2) of Section 150 as referring to the original order of assessment, as has been understood by the Calcutta High Court in ITO v. Eastern Coal Company Ltd. , even then the result would not be different, because the order of assessment in this case was made on March 29, 1972, which too is beyond March 31, 1971.


21. For the above reasons, we answer the question referred at the instance of the Revenue in the affirmative, though for reasons different from those assigned by the Tribunal. Our answer shall be in favour of the assessee and against the Revenue on this question.
22. Reference is answered accordingly.    No costs.


Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987

JUDGMENT Anjaneyulu, J.
 1. Dronamraju Satyanarayana of Visakhapatnam is the petitioner herein. In the affidavit filed supporting the writ petition the petitioner states that his occupation is agriculture and he is also the Organizing Secretary, Coastal District of Andhra Pradesh Congress Committee (1). He describes himself as an active public worker and states that he is deeply interested, both personally and politically, in the subject matter of the writ petition. The prayer in the writ petition is somewhat involved. It is good to extract the same below :
"For the reasons and in the circumstances mentioned in the writ petition and in the affidavit filed in support thereof it is just and necessary that this Honourable Court may be pleased to issue a writ of mandamus directing the Central Government to invoke and exercise its constitutional power and discharge its constitutional duties by exercising its constitutional function under Articles 355,356, and 357 of the Constitution of India,. and decide whether conditions enumerated in the said provisions of the Constitution are existing in State of Andhra Pradesh and if so satisfied to initiate constitutional action by taking into consideration, the breakdown of the constitutional machinery in Andhra Pradesh and to invoke and exercise its power by imposing Presidential Rule forthwith under the above constitutional provisions, in Andhra Pradesh or pass such other appropriate order and orders as this Honourable Court may deem fit in the circumstances of the case."


Sri Ramachandra Rao. learned Counsel appearing for the petitioner, explaining the scope of the prayer in the writ petition hastened to state that he is not seeking any mandamus to the constitutional authorities for imposing Presidential rule in the State of Andhra Pradesh. He fairly admitted such a direction could not possibly be given by this Court. According to him the constitutional machinery in the State of Andhra Pradesh broke down and a situation has arisen in which the governance of the State cannot be carried out in accordance with the provisions of the Constitution. According to him, the Central Government is fully aware of the situation and even so, no action is being taken in terms of Art. 356 of the Constitution of India to impose Presidential rule as the Centre does not want to displease the non-Congress (1) Government and for various other extraneous considerations. In the alternative, Sri Ramachandra Rao claims that the Centre is indifferent and is not demonstrating any anxiety to enquire into the existing situation for the same reasons as above mentioned. In either event, contends the learned Counsel. the Central Government has disregarded so far its constitutional obligations and refused to exercise the functions under Arts. 355, 356 and 357 of the Constitution. Learned Counsel, therefore, prays that a mandamus be given inthe Central Government to enquire into and decide whether the conditions enumerated in Art. 3-56 of the Constitution are existing in the State of Andhra Pradesh, and if so satisfied, the Central Government should irnpo.4e Presidential rule. This briefly is the relief sought for by the petitioner in the present writ petition.


2. For the sake of completeness of facts it may be mentioned that the petitioner filed four separate writ petitions and a combined affidavit for all the four writ petitions. The present writ petition is one of them. The three other writ petitions bear Nos. WP 12425/87, 12805/87 and 12426187. Writ Petition No. 12425/87 is a Writ for Quo Warranto against Sri N. T. Rama Rao, Chief Minister of the State. Writ Petition. No. 12805/87 seeks a mandamus to the authorities concerned to take penal action, including prosecution against Sri N. T. Rama Rao, for violations under the Income-tax Act, Wealth-tax Act, Prevention of Corruption Act and Foreign Exchange Regulations Act. Finally, Writ Petition. No. 12426/87 is for a mandamus for appointing a Commission of Enquiry under S. 3 of the Commissions of Enquiry Act, to enquire into various charges against Sri N. T. Rama Rao, Chief Minister of the State.
3. In the combined affidavit filed running about 180 pages, the petitioner had set out in detail a number of matters. These are not chronologically arranged for the purpose of identification with each one of the writ petitions. In most cases, there are overlappings. If one may say so, it is a mixed- bag from which each item has to be taken out and examined.
4. When these writ petitions came up for normal admission it was felt by a Division Bench of this Court that Rule Nisi should not " issued by applying the ordinary rule of a triable issue or an 'arguable point', but that .Rule Nisi should be issued only if the petitioner made out a substantial prima facie case.


5. Notice of motion was accordingly issued to all the respondents to show cause why the writ petitions should not be admitted and the matters were placed before a Full Bench for consideration. Notice was issued to the learned Attorney-General of India to assist this Court in view of the very peculiar nature of these writ petitions and matters of grave importance involved. Learned Attorney-General Sri K. Parasaran, appeared in response to this notice and spent considerable time in the Court dealing with the various issues and explained the implications thereof. Eminent jurist. Sri Nani Palkhiyala entered appearance on behalf of the Chief Minister, respondent No. 1 and we have heard him at length. Learned Advocate- General of the State appeared for the State Government and made his submissions which we have taken note. We have also heard the Counsel on behalf of some interveners. namely, Sri K. Rama Krishna Reddy, Sri M. Narasaiah and Sri K. R. K. Vara Prasad etc. As the four writ petitions dealt with different aspects of the matters, the question concerning the directions if any to be given to the Central Government relating to the alleged breakdown of the constitutional machinery warranting imposition of Presidential rule in the State under Art. 356 of the Constitution, shall be considered in this writ petition.
6. Obviously because of the preliminary nature of the bearing, none of the respondents in the writ petition filed any counter except Sri N. T. Rama Rao, respondent 1. The counter filed is short. Basically the contention is that the petitioner has no locus standi to file this writ petition and it is, not. therefore. maintainable. Referring to the various contentions it was stated that "the- factual aspect is not being dealt with at this stage. Suffice it to state that they are all frivolous. -scandalous and ill-merited." It is worthwhile extracting below para 4 of the counter :


"4. 1 state that the petitioner on his own showing belongs to Congress-1 Political Party. In all the elections conducted in the State. the candidates belonging to this party were successively defeated by the candidates set up by the Telugu Desam Party of which 1 am the President. The petitioner belongs to the political, pressure group of the Congress-1 Party which having failed in its attempts to destabilise the party in power through democratic process is in abuse of the process of the court trying to further its aims which it could not do so otherwise. I submit that in filing the writ petitions the petitioner has not acted bona fide, but was actuated by political motives. It is relevant to state that the petitioner was set up by the Congress-1 party, as a candidate for the Mayorship of the Visakhapatnarn Municipal Corporation in the recently conducted elections and he defeated by a large margin by the candidate belonging to the Telugu Desarn Party and his writ petition filed for setting aside the election was dismissed on 8-7-87. I state that the issues raised in the writ petitions are not justiciable as they are all political questions which are not within the ambit of the jurisdiction of the courts. The petitioner does not have judicially enforceable legal right and he cannot he satin to be a person aggrieved and hence he has with locus standi to maintain the writ petitions. For these reasons all the writ petitions are liable to he rejected in limine"
7. Taking up the present writ petition, No. 12427/87 in particular the petitioner (respondent'?), states :
 "In this writ petition, the petitioner is seeking for the issuance of a Writ of Mandamus for the imposition of President's Rule in Andhra Pradesh State.The petitioner has no locus standi to seek such a relief nor this Honourable Court has any power or jurisdiction to issue such a writ."


8. Basically, the contention of Sri. Nani Paikhivala appearing for respondent 1 is that the petitioner has no locus standi to file this writ petition and is a busy body. It is pointed out that he is an important Member of she Congress-I Party in the State which is the principal ritual of the ruling Telugu Desam Party. It is said that the petitioner is a disgruntled and frustrated politician and in a state of despondency filed this writ petition along with others to settle political with respondent 1. Inviting attention to what is popularly known as "the Judge's case" in S. P. Gupta v. President of India , learned Counsel reminded us that this Court has to he careful to see that the member of the public who approaches the Court is acting bona fide and not for personal gain or profit or political motivation or other oblique consideration. Learned Counsel urged that this Court must not allow its process to be abused by politicians and others to delay legitimate administrative action or to gain a political objective. Even though the frontiers of public law are expanding far and wide and new concepts and doctrines which will change the complexion of the law are beginning to be Horn, courts mug ensure that in the guise of public interest litigation politicians are not allowed to enter Courts to settle individual political scores. inviting attention to the affidavit filed, learned Counsel pointed out that the petitioner himself does not consider this as public interest litigational all and does not Say so in the affidavit. Sri Palkhivala contends that the writ petition avowedly does not constitute public interest litigation but surely political interest litigation.


9. Sri Palkhivala further urges that in a public interest litigation there is no adversarial rule see Bandhua Mukti Morcha v. Union of India, . There is no political motivation (see the Judges' case) public interest litigation cannot he permitted to d-five out good litigation from the Court (see Sachinandand Pandey v. State of W. B., AIR 1987 SC 1109 at p. 1134). It is further urged that the Court shall not admit a petition which required the Court to perform an administrative or executive function - (see Sachidanand Pandey's case (supra)). It is finally urged by Sri Paikhivala that public interest litigation is entertainable covering one or two specific instances. A petition like the present one containing several hundreds of charges is unprecedented in public interest litigation. It is submitted that for obvious reasons this Court cannot go into the several hundreds of questions which are raised by the petitioner, and the petitioner should, therefore, he asked to seek relief elsewhere.


10. Learned counsel further pointed out that in order to grant the relief prayed for by the petitioner this court will have to encroach upon the spheres reserved for the legislature and the Executive. Learned Counsel pointed out that it is the function of the President of India to impose Presidential Rule under Art. 356 of the Constitution. Appointment of an Enquiry Commission is a function of the appropriate Government under S. 3 of the Commissions of Enquiry Act. Prosecuting a person for violations of laws is a matter within the purview of the authorities administering the relevant Acts. A writ for Quo Warranto is not maintainable unless the person holding the office is shown to have incurred any disqualification to continue to hold the office. In order to grant these reliefs to the petitioner this Court has to necessarily encroach upon the spheres reserved for others and this Court cannot compel or issue a direction to adopt a particular course howsoever desirable.
11. Sri S. Ramachandra Rao, learned Counsel for the petitioner invited our attention to a catena of cases in support of 6is contention that the traditional approach towards public interest litigation has undergone enormous changes in Eighties and the frontiers of public interest litigation are now so enlarged that if a matter concerning any definite public importance is brought to the notice of the Court, the Court is bound to act.


12. We have also had the benefit of the learned Attorney General explaining how the public interest litigation has come to stay in this country and the salutary results flowing from out of the Courts considering public interest litigation. Learned Attorney General agreed with Sri Palkhivala that enlarging the scope of the public interest litigation would open up the floodgates of litigation. Learned Attorney General pointed out that on grounds of inconvenience and hardship courts cannot refuse to open floodgates of public interest litigation and halt the progress of public good. Learned Attorney General characteristically relied on the observations of Sri Palkhivala himself in his book, "We, The People". Our attention has been invited to the following remarks of Sri Palkhivala at page 224 concerning this aspect :
"The argument that such a liberal extension of the doctrine of Locus Standi would open up the floodgates of litigation was nailed by Prof. K. E. Scott in words which were approved by the Australian law Reforms Committee :
"The idle and whimsical plaintiff, a dilettante who litigates for a lark, is a spectre which haunts the legal literature, not the court room.


As Krishna Iyer, J., in Fertilizer Corporation Kamgar Union's case AIR 1981 SC 344 had observed,

"if a citizen is no more than a wayfarer or officious intervener without any interest or, concern beyond what belongs to any one of the 660 million people of this country, the door of the Court will not be ajar for him. But if he belongs to an organization which has special interest in the subject-matter, if he has some concern deeper than that of a busybody, he cannot he told off the gates, although whether the issue raised by him is justiciable  may      still   remain     to     be considered."

Learned Attorney General has also invited our attention to a number of cases bearing on the point. We do not consider it necessary to catalogue all these cases in the view that we are taking.


13. There is no doubt that the petitioner belongs to a rival political party. There may also perhaps be no doubt that the writ petition is filed out of political considerations. The question for consideration is whether the petitioner can be thrown off the portals of this Court for the above reasons. If the allegations contained in the writ petition are vague, unsubstantial, political in character and roving in nature, it might lend sufficient justification for the Court not to entertain the petition. We have, therefore, critically looked into the various contentions raised in the writ petition. Whether or not true, several of the allegations are grave. It is alleged that the first respondent secured exemptions under the Urban Ceiling Regulation Act contrary to the provisions of that Act by using his official position as Chief Minister. Several documents in support of these allegations were filed. Allegations were made that the first respondent secured for himself and his relations exemptions from the levy of entertainment tax on wholly untenable grounds, clearly violating the provisions of the Entertainment Tax Act. There are allegations that enormous public funds were spent on properties belonging to the first respondent and his relations. A large number of Government Orders were filed to fortify this plea. It is further alleged that on the official residence of the first respondent. which does not belong to him, but to one of is sons, several lakhs of Rupees were spent n renovation and remodelling contrary to ales governing the matter. Copies of orders passed by the Government from time to time were filed. There are also allegations of burning of villages with the connivance and under instructions from the Police Department killing of various persons in false encounters and annihilation of several villages consisting of Scheduled Tribes and Scheduled by the people belonging to the community of the first respondent. There is a further allegation that in making appointments to high offices, persons belonging to the community of the first respondent were elected. A detailed account of such appointments was given in the affidavit. It is alleged that these appointments violate Arts. 14


of such appointments was given in the affidavit. It is alleged that these appointments violate Arts. 14 and 16 of the Constitution. Various other acts of the Executive were questioned with supporting details on the ground that all hose acts were performed by the Government at the behest of the first respondent.


14. The above allegations which are merely illustrative and not exhaustive, give in account of some, of the serious allegations made against the first respondent. It is not possible to know at this stage whether these Allegations are true or not, because the first respondent in the affidavit filed by him did not choose to deny the allegations. He only Characterized them as "frivolous, scandalous and ill-merited." The counter-affidavit must cave been drafted by expert legal advisers of he first respondent and it is not as if the first respondent omitted to deny these allegations by accident. As matters stand, we have to take it that the first respondent did not advisedly choose to deny the allegations made against him. May be if a counter is filed by him after the admission of the writ petition something may be said about these allegations, but just now we are not in a position to throw but the allegations contained in the affidavit as of no consequence. In our opinion, a writ petition containing serious allegations touching upon matters of great public importance cannot be thrown out on the short ground that it is filed by a political rival and for political considerations. The best course as suggested by the learned Attorney General, is to look into the allegations critically and if this Court is impressed that the allegations are serious in character and stand uncontroverted at the present time, the locus standi of the petitioner may not be open to question at this stage. Having loocked into the allegations we are prima facie satisfied that this writ petition is not liable to be thrown off on the ground of locus standi. We need not, however, pronounce upon this issue finally inasmuch as we feel the writ petition could be disposed of on other grounds as we shall presently indicate below.


15. We have already referred to the allegation of the petitioner that a situation has arisen in the State of Andhra Pradesh in which the Government of the State cannot be carried on in accordance with the provisions of the Constitution. According to the petitioner there is a breakdown of the constitutional machinery. In support of this plea the petitioner refers to the following events :
 (a)Persons who show hostility to the ruling party are locked up in police custody on one pretext or the other and as many as 25 persons (details furnished) died in police custody while in lock-up between January, 1985 and August, 1986. No investigation worth the name was ordered into these lock-up deaths.
 (b) In fake encounters as many as 27 persons (details furnished) were killed between January, 1985 and June, 1986. According to the petitioner, these people were ruthlessly killed by the police in the guise of 'political encounters', and no enquiry, worth the name, was ordered.


(c) Tribal villages were en masse, burnt on suspicion that extremists and Naxalites were being harboured in these villages, rendering people homeless, Several hamlets in Visakhapatnam, East Godavari and Adilabad Districts, were burnt. Representations made by the Andhra Pradesh Civil liberties Committee and other voluntary Organizations received no attention.
 (d) The State is endeavouring to extern the tribal population in Adilabad District on the ground that they illegally crossed into the border District of Adilabad from the State of Maharashtra.
 (e) In July 1987, thousands of villages in Chintapalli area were burnt down and the Samanta tribals were being hunted down and their villages were being burnt. The petitioner refers to a police Radio Message flashed to the combing party stating:
 "......... this is to inform you that under the directions of the Chintapaili DSP villages where Bagata and Gadaba are living should not be disturbed and you are allowed to burn only the villages where the Kodu tribals (Samantas) are living. These directions were given by the DSP ......."
(a)The petitioner refers to a statement reportedly made by the State Director General of Police on 2-7-87 and published in the Indian Express admitting the correctness of the above Radio Message, adding that:
 "it may have been done because tribals were sheltering Naxalites."
(b)In Padiri Kuppam village of Chittoor District, the entire Harijan colony was razed to the ground and people were killed for their failure to support the ruling party. No action, worth the name. is taken till now.


(c)In July 1985, several hundreds of Harijans were massacred in Karamehedu village of Prakasam District by the rich landlords belonging to the cornnnunity of the first respondent. No action, worth the name, is taken so far to book the offenders.
(d)In Neerukonda village, rich landlords.. belonging to the community of the first respondent, killed the Harijans and injured several other Harijans. They attacked the harijans with axes, spades, sticks and mercilessly beat them. No action whatsoever is taken so far.
(e) Closely following the above incident, the entire Harijanwada of Neerukonda village was reduced to ashes by fire on 25-7-87. Complaints made by various persons that the houses were set on fire had not received attention.
(f) In Dechavaram village of Guntur District persons belonging to Reddy community were attacked and several persons were killed.
(g) In Dontaili village of Nellore District rich landlords belonging to the community of the first respondent axed to death a Backward Class labour leader vide report in the Indian Express dt. 29-8-87. The situation grew tense and in the scuffles that followed, the legs of another Harijan leader were chopped off in broad day-light.
(a)In Rayachoti village of Cuddapah District the Muslim population are being harassed on the alleged ground that they supported the Congress-I in the Mandal and other elections.
(b)Persons belonging to weaker sections in Krishnapuram village in Gorantia Assembly Constituency, Anantapur District, were attacked by the Telugu Desam Party workers. About 1 5 houses, including 4 pucca buildings, food grains and currency notes were burnt in the attack. Bombs were freely used.


(c)Confrontation threatens between the Legislature and the High Court on account of a resolution passed by a majority of the legislators at the instance of the first respondent to disobey the High Court's orders. There is a threat to the cordial relations till now existing between the High Court and the State Legislature.
16. Apart from the above allegations the petitioner has referred to in his affidavit the alleged acts of misrule by the Government and the acts of alleged dishonesty and corruption by the first respondent and his relations. It is alleged that public funds are being diverted for the benefit of the first respondent and his relations. It is also urged that at the instance of the first respondent exemptions under the Urban Ceiling Regulation Act were being granted tb the relations of the first respondent and others. It is further urged that appointments to high offices in the State were made or are being made from among the persons belonging to the community of the first respondent and persons belonging to other communities are ignored.


17. Sri Palkhivala appearing for respondent 1, urged that the petitioner has no right to ask for the imposition of President Rule in the State and much less could this Court exercise jurisdiction to give any directions to the Central Government in this regard. Inviting attention to the decision of the Supreme Court in State of Rajasthan v. Union of India, Sri Palkhivala urged that Art.356(1) of the Constitution calls for an assessment of a situation. As Art. 356(1) embraces matters if political and executive policy and Expediency courts cannot interfere with these unless and until it is shown what constitutional provision the President has contravened on admitted grounds of action under Art. 356(1) if the Constitution. It is pointed out that the satisfaction of the President under Art. 356(1) ; a subjective one and cannot be tested by reference to any objective test. In such an vent, the decision must necessarily be left to he executive branch of the Government. It cannot, by its very nature, be a fit subject- matter for judicial determination. Sri Palkhivala has also invited our attention to another decision of the Supreme Court in Bhut Nath v. State of West Bengal, . One of the questions raised in this case was whether the continuance of Emergency proclamation issued by the President of India is valid and he citizen's fundamental right could remain suspended. It was claimed that actually no circumstances existed justifying the reclamation of Emergency and consequently the fundamental rights of a citizen cannot be suspended in the guise of Emergency. Dealing with this contention, the Supreme Court observed :


"We have to reject summarily the last submission as failing outside the orbit of judicial control and wandering into the para- political sector. It was argued that there was o real emergency and yet the proclamation remained unretracted with consequential peril fundamental rights. In our view, this is a political, not justiciable issue and the appeal could be to the polls and not to the Courts ..... True, an emergency puts a broad blanket blindfolding of the seven liberties of Art. 19 and its baseless prolongation may devalue democracy. That is a political matter dehors our ken. for the validity of the reclamation turns on the subjective satisfaction of the President that a grave emergency, of the kind mentioned in Part XVIII. or its imminent danger exists."
Relying on the aforesaid observations. Sri Palkhivaia submitted that this Court cannot go into the question whether a situation exists in the State justifying the imposition of the President Rule.


18. Learned Attorney General of India, assisting this Court, pointed out that the exercise of power under Art. 356 is largely coloured by political considerations and it is not open to this Court to give any mandamus in the terms prayed for by the petitioner. Learned Attorney General invited our attention to a decision of this Court in In Re A. Sreeramulu,. . Dealing with the question of satisfaction for the purpose of Art. 356(1), Chinnappa Reddy J., (as he then was) observed that the issue of President's satisfaction under Art. 356 is basically a political issue and consequently the Court cannot go into the question whether circumstances exist justifying the imposition of President's Rule. Learned Attorney General agreed with Sri Paikhivala that the 'satisfaction' required for the purpose of Art. 356(1) of the Constitution should be that of the President and it would be impermissible for this Court to go into the merits of the various matters urged by the petitioner and to record its opinion thereon.
19. Having given our careful consideration to the matter in issue, we must uphold the objections raised by Sri Palkhivala and the learned Attorney General of India to the issuance of a mandamus. While we have set out in some detail the events referred to by the petitioner as justifying the imposition of the President Rule, it is not for us to express any opinion on the same. For the purpose of Art. 356(1) of the Constitution, the 'satisfaction' regarding the existence of a 1situation'in.the State is that of the President of India, and this Court cannot encroach upon the constitutional functions of the President of India.


20. We have already referred to the petitioner's allegation that the Union Government remained grossly indifferent about the alleged happenings in the. State and took no action whatsoever under Am. 355, 356 and 357 of the Constitution. We have also referred to the petitioner's plea that even if the alleged happenings are within the knowledge of the Union Government, still the Union Government has failed to exercise its constitutional power for fear that it would antogonise the non-Congress (1) Government in the State. We have, therefore, asked the learned Counsel for the petitioner to state if the petitioner, belonging as he does to the Party-in-power at the Centre, had occasion to bring to the notice of the Union Government and other constitutional authorities the alleged situation prevailing in the State of Andhra Pradesh and sought any action to be taken. We were told that on 19-8- 87 the petitioner submitted a representation to the Honourable Prime Minister of India, inviting the Prime Minister's attention to the various happenings in the State and prayed for imposition of President Rule. Along with the representation the petitioner filed a copy of the consolidated affidavit filed in the four writ petitions. It may be pointed out that while the aforesaid representation was filed before the Hon'ble Prime Minister on 19-8- 87, this writ petition was filed on 24-8-87. If the Union Government did not take any action on the representation filed by the petitioner, it is entirely understandable as the matter is pending consideration by this Court.


21. Learned Counsel for the petitioner, Sri S. Ramachandra Rao, however, contends that this Court can issue a mandarnus directing the Union Government to exercise its constitutional power and to discharge its constitutional obligations by making appropriate enquiry into the various matters bearing upon the imposition of the President's Rule. We do not think so. The question concerning the imposition of the President's Rule is a matter entirely within the jurisdiction of the President of India who may act upon the advice tendered to him by the Union Government. There are no ground to think that the Union Government is unaware of what has been happening in the State of Andhra Pradesh or that the Union Government failed to take any action even though it is satisfied that condition exist in the State justifying the imposition of the President's Rule. Having made a representation to the Union Government on 19-8-1987, the petitioner should have given sufficient time to the Union Government to examine the representation and come to an appropriate decision in the matter. Without doing so, the petitioner rushed to file this writ petition in this Court within four days after, giving a representation to the Union Government. While we refuse to give any direction to the Central Government in the terms prayed for by the petitioner, we have no doubt that the representation filed by the petitioner as well as the details set out in this judgment will receive consideration of the Central Government and an appropriate decision will be taken.
22. The writ petition is accordingly dismissed with the aforesaid observations. There shall be no order as to costs.


23. We have beard all the four writ petitions together, upon a notice of motion, to make up our minds whether a rule nisi should be issued or declined. in each one of the four cases. As pointed out by Sri Palkhivala these writs have no parallel in the country. Substantial time was spent in unravelling intricate problems that have cropped up and innumerable judicial precedents had to be considered. We had to go through this exercise at considerable personal inconvenience because we are conscious that rules should not be issued in these writ petitions unless a strong prima facie case is made out. Upon notice of motion, the learned Attorney General, Sri K. Parasaran, assisted this Court sitting through the proceedings for considerably long time. We are benefited by his wise counsel. We express our sincere gratitude to the learned Attorney General of India for the assistance given. Deeply exercised by the feeling that the reflections .of these writ petitions may be experienced elsewhere in the country, eminent jurist Shri Nani Palkhivala, appearing for respondent 1, took considerable pains in inviting the attention of this Court to the relevant aspects of the matter. We convey our high appreciation to Sri Palkhivaia for the assistance given to this Court. The learned Advocate General, appearing for respondent 2, has also ably assisted us in the matter. It was a pleasure watching Shri D. Gopala Subrahmanyam assisting so ably the learned Attorney General of India. We are very impressed by his thoroughness on facts and law and we place on record our appreciation of the assistance given by him.


Sri S. Ramachandra Rao the learned counsel for the petitioner, presented the petitioner's case with his usual thoroughness, fairness and ability. We appreciate his services. We are greatly benefited by the arguments of the learned counsel for the interveners, Sarvasri K. Ramakrishna Reddy, M. Narsaiah and K. R. K. Vara Prasad, who enthusiastically . participated      in     the deliberations.


Immediately after the judgment was  pronounced, the learned counsel for the Petitioner made an oral submission that leave to appeal to the Supreme Court might be granted. We have adverted to the relevant Provisions of the Constitution, which are clear. We find no substantial question of general importance which requires to be settled by the Supreme Court involved in this case; Hence leave declined.

24. Petition dismissed.


Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983

JUDGMENT Seetharama Reddy, J.


1. The question of law raised at the instance of the Revenue, in this consolidated reference, pertaining to the common assessee in respect of the assessment years 1966-67 to 1971-72 is :
 "Whether, on the facts and in the circumstances of the case, the assessment in the status of 'body of individuals' in respect of the share income from the firm, T.L. Jagannadham Son, is valid ?"


2. The format of the case, as set out in the statement of case, is that Shankaraiah is the karta of the HUF consisting of himself, his major son, Rajanna alias Raja Veeraiah and his two minor sons, Samba Murthy and Ravinder and his wife. He was a partner in a firm known as M/s. Thota Lingaiah Gari Jagannadham Son, having 30% share. Admittedly, the share income belonged to the HUF, as he was representing the family being the karta of it. The share income from the firm was being assessed in the hands of the HUF up to and including the assessment year 1964-65. On October 26, 1963, there was a partial partition in the family, which was reduced to writing by a memorandum. This partial partition was only in respect of the interest of the family in the aforesaid firm. The division was effected by allotting 12% to Shankaraiah and 6% to each of his sons. The capital standing in the name of Shankaraiah in the firm, which admittedly belonged to the joint family, was divided into four equal shares and necessary entries were also made in the books of the firm as an October 26, 1963. Respective accounts were opened in the books of the firm crediting the amounts divided. It was further agreed that Shankaraiah should continue to remain as a partner vis-a-vis the partnership firm and the profit derived by him will be divided between himself (12%) and the three sons at 6% each. Some movables as well as immovable assets were not divided. On October 26, 1963, another agreement was brought into existence. This agreement, having recognised the partial partition between Shankaraiah and his sons, further mentioned that Shankaraiah will continue as a partner but he will receive shares of profit not only for


mentioned that Shankaraiah will continue as a partner but he will receive shares of profit not only for himself but for his sons who have acquired their rights at 6% each by virtue of the partial partition. It was made clear in the agreement that the sons have no rights in the assets of the firm. They have only right to claim for the profits of 6% each from Shankaraiah. It was further mentioned that the sons had agreed to keep Rs. 12,000 either with their father or with the firm towards the share of 6% already held by each of the parties. Shankaraiah's major son, Veeraiah, was taken as a partner in the firm of M/s. T. L. Jagannadham Son and by virtue of his right he was receiving his share income at 6%.


3. Assessments were made for the assessment years 1966-67, 1967-68, 1968-69 and 1969-70 on Sankaraiah on the basis of partial partition and 12% share income received by him from the firm was included. The share income of the minor sons which they were entitled to as per the partial partition and the agreement dated October 26, 1963, was not included in there was a "body of individuals" consisting of Shankaraiah and his two minor sons, which had to be assessed in respect of 24% shares of profit from M/s. T. L. Jagannadham Son. Consequently, he issued a notice under s. 148 on the alleged "body of individuals" represented by Shankaraiah for the assessment years 1966-67, 1967-68, 1968-69 and 1969-70. For the assessment years 1970-71 and 1971-72 notices under s. 139(2) were issued on the said "body of individuals". The assessee filed disposed of on November 7, 1972. The assessee, being unsuccessful, preferred writ appeals which were also dismissed on July 3, 1974. The learned singled judge, while dismissing the writ petitions, observed :


"Prima facie they are a 'body of individuals' a explained by this court in Deccan Wine and General Stores, Hyderabad v. CIT (R. C. No. 101/1970- [1977] 106 ITR 111). We are of the view that the expression 'body of individuals' should receive a wide interpretation, perhaps not wide enough to include a combination of individuals who merely receive income jointly without anything further as in the case of co-heirs inheriting shares or securities, but certainly wide enough to include a combination of individuals who have a unity of interest but who are not actuated by a common design, and one or more of whose members produces produce or help to produce income for the benefit of all."
4. In the appeal filed by the assessee, there was no reference to this aspect as the only question argued was with regard to the legality of the notice issued under s. 148. Thereafter, the ITO passed the assessment orders for those years on the ground that the share income held in the name of any one of the undivided family members is to be assessed in the hands of "body of individuals". Thus he brought to tax 24% share of the profit from the firm of M/s. T. L. Jagannadham Son in the hands of "body of individuals". He, however, had not taken into account the share income of the major son, Veeraiah, which he received by virtue of his independent right as a partner of the said firm. On second appeal, the Appellate Tribunal placing reliance on a decision in CIT v. Harivadan Tribhovandas , held :


"The Tribunal in extenso quoted some of the observations of the Gujarat High Court and applied the test laid down therein. Applying those tests, the Tribunal held that there was no 'body of individuals' in the case before it. It was found that there was no activity carried on by the 'body of individuals'. All that happened was that there was a partial partition effected in the family and by virtue of that each member was allotted a share. If an asset is incapable of division one of the modes is to dispose of that asset and share the proceeds thereof among the persons entitled to share. Another method may be to keep the property as joint property and the income derived therefrom is only divided. Yet another method may be to allot that particular property in favour of one coparcener who would be asked to compensate the other coparceners. There are no limitations as regards the method of dividing the common property. In this case the family thought fit to divide it in the manner in which they did. The family represented by its karta was admittedly having interest in the partnership firm. The share in the partnership firm is an asset of the family which is the subject-matter of the partial partition. That share can be divided in any manner in which the parties choose to divide. In this case the mode of division is that the karta continues to be the partner via-a-vis the firm but is accountable to the divided members so far as the shares from the partnership firm are concerned. Qua the firm only the karta is the partner and the divided members only appeared as creditors in the books of the firm as the capital has been divided in equal shares and separate accounts are maintained so far as divided members other than the karta.......... Merely because a division has taken place in the manner done by the parties in this case it does not mean that the parties can be held to constitute 'a body of individuals' in regard to the share income from the firm which has been the subject matter of


body of individuals' in regard to the share income from the firm which has been the subject matter of the partial partition. Each of the divided members are only tenants-in-common in respect of the share income from the partnership firm."


5. While distinguishing the case of Deccan Wine and General Stores v. CIT , it was observed by the Tribunal :
 "... that was the case where the business had been carried on by the legal representatives after the death of the individual."
6. Adverting to the observations made by the learned single judge in the writ petitions, the Tribunal held that those observations were only tentative observations and were not final pronouncements. The Tribunal rejecting the argument of the Revenue that the arrangement, which was entered into, brought about a "body of individuals", as one of the body of the individuals earned money by being a partner and sharing the profits thereof among the members of the body, held that for a division of the share of the partnership there was no need for any agreement for passing of the share to the divided members. In this case it was by mutual agreement that Shankaraiah alone has continued as partner but at the same time the interest of shankaraiah was that of the family and that interest having been divided all the members were entitled to a share in that interest. The Tribunal, therefore, found that this sort of division is one of the accepted modes of division of interest of the properties of a joint family and there can be no objection to the same". It was also observed by the Appellate Tribunal :
 "The Tribunal also stated that even though a specific agreement entered into by the parties, Shankaraiah would be under an obligation to pass on the share income to the divided members as per the partial partition."
7. The above conclusion of the Tribunal was reached on the basis of the decision of the Gujarat High Court in the case of Additional CIT v. Chandulal C. Shah [1977] 107 ITR 91 (Guj). Thus the Tribunal held that there was no "body of individuals" to be assessed as a unit of assessment.


8. Revenue's case : The contentions of Sri M. Suryanarayanamurthy. learned counsel for the Revenue, are :
 (1) The definition of "person" for the first time is brought in the concept of "body of individuals" as a unit of assessment by virtue of the I.T. Act, 1961, under s. 2(31). It should be contrasted with the concept of "association of persons". The agreement entered into by Shankaraiah with his two minor sons represented by their mother brought about a "body of individuals" with a common purpose of producing income.
 (2) Even in a case where a superior title is said to arise out of the transactions, the "body of individuals" nevertheless emerges and that being a unit of assessment it has to be assessed as such.
9. Strong reliance was placed on the observations made by the learned single judge in the writ petitions and also on the decision of this court in Deccan Wine and General Stores v. CIT , and a lot of case law cited in support of the above contentions.
10. Case of the assessee : The counter-contentions of Sri Anjaneyulu, learned counsel for the assessee, are :
 (1) that Shankaraiah was holding the 24% share in the partnership firm on behalf of himself and his two minor sons in agreed proportions as per the agreement dated October 26, 1963. Out of the profits realised by him against the 24% share, Shankaraiah was holding in trust under s. 90 of the Indian Trusts Act on behalf of each of his two minor sons the profits corresponding to their 6% shares and those profits right form the inception belonged to each of the two minor sons and not to any alleged association consisting of Shankaraiah and his two minor sons :


(2) that by agreement dated October 26, 1963, Shankaraiah agreed to hold the share of 24% in the partnership firm in his individual name subject to the obligation that the income corresponding to the share of 6% pertaining to each of his two minor sons shall be paid to them. The agreement, therefore, created a superior title in favour of the two minor children and the income corresponding to their 6% share each in the firm was diverted in their favour by an overriding obligation enforceable against Shankaraiah and constituted their income right from the inception. It is was their income although it cannot at the same time be the income of a "body of individuals" allegedly consisting of the father and the two minor sons to be assessed as separate unit of assessment, and (3) that is any event the father and two sons did not constitute a "body of individuals" for the purpose of assessment under the I.T. Act.
11. Relevant material : Before adverting and analysing the arguments and the counter-arguments of the parties, the relevant statutory provision and also the materials contained in the memorandum of partition and the agreement to share may be noticed.
12. Section 2(3) of the I.T. Act, 1961, reads as under :
 "'person' includes -
 (i) an individual,


(ii) a Hindu undivided family,

 (iii) a company,

 (iv) a firm,

 (v) an association of persons or a body of individuals, whether incorporated or not,

 (vi) a local authority, and

 (vii) every artificial juridicial person, not falling within any of the preceding sub-clauses;"
13. MEMORANDUM OF PAST PARTITION "This Memorandum of Past Partition is executed this 26th day of Octomber, 1963, between :
 1. Pabbati Shankaraiah, son of Veeraiah aged about 47 years, resident of Warangal, hereinafter called 'the first party';
 2. Pabbati Rajanna alias Raja Veeraiah, son of Shankaraiah, aged about 22 years, resident of Warangal, hereinafter called 'the second party';
 3. Pabbati Samba Murthy, son of Shankaraiah, aged about 15 years, resident of Warangal, hereinafter called 'the third party';
 4. Pabbati Ravinder, son of Shankaraiah, aged about 9 years, resident of Warangal, hereinafter called 'the fourth party';
14. (The parties 3 and 4 being minors are represented by their mother and nearest relative, Pabbati Agamma, wife of Shankaraiah, acting as guardian for them for the limited purpose of partition......)