The appellant is the manager of a joint Hindu family firm carrying on business in bidis. He is registered as a dealer under section 8 of the Act. Every registered dealer under the Act is required to furnish quarterly returns of his turnover within one month from the end of the quarter. For the year 1949-50, i.e., for the period from October 22,1949, to November 9, 1950, he submitted a return of his turnover on October 5, 1950, for one quarter only and made a default in respect of the other quarters. The Assistant Commissioner of Sales Tax, Nagpur, issued a notice to the appellant on August 13, 1954, in Form No. XI under section 11(1) and (2) of the Act in respect of the turnover of the firm for the said period. The appellant thereafter filed the returns for the three quarters in respect of which he had made default, but in the assessment proceedings be contended, inter alia, that the Assistant Commissioner could not assess his escaped turnover as he could only do so within three years from the expiry of the period in respect whereof his turnover had escaped assessment. The Sales Tax Commissioner rejected the said contention, proceeded with the assessment and determined the tax liability at Rs. 15,846. Aggrieved by the said order, the appellant filed a petition under article 226 of the Constitution in the High Court of judicature at Nagpur mainly on the ground that the proceedings before the Sales Tax Commissioner were barred by time under section 11-A of the Act. Civil Appeal No. 102 of 1961 is in respect of assessment of sales tax on the turnover of the appellant for the year 1950-51. The appellant had not filed any return for the whole year. The Assistant Commissioner of Sales Tax, Nagpur, served a notice on the appellant on October 15, 1954, under section 11(4) of the Act. The appellant filed his returns and produced the account books under protest and also raised objections that the assessment proceedings were barred by limitation under section 11-A of the Act. The Assistant Commissioner rejected his plea of limitation and determined his tax liability at Rs. 16,537-5-0. The appellant filed another petition under article 226 of the Constitution in the said High Court for a similar relief. Both the petitions were heard together by Kotval J. The learned judge, following the decision of a Division Bench of that court in Firm Sheonarayan Matadin v. Sales Tax Officer, Raipur, held that, as the notices were issued beyond three years from the expiry of the relevant periods, the Sales Tax Commissioner had no jurisdiction to make the assessments. On that ground he quashed the said assessments.
The suit was resisted by the Union of India and also by the purchasers on diverse grounds. The Union contended, inter alia, that the plaintiffs were not entitled to question the correctness of the assessment of tax in a civil court because the jurisdiction of the court in that behalf was excluded by section 67 of the Indian Income-tax Act, that the plaintiffs were in any event precluded from setting up the plea of a partition between them and Nagappa as a defence to the enforcement of liability for payment of tax in view of the provisions of section 25A(3), that the partition was sham and not intended to be operative and that items 46 to 51 were not the separate estate of the plaintiffs as contended by them. The purchasers (who were impleaded as defendants 5 to 28) contended that there was no invalidity in the proceedings for assessment of tax and that they having purchased those properties for the full amounts for which they were sold, sales in their favour though not confirmed were binding upon the plaintiffs.
The first contention was that it was not a dealer in shares and securities in the relevant account year or in the years past, and that the shares and securities were held by way of investment and the investment surplus was in the nature of a capital receipt. The second contention was that even if the assessee was a dealer in shares and securities in the relevant account year, the Income-tax Officer committed an error in the matter of the computation of profits in not taking the market value of the shares as at the opening day of that year as the cost thereof.
The present case however originated out of one petition under article 226 of the Constitution challenging the validity of various assessment orders. Obviously here, there was only one proceeding. It could not be said that there were as many proceedings as there were assessment orders for the petitioner had by a single petition challenged them all together. When an appeal is taken to this court from the judgment of the High Court in such a petition, it is impossible to contend that there are more appeals than one.
The first thing that we wish to observe is that the two regulations made a clear distinction between the interim maintenance allowances and the commutation sum. The allowances were paid under the Abolition Regulation which said nothing about the right to the payment of the commutation sum; that right was created only by the Commutation Regulation. The allowances were measured as a fraction of the current income while the commutation was a multiple of annual revenue.
The appellant appealed from the original orders of assessment and those appeals having failed, filed revision petitions against the appellate orders, but those were also unsuccessful. He then got a large number of questions of law referred to the High Court under section 24 of the Act. The present appeals arise out of the High Court's answer to those questions. There are three appeals now before us one in respect of each of the said three years.
The present appeal has been filed by he widow of the son and other legal representatives. Banerjee was the owner of several collieries in the Jharia Coal fields in the State of Bihar and was also a contractor for raising coal. This matter relates to the assessment year 1946-47. For that year, Banerjee was assessed on an income of Rs. 1,28,738. The assessment was then re-opened under s. 34 of the Indian Income-Tax Act, and was enhanced, but subsequently on appeal, it was reduced to a sum a little below the original assessment. The present assessment was made on a second re-opening of the case under s. 34 in the following circumstances.
the admitted case of the parties that the services of the assessee were not terminated for any default or misconduct on the part of the assessee but the services were terminated because the company did not want to continue the assessee in their employment. It is also the admitted case that no notice of twelve months for the termination of the service was given by the company to the assessee as required by the contract. In lieu of the notice the company paid to the assessee on September 12, 1947, a sum of Rs. 18,096-1-0 which was the amount computed as salary for twelve months after deduction of income-tax at the source.
The ladies issued the cheques on their accounts into which were paid by the firm certain amounts by cheques. Into Mrs. C. M. Kothari's account was paid an amount of Rs. 27,000 which was debited on October 24, 1947, to D. C. Kothari. It was stated to be a birthday gift by him to his mother. On November 13, 1947, another amount of Rs. 3,000 was paid into Mrs. C. M. Kothari's account which was debited to the account of D. C. Kothari as a gift by him to his mother for Diwali. Similarly, on November 13, 1947, Mrs. D. C. Kothari's account with the bank was credited with a sum of Rs. 30,000 by a cheque issued by the firm. This was debited to the account of C. M. Kothari and was shown as a gift by him to his daughter in-law.
the facts and circumstances of these cases, whether the dividends referred to above could be included in the total income of Mr. P. J. P. Thomas under the provisions of sec. 16 (1) (c) of the Indian Income-tax Act ? The Tribunal accepted these applications and referred the aforesaid two questions to the High Court. By its decision dated February 28, 1961 the High Court answered the first question against the assessee and the second question in his favour.
The appellant is alleged to be a firm registered under the Indian Partnership Act. It carries on business within the limits of the Ludhiana municipality. It imported Sambhar salt into the octroi limits of the Ludhiana municipality. The Municipal Committee, Ludhiana, imposed terminal tax on the said salt and the appellant paid a sum of Rs. 5,893-7-0 towards the said tax between October 24, 1947, and December 8, 1947.
The Court accordingly quashed the proceedings for recovery of the amounts of penalty and directed that the Revenue authorities do grant in respect of the instalment of tax due relief to the respondent under Rule 8-A of the Zamindari Abolition and Land Reforms Rules in the manner indicated in the judgment. Against that order, the Collectors of Sultanpur and Allahabad have appealed to this Court, with special leave.
The Tribunal found the assessee's explanation with regard to the said entries for the amounts of Rs. 33,000 and Rs. 10,000 under the heads "Ghar Khata" and "Muhammad Islam Khata" respectively, acceptable and ordered their deletion from the assessment for the year 1945-46, but otherwise maintained the orders of the Income-tax Officer. Thereafter, under the orders of the High Court under section 66(2) of the Act made at the instance of the assessee, the Tribunal framed six questions in each of the assessment cases and referred them to the High Court, for its decision.
The Appellate Assistant Commissioner asked the Income-tax Officer to prepare from the records in the possession of the department statements of income returned and income assessed in the hands of the appellant for the years 1931 to 1945. These statements were duly prepared. The Income-tax Officer also prepared statements of the capital accounts in the different books of the appellant and the amounts withdrawn by her therefrom, for the assessment years 1936-1937 to 1946-1947. No books of account were, however, available for the year 1944-1945 and for the first four months of 1945-1946, some of these books, it was stated, were destroyed as a result of an explosion which took place in the Bombay docks on April 14, 1944.