# [1967] 1 S.C.R. 913

- **Citation:** [1967] 1 S.C.R. 913
- **Court:** Supreme Court of India
- **Decided:** 1967
- **Bench:** J.C. Shah, V. Ramaswami, V. Bhargava
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1967-1-s-c-r-913-3933
- **Pages:** 8

## Headnote

Indian Income-tax Act (11of1922), s. 25A ands. 34- Order record·
ing partition of Hindu undivided family-Power to reassess family as a
unlt thereafter-Wh•ther exlsls.
C. his wife, and his three sons were originally assessed to income-tax
in the status of a Hindu undivided family.
C filed a suit in 1948 iu the
High Court of Bombay for partition and separate possession of his share in
the joint family estate. In
1950 the High
Court passed a decree. by
consent declarine that as from October 15, 1947 the joint family stood
dissolved, that all the members of the family had become separate in
food, worship and estate from th"at date, and that each member of the
family was entitled to a fifth share in the properties movable and immovable belonging to the family subject to the right of maintenance
in favour of C's mother.
Pursuant to the decree C took his share in
the properties allotted to him, separately. The other properties remained
undivided between C's wife and his three sons each holding a fourth
share as tenant in common witfi the other co-sharers. In December 1952,
C applied to the Income-tax Officer for an order recording the partition
and requesting that assessment be made of the members of the family
separately in .accordance with the pro\isions of s. 23 read with s. 25A
of the Income-tax Act, 1922.
The Income-tax Officer by an order in
January 1953 granted the application and for the period after tho High
Court's decree assessed all the members of the erstwhile family separately.
Subsequently however a notice under s. 34 of the Act for the
assessment years 1951-52, 1952-53, and 1953-54, for assessing the Hindu
undivided family of four members, namely, C's wife and bis sons, was
issued on the ground that the income of the family bad escaped assessment. The assessees' plea that they did not, in the years of assessment,
ccnstitute a Hindu undivided family and that they could not be so
assessed after an order under s. 25A had . once been passed was not
accepted by the Income-tax Officer.
The Appellate Assistant Commi•-
sioner reversed the Income-tax Officer's order but the Appellate Tribunal
testored it.
The High Court in reference held in favour of the Revenue.
The assessee came to this Court in appeal.
HELD : (i) The Income-tax Officer has jurisdiction under s .. 25A(l)
to make an order recording . that joint family property baa been partitioned if he is satisfied that the property has been partitioned 'in deflnite
portions'.
The jurisdiction may be exercised by the Income-tax Officer
even if there be partition between 'groups of members' of the family. A
complete partition in definite portions among all the members of the
family is not a condition of the exercise of that jurisdiction, nor doeo
the expression 'group ot members' refer only to a group consisting of
a bead of a branch and his sons who remain undivided. [916 G-HJ
In the present case there was no doubt that C took .possession of bis
share in the family estate which was allotted to him.
The asse.ssees constituted a group and between them and C there bad been a partition in
definite portions.
The conditions for the passing ot an order under
s. 25A(l) were thus satisfied. [918 A-Bl
914
IWUIOI OOU&T UPOl.TS
(1967) I S.C.ll
(ii) Afler !be High Court had decreed the partition the orisiAal 1&
divided family bad no existence in fact or in point of law-personal
or iDl:ome-tax.
Section 25A(3) did not help the Revenue for it oa!J
requirea the Income-tu Officer to continue to asses• a Hindu undivided
fulily Wllich baa been divided under the pel'80Dlll law as Jong as i:o
order under s. 25A(I) bas been
recorded. Once an
order under
s. 25A(l) bas been recorded cl. (3)
of s. 25A bas no application.
[918 DJ
(iii) It is true that an assCSllllcnt year under the Income-tax Act Is
a self contained assessment period and a decision in the assessment year
doa not ordinarily operate as ra judicaJa. But this rule doet not app!J
B
ln dealing with an order under s. 25A(l). Income from pro

## Text

•
913
A
JOINT FAMILY OF UDAYAN CHINUBHAI ETC.
B
c
D
E
F
G
H
v.
COMMISSIONER OF INCOME-TAX, GUJARAT
October, 14 1966
[J.C. SHAH, V. RAMASWAMI AND V. BHARGAVA, JJ.)
Indian Income-tax Act (11of1922), s. 25A ands. 34- Order record·
ing partition of Hindu undivided family-Power to reassess family as a
unlt thereafter-Wh•ther exlsls.
C. his wife, and his three sons were originally assessed to income-tax
in the status of a Hindu undivided family.
C filed a suit in 1948 iu the
High Court of Bombay for partition and separate possession of his share in
the joint family estate. In
1950 the High
Court passed a decree. by
consent declarine that as from October 15, 1947 the joint family stood
dissolved, that all the members of the family had become separate in
food, worship and estate from th"at date, and that each member of the
family was entitled to a fifth share in the properties movable and immovable belonging to the family subject to the right of maintenance
in favour of C's mother.
Pursuant to the decree C took his share in
the properties allotted to him, separately. The other properties remained
undivided between C's wife and his three sons each holding a fourth
share as tenant in common witfi the other co-sharers. In December 1952,
C applied to the Income-tax Officer for an order recording the partition
and requesting that assessment be made of the members of the family
separately in .accordance with the pro\isions of s. 23 read with s. 25A
of the Income-tax Act, 1922.
The Income-tax Officer by an order in
January 1953 granted the application and for the period after tho High
Court's decree assessed all the members of the erstwhile family separately.
Subsequently however a notice under s. 34 of the Act for the
assessment years 1951-52, 1952-53, and 1953-54, for assessing the Hindu
undivided family of four members, namely, C's wife and bis sons, was
issued on the ground that the income of the family bad escaped assessment. The assessees' plea that they did not, in the years of assessment,
ccnstitute a Hindu undivided family and that they could not be so
assessed after an order under s. 25A had . once been passed was not
accepted by the Income-tax Officer.
The Appellate Assistant Commi•-
sioner reversed the Income-tax Officer's order but the Appellate Tribunal
testored it.
The High Court in reference held in favour of the Revenue.
The assessee came to this Court in appeal.
HELD : (i) The Income-tax Officer has jurisdiction under s .. 25A(l)
to make an order recording . that joint family property baa been partitioned if he is satisfied that the property has been partitioned 'in deflnite
portions'.
The jurisdiction may be exercised by the Income-tax Officer
even if there be partition between 'groups of members' of the family. A
complete partition in definite portions among all the members of the
family is not a condition of the exercise of that jurisdiction, nor doeo
the expression 'group ot members' refer only to a group consisting of
a bead of a branch and his sons who remain undivided. [916 G-HJ
In the present case there was no doubt that C took .possession of bis
share in the family estate which was allotted to him.
The asse.ssees constituted a group and between them and C there bad been a partition in
definite portions.
The conditions for the passing ot an order under
s. 25A(l) were thus satisfied. [918 A-Bl
914
IWUIOI OOU&T UPOl.TS
(1967) I S.C.ll
(ii) Afler !be High Court had decreed the partition the orisiAal 1&
divided family bad no existence in fact or in point of law-personal
or iDl:ome-tax.
Section 25A(3) did not help the Revenue for it oa!J
requirea the Income-tu Officer to continue to asses• a Hindu undivided
fulily Wllich baa been divided under the pel'80Dlll law as Jong as i:o
order under s. 25A(I) bas been
recorded. Once an
order under
s. 25A(l) bas been recorded cl. (3)
of s. 25A bas no application.
[918 DJ
(iii) It is true that an assCSllllcnt year under the Income-tax Act Is
a self contained assessment period and a decision in the assessment year
doa not ordinarily operate as ra judicaJa. But this rule doet not app!J
B
ln dealing with an order under s. 25A(l). Income from property of 1
Hindu undivided family 'hitherto' assessed as undivided may be assessed
.eparately if an order under s. 25.Ai I) had been passed. When such an
Older is made the family ceases to be a Hindu undivided family. ne ...
dter that family cannot be aaseS'ed in the status of a Hindu undivided
C
family unless the order is set aside by a competent authority. (919 F-H)
(iv) Section 34 of the Indian Income-tax
Act confers no general
power of reviewing an order passed under s. 25A(I) which b in ill
ft1Y nature effec1ive for all subsequent years.
The only course for
tbe Income-tax Officer, if he wants the order to be reconsidered ii to
move the Commissioner of Income-tax to take action IJnder s. 33B ol
tbe Act to set aside the order under s. 25A.
(920 C-DJ
D
Gordhandas T. Mangaldas v. Commissioner of lncume-tax, Bomba,,
ll I.T.R. 183 and Commissioner of lncom•-tax, D•lhl and Rajasth<ut •·
GllllOhi UJ Sham Loi, 61 I.T.R, 408, referred to.
CIVIL APPELLATE JUR1so1CTJON : Civil Appeals Nos. 946 to 948
of 1965.
Appeals from the judgment and order dated September 15,
E
1964 of the Gujarat High Court in Income-tax Reference No.
19 of 1963.
A. K. Sen, 0. P. Malhotra, 0. C. Mathur, for the appellants.
S. T. Desai, S. K. Aiyar and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by
Shah, J. Sir Chinu bhai Madhavlal, Baronet, his wife Lady
Tanumati and his three sons Udayan,
Kirtidev and Achyut
were originally assessed to income-tax in the status of a Hindu
undivided family by the First
Income-tax Officer, A-III Ward,
Bombay. Sir Chinubhai filed suit No. 2176 of 1948 in die H!gh
Court of Judicature at Bombay for partition and separate possession
of his share in the joint family estate. On March 8, 1950, the High
Court of Bombay passed a decree by consent declaring that as from
October 15, 1947 the joint family stood dissolved and that all the
members of the family had become separate in food, worship and
estate from that date and that each member of the family waa
entitled to a fifth share in the properties movable and immovable
belonging to the family, subject to the right of maintenance in favour
of the mother of Sir Chinubhai. In Sch. A Part I properties which
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B
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ClllNUBHAI JT. FAMILY v. C.I.T. (Shah,/.)
915
were allotted to Sir Chinubhai were set out; in Parts II & ill of
Sch. A properties which were collectively allotted to the share of
Udayan, Kirtidev, Achyut and Lady Tanumati were set out. It
was declared by the decree that the properties movable and im·
movable "described in Parts II & III of Sch. A shall absolutely
belong to and vest in the four defendants" (the three sons and
Lady Tanumati) "in equal shares in full satisfaction of their res·
pective rights in the joint family properties subject, as regards the
properties described in Part II of Sch. A, to the provisions of the
Baronetcy Act". Schedules B, C & D set out the debts and liabi·
lilies of the joint family. Pursuant to the decree, Sir Chinubhai
took his share in the properties allotted to him, separately. The
other proporties remained undivided between Udayan, Kirtidev,
Achyut and Lady Tanumati-each holding a fourth share as tenantin-common with the other co-sharers.
On December 3, 1952 Sir Chinubhai applied to the Incomctu Officer, A·III Ward, Bombay for an order recording the partition and requesting that assessments be made of the members of
the family separately in accordance with the provisions of s. 23
read with s. 25A of the Income-tax Act. The Income-tax Officer
by order dated January 6,
1953, granted the application. .He
observed that pursuant to the decree of the High Court for partition
the properties of the "Hindu undivided family were distributed
between two groups-one consisting of Sir Chinubhai and the other
E Consisting of his wife and his three sons", and since all the conditions
of s. 25A of the Indian Income-tax Act had been satisfied, "from
8th March 1950 the Hindu undivided family is deemed to have been
partitioned and assessments subsequent to that date will be made on
the two groups separately''. The Income-tax Officer, Ahmedabad,
thereafter assessed Lady Tanumati and the sons of Sir Chinubhai
F
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separately.
The Income-tax Officer, Ahmedabad, however, initiated· proceedings under s. 34 of the Indian income-tax Act, 1922, for the
assessment years 1951-52, 1952-53 and 1953-54 for assessing the
Hindu undivided family of the four members "Udayan, Kirtidev,
Achyut and Lady Tanumati" -who will hereinafter collectively
be called "the assessees" on the plea that the income of the family
had escaped assessment. The assessees contended that they did
not in the years of assessment referred to in the notice constitute a
Hindu undivided family and the Income-tax Officer had no power,
after the order passed on January 6, 1953, to assess them in the
status of a Hindu undivided family. The Income-tax Officer rejected the contention.
In appeal to the Appellate Assistant Commissioner the order
of assc:ss':llent under s. 34 was set aside, The Appellate Assistant
Comm1ss1oner held that the decree passed by the High Court of
916
SUPllEMB COUil T llBPOll TS
(1967] I S.C.R.
Bombay brought about a complete disruption and severance of
A
the joint status of the original family, and merely because the asses·
sees after severance had lived and traded together, they could not
be assessed as a Hindu undivided family.
He also held that after
an order under s. 25A was passed by one Income-tax. Officer,
another Income-tax Officer had no power to modify it or ·to circumvent the same by seeking to assess the assessees as a Hindu undivided
B
family.
In appeal by the Income-tax Officer, Ahmedabad, the Appellate
Tribunal restored the order passed by the Income-tax Officer. In
the view of the Tribunal, by the decree of the High Court there was
severance of the joint status between the members of the joint
Hindu family, but the partition was partial, and "it did not follow
C
that as regards the remaining persons or the remaining properties
which had not gone out of the fold of the Hindu undivided family
the assessment in respect thereof could not be made in the status of
a Hindu undivided family." The Tribunal rejected the view that
once an order under s. 25A(I) is passed, the Income-tax Officer
is for ever precluded from making assessment in the status of a
D
Hindu undivided family. The Tribunal thereafter referred at the
instance of the assessees the following question for the opinion of
the High Court of Gujarat:
"Whether on the facts and in the cricumstances of the
case, the assessments made on the assesseo as on a Hindu
undivided family consisting of the three sons of Sir
E
Chinubhai Madhavlal, viz.,
"Udayan, Kirtidev and A~hyut and the wife of Sir
Chinubhai Madhavlal, viz. Lady Tanumati, were correctly
so made?"
The High Court answered the question in the affirmative. Against
that order, these appeals have been preferred by the asscssecs.
An application under sub-s. (I) of s. 25A of the Income-tax
Act, 1922, by a Hindu undivided family or any member thereof
that a partition has taken place among the members of the family,
invests the Income-tax Officer with authority to make an order
recording that the joint family property has been partitioned, if
he is satisfied on inquiry that the property of the family bas been
partitioned among the various
members
or
groups
of
members "in definite portions". The jurisdiction may be exercised
by the Income-tax Officer, even if there be partition between group5
of members of the family. A complete partition in definite portions among all the members of the family is not a condition of the
exercise of that jurisdiction. We do not agree with the plea railed
by counsel for the Department that by the expression "group of
rnemben" it is intended to refer to a group consisting of a head of
JI
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B
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E
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CHINUBHAI JT. FAMILY V. C.I.T. (Shah, J.)
SJ';
a branch and his sons who remain undivided. Section 25A(I) applies
to families governed by the Dayabhaga school of Hindu law as well
as the Mi1akshra school of law: and if the interpretation suggested
by counsel for the Revenue be correct, the expression. "group .of
members" will be meaningless in relation to a Hmdu family
governed by the Dayabhaga school of Hindu law.
But an order recording partition can be made only if the properties of the joint family are partitioned in "definite portions",
that is, the properties are physically divided if they admit of such
division, otherwise in such division as they admit of. In Gordhandas
T. Manga/das v. Commissioner of Income-tax, Bombay(') the High
Court of Bombay held that s. 25A contemplates a physical division
of the joint family property: a mere division of interest in such
property is
not enough. Beaumont, C. J.,
in delivering the
judgment of the Court observed at p. 195:
"I think that the expression "definite portions" indicates a physical division in which a member takes a particular house in which he can go and live, or a piece of land
which he can cultivate, or which he can sell or mortgage,
or takes particular orna_ments which he can wear or dispose
of, and that the expression "definite portions" is not appropriate to describe an undivided share in property where
all a particular member can claim is a proportion of the
income, and a division of the corpus, but where he
cannot claim any definite portion of the property.
No doubt the expression "division in definite portions"
will have to be construed with regard to the nature of the
property concerned. A business cannot be divided into
parts in the same manner as a piece of land; division may
only be possible in the books. Special cases will have
to be dealt with by the Income-tax Officer when they arise.
If he comes to the conclusion, that, having regard to the
nature of the property, what has been done amounts to a
division in definite portions, he will record his finding
under sub-section (I); If he comes to the conclusion that
it does not, then he will have to go on assessing the family
under sub-section (3)."
There is no doubt that Sir Chinubhai took possession
of his share in the family estate which was allotted to him.
1!etween Sir Chinubhai and the assessees there was therefore partition of the joint family property in definite portions. The shares
allotted to the assessees were however not divided in definite
H
portions inter se. It is ttue that Part II of Sch. A of the decree
de11cribed the settled properties undec the Baronetcy Act 8 of 1924
(I) II I.T.R. 183.
918
SUPllBMB OOUJ. T RBPOll TS
( 1967] 1 S.C.R.
and those properties were not capable of physical division. However Part III described properties movable and immovable which
were not subject to any such statutory restrictions and those properties were not divided among the assessees. But the assessees
constituted a group and between them and Sir Chinubhai there had
been partition in definite portions-the portion of the property
allotted to Sir Chinubhai being completely separated from the
property allotted to the asscssees.
Under the decree of the High Court of Bombay the assessees
did not continue to remain members of an undivided Hindu farruly.
It was expressly provided by "the decree that the assessces were
divided inter se and held the property allotted to them as tenant.
in-common. The effect of the order recording a partition was to
recognize for purposes of income-tax
administration that the
joint family status was severed, and the property was divided in
definite portions between groups of members of the family.
After
the order was recorded the original Hindu undivided family had no
existence in fact or in point of Jaw-personal or income-tax. Section 25A(3) on which strong reliance was placed by counsel for
the Revenue only requires the Income-tax Officer to continue to
assess a Hindu undivided family which has been divided under the
personal law so long as no order under s. 25A(l) has been recorded.
Once
an
order under
s.
25A(I)
has
been
recorded,
cl. (3) of s. 25A has no application. If the members of the family
who constituted :i group between whom and the other group there
has been a partition in definite portions constitute a Hindu undivided family, that group may undoubtedly be a;sessed as a
Hindu undivided family: they may be so assessed because of their
relation inter se and not by virtue of s. 25A(3)
The order passed by tho Income-tax Officer, Bombay, was
apparently a valid order which he was competent to make.
When as a result of that order, the l'roperty of the family wu
deemed for purposes of the Income-tax Act partitioned, it was not
open t.o the Income-tax Officer, Ahmedabad, to ignore the order
either for the year in which the partition of the joint family property was recorded, or for any subsequent year, and to assess the
income in the hands of the assessees as if the original Hindu undivided family continued to exist. An order assessing the asscs5ees as members of a Hindu undivided family could be made after
an order under s. 25A had been recorded only it was proved that
under the personal law they formed a joint Hindu family; and of
that there was no evidence.
The contention raised on behalf of the Department which
appealed to the Income-tax Officer and tlle Tribunal that the
original Hindu undivided family of Sir Chunubhai Madhavlal conA
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CHINUBHAI JT, FAMILY V. C.I.T. (Shah,],)
919
tinued to exist, notwithstanding the order of partition recorded under
s. 25A(l),
in our judgment, cannot be sustained. When the
Income-tax Officer, Bombay, recorded an order that the property
had been
partitioned in definite portions, the family ceased to
exist. It is true that among the assessees the property had not been
divided by metes and bounds, but they could still not be assessed
as members of a Hindu undivided family because such a relation
did not exist between them after severance of the joint family
status of the family in which Sir Chunubhai was the karta. The
Income-tax Officer, Ahmedabad, in substance sought to revise the
previous order passed by the Income-tax Officer, Bombay, recording partition under s. 25A, and to revive the original family so as to
make the income of the assessees as well as of Sir Chinubhai liable
to be assessed as if no partition had taken place. and no partition of
the joint family properties had b~en recorded under the Income-tax
Act. That, the Income-tax Officer was plainly incompetent to
do.
Counsel for the Revenue sought to support the order passed by
the Income-tax Officer, Ahmedabad, and confirmed by the Tribunal,
on the ground that it was open to the Income-tax Officer, notwithstanding the order passed under s. 25A(l) in a previous year to
ignore that order in proceedings for assessment relating to a
11ubsequent year, and to hold that there was no severance in fact
between the members of the family and to assess them as a Hindu
undivided family, as if no partition had taken place. It was said
that each assessment year is a self-contained unit and whatever view
may have been taken in procoodings for assessment of an earlier year,
it is .open to the Income-tax Officer to arrive at an independent
conclusion contrary to that decision in respect of another year, if
the circumstances of the ('.ase so warrant. It is true that an asseasment year under the Income-tax Act is a self-contained assessment
period and :i decision in the assessment year does not ordinarily
operate as res judicata in respect of the matter decided in any subsequent year, for the assessing officer is not a court and he is not
precluded from arriving at a conclusion inconsistent with his conclusion in another year. It is open to the Income-tax Officer,
therefore, to depart from his decision in subsequent years, since the
assessment is final and conclusive between the parties only in relation to the assessment for the particular year for which it is made.
A decision reached in one year would be a cogent factor in the
determination of a similar question in a following year, but ordinarily
there is no bar against the investigation by the Income-tax Officer
of the same facts on which a decision in respect of an earlier year
was arrived at. But this rule, in our judgment, does not apply in
dealing With an order under s. 25A(l). Income from property of
a Hindu undivided family "hitherto' assessed as undivided may b!
ai;sessed 'eparately if an o'der under s. 25A(l) had been passed.
•
920
SUPRl!MI! COUI!.T lll!PORTS
(1967] I S.C.R.
When such an order is made, the family ceases to be assessed as
a Hindu undivided family.
Thereafter that family cannot be assessed in the status of a Hindu undivided family unless the order is set
aside by a competent authority.
Under cl. (3) of s. 25A if no
order has been made, notwithstanding the severance of the joint
family status, the family·continue to be liable to be assessed in the
status of a Hindu undivided family, but once an order has been
passed, the recognition of severance is granted by the Income-tax
Department, and cl. (3) of s. 25A will have no application.
Jn Commissioner of /11come-1ax, Delhi and Rajastlzan v. Ganesi
TAI Shyam Lal,(') the High Court of Punjab held that when an
order recognising the total disruption of a Hindu family has been
passed
under s. 25A
Indian Income lax Act 1922,
and an
order of assessment is made on the basis of such an order,
it is not open to the Income-tax Officer to take proceedings
for reassessment under s. 34 of the Act ignoring the earlier order
under s. 25A of the Act on the ground that he has received information that the order under s. 25A was obtained by misrepresentation. The proper course for the Income tax Officer to adopt in
such a case is to move the Commissioner of Income-tax to take
action under s. 338 of the Act to set aside the order under s. 25A.
We agree with the High Court of Punjab that s. 34 of the
Indian Income-tax Act confers no general power of reviewing an
order passed under s. 25A( I), which is in its very nature effective for
all subsequent years.
The answer to the question referred will be in the negative.
fhe appellants will be entitled to their costs in this Court as well as
in the High Court. One hearing fee.
G.C.
Appeal allowed.
(I) 61 1.T.R. '4<JS •
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