Commissioner Of Income Tax, U.p v. Gurbux Rai Harbux Rai

AAG AYIA, SAT TAT, HATH vosqty TCA WA STAC WA (Commissioner of Income Tax, U. P., Lucknow Gurbux Rai Harbux Rai) .(24 aaa, 1971)_ [FaTo Ho UMo FTE AIT To UA War] — aada sifeaa aa daz, (afaenane afafaaa), 1940 (1940 etafafaan deat15) are 10-u ate 15—aa at 5B ata gwQT Baal YS at wrt F at afearaae afaard ara 10-73masa % faq quar fama & fae ste azaare fate wea & faeaaa gla Had yraem wa (frsifedt) ow tfnediga wa a ot aad F aa (dla10YSA) HT BATT HUTT J 4 Fog, 1943 ¥ 21 TA, 1944 we Al aA, 1944 Garg, 1945 aH at care Mar ararafs & eter qzaer Ua we ataeTua fratfedt & at anitare & fare aeracacay Hat a1 waar A varwear ararafeat & faq at F fate at araatfzat F faatfeddF ax afsardel ag afaa far fe qzaen wa & afraaa garg ar faarsa A var 2fautwam ay 1944-45 & faq ax fauifer wzt F. qraax afaardt a agafafrattta fear fe geen ta 4 faa faarsa ar afanaa feat & sa Adyarat at ana Faife ag ath efaa ae a aaa F fae fear aar21 wa:sat aa a cH gay GH Bt aa a ara fasifedt a ora araax Falfaatca at tear) aftarraz afeardt a fratfedt & dal arearet at ga araaz faaiza az fearfaaifedt A ga area} fares age argaa (atta) ayata at frat ade aifes at at 1 ada ofancy & at frantia sifrarfealmarae at gfe we at1 gah qeara afaaeay a wredla araat afafaad, 1922a) are 66(1) & ara ofea afafaan at are 21 Saag a fate sea garatazseq eararaa a fadiaa fee faa al weal & sae wareeny ale fruaifeat v4-_ _7ma era Haq1 see areata & faaa & free ata fag wT aT aT HATHTT ev,... afafaatfa—afafiay at arer 10-u va fase sraey & FY Ue deqaercta arafeag & fraat ofeaecar afaaraae F afar a qatar va BA BTAfac a aedaif frase fer wa. at gaa atoaTAarey afaaraTeafaara at oredt ge a, ag are 15 F sataa } fae gana st att qa usAIL BA TUT F Mela FAI Haast YE HT AY A as ae 10-G F satsT Ffar ga ara at otter wea H faa ga er & aner ar ale st afrmfear oraat fe aar afrareat & arfaer & aaa gr va aa awa % fae atlas farsafeat wat ar| aera aTgat(adret)1 10 waza, 1947 ar fretted F araae Ffraiza & arafaa saat Fag aaa fear ar fe qwaer ua at aAarate (arvatz) at ata Fae atfers farsa gar ari fawar et az cH Catware FT afrarsee afar wt aay cae FT feel aedhea H area aeafer agate ardarfeayF agras agar (adie) fafaraa F HITT AAAGRRT PITTITUT ag afafaatfea fears fe afe grant afaarefaafey. arfarfeat & afees orfaarfedt ar carnaa % fafavaa & orcaHASTA F ATT IT HI BTaT Bal sa araHr afafray, 1922 at arer 33(1)(Al) & ot afafran at are 15 & an-faqas 2, atta srfardl qe wer atafearfear att (4217) 1| fafzez Froid oo,qu° (sfasfaa faa sty % qearq) 62geqan caratea fava afast = [1972]| Ao fate qoiCiCiia ie: aUIA Uo clo Mls, WIXo Vo THT.(aut ana 7)Wit alo Sto WAT|eemeat at site a:GAA UHo Me GTA Wt To Vo MIT(slat attat 3)-|7rare at fauta eararfrafa wo Uto Maz F fear|OS eararfaafa waz- COMMISSIONER OF INCOME TAX, U.P. GURBUX RAI HARBUX RAI August 24, 1971 (K. S. HEGDE AND A. N. 0,ROVER, JJ.J Excess Profits T~x Act, 1940, ss. JOA and J5-Scope of. Excess Profits T~x Act, 1940, ss. JOA and J5-Scope of. "-Section 10~ of the 'Excess Profits Act, 1940, deals \vi th transactiOns _ deyigned to avoid or reduce liability to excess profits tax and emgN-.vcrs the .Excess Profits Tax Officer to n1ake appropriate adjustments as respects liability t~xcess profits tax. But before any action can be taken uJ?,Qer , the section, there should be pending a proceeding for assessment or re-assessment of excess- Profits tax. Under s. 15, if in consequence of definite jnformation .\Vhich has come into his possession,~ the Excess Profits Tax OffiCer discovers that the profits of any chargCable accounting "period have escaped assessment, he Q1ay serve a notice on the as!'essee and proceed to assess the profits liable to excess profits tax. _ ""' __ Jn the present case, the Appellate Assistant Commissioner, in appeal D from the Income-tax Officer order, stated that there was a partial partition in the family of one of the partners of the a'ssessee. On the basis of that order, the Excess Profits Tax Officer started proceedings under s. lOA. He issued notices to the assessee under both' ss. 15 and lOA on the same day, but the notice under s. 15 was ordered to be issued first. After con-sidering the reply of the assessee the Excess Profits Tax Officer passed an order under s. 15 moOifying· the original assessment. On the questions : ( J) whether the Excess Profits Tax Officer was competent to apply the provisions of s. 1 OA- and n1ake the re\.ised assess-ment under s. 15, and (2) whether there was ·any definite inforn1ation by virtue of which the Excess Profits Tax Officer was competent to re-open the original assessment. HELD : ( 1) Though the notices under ss. 15 and !OA were issued on the same date, the requirement.:; of la\V were satisfied, because, the F Excess Profits Tax Officer had initiated pro:cedings under s. 15, before issuing notice under s. lOA by ordering the notice under s. 15 to be issued first. The asscssee also did not take any objection in his reply to the notice under s. lOA· that the notice under s. 15 had not been issued before the notice under s. JOA was issued. p65 F; 366 B-CJ (2) The information... wttich came into the possession of the Excess G Profits Tax Officer of partial -partition having been effected was relevant for th:! purpose o[ s. 15 and once he had initiated proceedings under that section, he \\'as competent~~nd had jurisdiction to examine for the purpose of s. lOA 'vhether partial partition had been effected for· avoidance or reduction of liability to excess profits. [367 B-C] (a) The Appellate Assistant Commissloncr in the proceedings relating to the assessn1cnt of income tax of the asscssce had stated the fact of H partial partition which waS certainly infonnation whiah came into the possession of the Excess Profits Tax Officer. It \vas information received· fron1 the decision of superior authorities and not a mere change of opinion by himself. [3 66 F-GJ (b) lbe proceedings before the Appellate Assistant Commissioner related only to assessment of income tax. Therefore, it could not be said, that because he did not consider whether the object of the partition was to reduce liability to excess profits, there was no escapement for purposes of excess profits tax. [367 Al Bansilal v. C./. T., M.P., 70 I.T.R. 74 (S. C.) and Asm. Controller of Estates Duty, Hyderabad v. H.E.H. Nizam of Hyderabad, 72 I. T.R. 376(S.C. I, applied. CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1225 and 1226 of 1967. Appeals from the judgment and decree dated May 22, 1964 of the Allahabad High Court in Income-tax Reference No. 189 of 1953. S. T. Desai, R. N. Sachthey and B. D. Sharma, for the appel- lant (i,n both the appeals). M. C. Chagla and A. N. Goyal, for the respondent (in both the appeals). The Judgment of the Court was delivered by eq aia F ga eqrqrag. a ade21 aaa, 1971 ae aa ®MART ANT ATS BY LT TA AL ATA HATH FIT seyT Hey aT|faze fear ar fa ear afaarant afafaa, 1940 (faa at afafere war nat@) FT attr 15 & ate fratem ar gafaaica & fae oreen at ag wraatigalchet arer 10-¢ & ata ardaifgat ge Ft af att ?Hag2. aime S agqea gaa FH fee my gem wert HH afar faq oy ByBIATrae UT eaen Ua, fees ay “fratfedt” war Tag, UH tiga21 ga ara ale HIy (fa asa) er arate azar 24 Gangs, 19433&HA, 1944 ate 21 Fa, 1944 F 10 Garg, 1945 aH a art Bear srarafy ahr year ua ate aeaen wes (ate aay afar gara at sfafafacaxt gq) fratfedt & a untere & far® sim (az) quacauae F|afahaa & ata sigaa ct curd tar ararafaal & fac wefaatearat artattgat # faethe & ax ofaardt at ag gfaa feat fe qeaer uae.Br_ afaaar gera at fama at var2 ate 4 garg, 1943 & ater ® ara gata fart mar 2| faatfedt & aaa fix fara & qeatt GH BT TSA.ag a fe mage feag wt F zt wagd unflere feaag & ate gah aia acrazqtat &, fae wearara feaq oa S arare Fa ware F Ala FIST Wea,* frat are art at sin &, stad) adet Bat, faak are ad B ata & ale oraae, FISH AT aAsts| urea araee afafaan, 1922 ¥ aeta frataq 1944-45 & far, frat avafiaa Har ag 19 qazav, 1942 87 WALA,1943 a& @,art fratfta wet H array afeard & ae gfafaaifer fearfe qraem ua Afaa feat ar afaaga feat 2 ae AAT wal Gr aanaraalfs ag ath sfar are & aaa % fae fear qar2) ga: vat ma atfaaifeal at ara aravat a fe at om gaq ce sl ara raat fratc atfear. yfe afoot az, arnt} fate & arat at aaTaT TAT @ safau|afsaraat afrard & sagt alt weerare feag dal arzardi at fratfeat ®Te at gt ara at faafee fear, sraaz faaiea Fqeacafasrd erraifea fag ag arte & faeg frulfedl § agree aga & adie #1 10 WAZA,1947 at saafeert+ cz afafaaifir fear fe qzaer ua & afauaagera 8 Faq aifes faaraa got 81 sak faeargare afufasifea frar— fees ge fe arden ug at sing arafe &art & sifarfawisia airs daz 2000 & sna-dra feet ardie at fear mar at AIK . fo.Te,7 za ade & pearare fess sreare evaer ua, Aad aAelt azaiqrat ara & fa we ad ow aH Ga rer aanfera RAT Tat AT i" gfeamrazaeg ay fagtzar ant (944-45 Wz 1945-46 H faq waHe faatzastata fat ag, afaarnrat afaard & ah 3 Brat, 1951 al arte aratua quar faaifedt oe anita avs afafaaest are 10-0 & ada Hatarfeatae at at | quar & fralfedt & ag wafer ar fe faatfedt ag eae afaa atfr ga mare ot efaa aarataa aat a fran ome fe qeaer Wa F. gera hsgifas forsa at ger sasa afaaraaeHB afar a aaa at ada21 azatt, 1951 are arte are, at afefaas at are 15% aaa ofa fearoat ar, afaarasx afaard # dal ond war srarafeal F fa ga fraieaay sirafia at fear1gadfera frateg 4 gaa afaarast & faaiwm F aaqlstafan faaifeal at ger ara H wearana feat arer-gara at ara afeafaa Bzat at ||. 3. fanifedt 3 afsaraac afar & meat ® fees aera aged(ata) aorta at raha afer at a 1g 1 ala afaaza a faaritasifaaifeat & arta at gfe ae a1 aah crane afaree a ataat afafaaa,1922 a art 66(1) ® ara ofisa afafaam at aren 21% ata farafetaa—[tt][ fate][ seq][ garerare][ Sea][ earaTay][ al][ faafaa][ fac][—] (1) ear ga mine Bacal & arene az att ofefeafaat F aesogrer 15 ® gafeata tet ag fafeaa orasradat frat areart azetaafaaraat h fra afaara, werA ar afaaraae?| frafzat| ay araa araargt| ga: YS (2) aarea arias at afefeafaal & afaarase atest ater 10-¢B yaar my TAH fre ale aR PAT Hare 15 F aela gaoferafaaiia H maway aarataa wea H fag aan ar ? Seq rgraray F eal geal HT IAT THTUCAH fear Shah, C. J. Gurbux Rai Harbux Rai-hereinafter called 'the assessee'-is a registered firm carrying on a business in piece goods and commission agents. It has its head office at Kanpur and a branch office at Farrukhabad. During the chargeable accounting periods July 4, 1943 to June 21, 1944 and June 22, 1944 to July 10, 1945 Gurbux Rai and Harbux Rai (each repre-senting his joint family) were the two partners of the assessees with equal shares in the profit and loss. In proceedings for assess-ment of tax under the Excess Profits for Act 1940 for the two chargeable accounting periods the assessee informed the Tax Officer that the joint family of Gurbux Rai had been dissolved and there was a reconstitution of the business of the partnership with , effect from July 4, 1943. According to the assessee the constitu-tion of the firm after partition was that in the firm at Kanpur the former two partners were interested, their share being equal, but in the business of the firm at Farrukhabad there were three part-ners-Harbux Rai with -/8/- share, Chameli Devi with -/4/- share and Gopaldas with -/4/- share. In assessing tax under the Indian Income-tax Act, 1922 for the assessment year 1944-45 relevant to the account year ending June 21, 1944 the Income-tax Officer held that the case set up by the assessee that there was partition amongst the members of the family of Gurbux Rai could not be accepted. In the view of the Income-tax Officer, an attempt was made "to avoid proper inci-dence of taxation as an after-thought to create evidence for camou-flaging the Farrukhabad business as a separate unit of assessment". The Income-tax Officer directed that the income be assessed as A the income of the assessee and not as the income of a separate· firm. The excess profits tax assessment being consequential upon the income-tax assessment, the Excess Profits Tax Officer assessed the entire income of the two businesses at Kanpur and at farrukhabad, in the hands of 'the assessee firm. Against the order passed by the Income Tax Officer the assessee B appealed to the Appellate Assistant Commissioner who by his order· dated October 10, 1947 observed : ". . . . that partial partition in respect of movable pruperty of Gurbux Rai v·as effected on a date some-where near Asadh Samvat '2000, from which date Far-c rukhabad was conducted by a separate firm consisting of Harbux Rai, Mst. Chameli and Gopaldas". 4, atte 21 qaady, 1971 B garrt gaadt mien F aqara F afraca% at fafavaa 23H oat aaah faq mraeay aad sega Hl Bl Tat aggaarar & fin dat care Sear ararafaat % fag afafan at are 15. wetAaad frame ag af tx & 3 Ba, 1951 artfaaifeat oe arate FH) TE at Bagaara & sqart faaifedt & ag am efra eet HT ater BT Ty aTafafaaaat are 10-0 & saa ary aay a fae ond1 faaifedd & are 10-0 & art fagat at arad fafa sara sega fear) afaarant afsera & ages ATH(fader) & agalest crea Far ate 21 Geadt, 1951 Fave 10-0 aT_ ue mee ofr fearafewwm A aamar fe se afsaraTy afaarel ae [1972] 1 3x0 fo qo afafara at are 10-¢ 3 adta sriafgat area at ge ana ay2ararataat & far are 15% aha alaatfeat afeaq aft 1 gah at ag HETmar fe Te 15 AT ATT 10-4 F ala Aaa ee A ada A i3 Bae, 1951 aw fare we otfirey area oa S ag ease 8 fe are 15 ®aaa gaat wea fart ae At ste are 10-0 % ata ear saa WATTfrarett TE at1|_oe 5. Ame F waqTE wat F aaa J ae farga eqsr 2 fe 3 wrat, F waqTE wat F aaa J ae farga eqsr 2 fe 3 wrat, waqTE wat F aaa J ae farga eqsr 2 fe 3 wrat, wat F aaa J ae farga eqsr 2 fe 3 wrat, aaa J ae farga eqsr 2 fe 3 wrat, J ae farga eqsr 2 fe 3 wrat, ae farga eqsr 2 fe 3 wrat, farga eqsr 2 fe 3 wrat, eqsr 2 fe 3 wrat, 2 fe 3 wrat, fe 3 wrat, 3 wrat, wrat, 1951 Ame F waqTE wat F aaa J ae farga eqsr 2 fe 3 wrat, F waqTE wat F aaa J ae farga eqsr 2 fe 3 wrat, waqTE wat F aaa J ae farga eqsr 2 fe 3 wrat, wat F aaa J ae farga eqsr 2 fe 3 wrat, aaa J ae farga eqsr 2 fe 3 wrat, J ae farga eqsr 2 fe 3 wrat, ae farga eqsr 2 fe 3 wrat, farga eqsr 2 fe 3 wrat, eqsr 2 fe 3 wrat, 2 fe 3 wrat, fe 3 wrat, 3 wrat, wrat,at faatfedt & arate ake Fo wae HAST AIT Twaeq ur afsarTTcateralentgs ot & amet fraat sofera aaa ag &1 ser weela var sa aa ar Y fs ag scare fear afaiiay fe st see eer ae Baar 10-0 %wets cae frareit 7E ft 1 ae afrardt § feafafaa ate Saas fear— MIA“arate at arta & are fer & dae faacalt creat wed atHWA BI MTT 15 F alta Qaar faarat | SRATAT: FETS afaaraat afrarty MST FH TGMT are (0-0 H eta at gaat Frere SeAAT : FETE afaaraat aftara” area & ag ate sa dar 2 fe 15 wrath, 1951faacat & ata gaatFL SAT MET ga ar site ag fade fear var ar fe BY afta ge at WT 1alat vat ag aad 2 fs ee saztar ate area aay feat mar ar fe are10-¢ % ata ferret af gaat Bey ara 15 ® gela gaat aval fareea,||6. afafian at are 15% ecattea @ fe afe tet fafeaa orarard.em—ofarmeres ot afearaac afaaradA grea gt, vt ag sat waar & fsfeat cart car ararafis ® ara, faatea 3 gz, afeaeg, dae fat Aame Ret aa ar tg wer aT aren 13mele frwrat ws qaar A. qeafaceat ot Gat gl, wearer Her art gaat aritet ax aha ate afrarwac ®atfaeardta Q& arat at can ar faatem ar gafaatca ae aba) Q& arat at can ar faatem ar gafaatca ae aba) arat at can ar faatem ar gafaatca ae aba) at can ar faatem ar gafaatca ae aba) can ar faatem ar gafaatca ae aba) ar faatem ar gafaatca ae aba) faatem ar gafaatca ae aba) ar gafaatca ae aba) gafaatca ae aba) ae aba) aba) gayamee a Te afer ar vate aa faster at gafratiy & ater fear ar axar2ea rarataa are afeafad fate ® ATA ag alae sg fH great 10-u—& oeta, feat artardt & few ary ® cect ar feet order & feat & ager tetaraaral Aat arfge wt afaaraazfratem ar gafaatza & fav afraa.araaifeq| gat medt H, sega aah ¥ arc 10-0 ® yqaeayara far aa &ae aT afirard are 15 aT afirard are 15 afirard are 15 are 15 15ada Blaaal YS HAfag Maz aT| ATA atfaeardta Q& arat at can ar faatem ar gafaatca ae aba) Q& arat at can ar faatem ar gafaatca ae aba) arat at can ar faatem ar gafaatca ae aba) at can ar faatem ar gafaatca ae aba) can ar faatem ar gafaatca ae aba) ar faatem ar gafaatca ae aba) faatem ar gafaatca ae aba) ar gafaatca ae aba) gafaatca ae aba) ae aba) aba) gaya Pursuant to this order the Income-tax Offio~r modified the assess-· ment with resP.ect to the Income-tax assessment of the assessee for the assessment years 1944-45 and 1945-46. The Excess Profits Tax Officer however started proceedings under s. 10-A by notice D dated February 6, 1951 calling upon the assessee to show cause why appropriate adjustments should not be made in the assessment, and passed orders in that behalf for both the chargeable account-ing periods holding that the main purpose of the partial partition of the family business of Gurbux Rai was avoidance of excess profits tax liability. By order dated February 21, 1951 passed under s. 15 of the Excess Profits Tax Act the Excess Profits Tax E Officer modified the original excess profits tax assessment. In the revised assessment in pursuance of orders under s. !0-A he included the income of the branch shop at Farrukhabad in the total income of the assessee for purposes of excess profits··-tax assessment. The as~essee appealed against the order of additional assessment con-tending that the Excess Profits Tax Officer was not competent to F re-open the case under s. 15 as he had no definite information coming into his possession to enable him to discover that the profits of the chargeable accounting period had escaped m;~essment. The assessee contended that all the materials in the case were before the Excess Profits Tax Officer at the time of his original assess-ment and no new information came into his possession thereafter. G The assessee also contended that the Excess Profits Tax Officer was not competent to pass any order under s. 10-A merely to make an adjustment in ;;1e revised assessment under s. 15. The Income-tax Appellate Tribunal held that the Excess Profits Tax Officer had received definite information regarding the state of the. law in pur-suance of the appellate order of the Appellate Assistant Com-missioner who had held that the family of Gurbux Rai was parti-H ally partitioned. The Tribunal also held that the Excess Profits Tax Officer was competent to pass an order under s. I 0-A, of the Excess Profits Tax Act. The Tribunal thereafter referred the following questions to the High Court of Allahabad under s. 21 of the Excess Profits Act read with s. 66 ( l) of the Income-tax Act, 1922 : " ( 1 ) Whether on the facts and in the circumstances of tqis case there was any definite information within the meaning of s. 15 by virtue of which the Excess Profits Tax Officer was competent to re-open the excess profits tax assessments ? ( 2) Whether in the circumstances of this case, the Excess Profits Tax Officer was competent to apply the provisions of s. 10-A and make neces-sary adjustments in pursuance thereto in the re-vised assessment under s. 15 ?" The High Comt of Allahabad held that since the Excess Profits Tax Oflicer purported to re-open the assessment under s. 15 of the Excess Profits Tax Act "only because of the order of the Appel-late Assistant Commissioner of Income-tax holding that the Farru-khabad business was no longer the business of the assessee and that the family of Gurbux Rai had partitioned its movable pro-perty, all of which proceeded upon material which was already initially before the Excess Profits Tax Officer and to which he had applied his mind when he made the original assessment, it was not a case where the Excess Profits Tax Officer can be said to have discovered", in consequence of definite information which had come into his possession, that profits chargeable to exo~ss profits tax had escaped assessmenJ. The High Court accordingly answered the first question in the negative. ae aT afirard are 15 aT afirard are 15 afirard are 15 are 15 15 . Gar 2S ¢ Alfa. .,1,aoo eeyei * AYE waa F afeRwy A Tl He ware, TAR ATaT are 10-— Faeartaral far art Bet are15 F welt srdargt srw He et ag aaay va meat & ofa gear al fade ax fear & ay 3 Hratt, 1951 at fae aTTi ag aa é fe are 15 ate are (0-¢ & afta qaard fraraa Fore oF_ dana fag ag & farg oer 158 aha gaa fare ont ar ata cee fearTAT Alt Sa MHL TT fre F are 10-0 F asia Taar fraser ay F aBetare 15 F gels Hrataral YR HT al st ae az Hear TH aga alan apsafareitra ars 7g arity dt, far wa: af fafe grat st 15 ateret ate arer at 10-0 gfe & adt sella ge at qaat sar as iar gt aTae tar Tar e*, afeaco ar faced at ga wa are wa ger 10-9 & seta Hrazaral aymg at aa are15 Fala asa afeag at)Wa: Fat TRA BT, TATfaaifedy & fase ate usea H cer 8 fear arate é| 7. Tar gaa tl araa faaifedt st ac a st cro do Bar A azfader fran fe tet arg fafera araard vat ft oY ae afrardl a ore geat, feat az war ar ah fis 8 ag dar war ar fe gaaa card Far wrarafa& ara fratey a gz me1 eA ga aa A agua dy A gaad Fi agasTgaa (att) ¥10 waezaz, 1947 at faatfedd & araat H faaica aarafergy waa A az aiea far a fe yaw cra Hl Sq Arata (#TATZ)at grat Saat atten fanaagar ar. faa dt ae oa Val arrardt at aTafaarrat afeardy ay aodl tra & fat astiett &asrey aadt afew araHzmraaifeat Fagan agar (aie) F fafaaars H erway qreagpa gsFA eATATATy acrat ag afafaathca fear g fae afe arome afeard fratcay sraarfeat Fafess srfaarfrat ar eararara & fafavag & orca ara areal F AAT TT HTT HAT& att a araHrt sfafaay, 1922 ay are 33(1)(at) & ot afafrara st are 15& an-farara 8, cela 8, ardardl ge wea at afaarftar shits (afaq—areealo arteta aaltare GH TATA WAST Brae AeT Tea(!) ate ages faeryATA TSK, ALTA FAA AAT AT FERIA Veit Qi AIST, To Fo Tae RaTTala& fasra ate go am (*)) gat crag ag aeita at oe fa oifaa farsaafunfar geaey qaiq afsaraat & arfaca al a HA Hl aTAT BRITH MIQIT(water) F qraaz argarfeal Fa Terr sat at ay ae gafay ag set Her.at apart fe gas aaa Fara array F aftaraeaed ara fratea a azTe ot7g ease & fe aeraH aTgaa(ataT)a ee sea Te faare at fear aatisae ana ataiatafeat araat& fagica & acafted atafafraySTU 10-0 cH fareeraras A VS adeqaare F acafeaa & faaar ofewerar afa-ara & arfaea & aaa arga wa wea & fau a ae 31 aifas fossa far. (') [1668] 70 a0 Zo AITto 74. -(*) [1969] 72 argo dhe arte 376. ‘aeat area a oraard afaarnse afaard at mar gg at ag ater 15%‘sates Bfete gata ft ae Ta TH ATT Ta ATT S MA Tat HAT YESUR a MTU 10-G BH TAT FS fae ag za ara al Taeww # far qaeq aay ar ate sa afearfear srea at fae ear afsaraat & arfaea 8 TAAat va ay weerh far aifaa farsa faar.mari) aa: Tet Tet FT GAT‘fasted& fase are usteq F gerFt fear star afar ar| ., 8 whet ane aat Fate as afar aye at add Fi Dat meats°SAT UraeT H Ter A far oa F 1 CH Yaarge ay Gla HAT gH TTAZ| .oo,°.aeeaANT ATT BT ay TEI.;ce. oepeeTe.ryee “Ho /fro vn - ;-4j|ok: The High Court then observed that if the Excess Profits Tax Officer was not competent to take proceedings under s. 15 of the Excess Profits Tax Act, it was not open to him to apply the pro-visions of s. 10 in the proceedings upon re-opening the assess-ment under s. 15, for, in the view of the High Court an order under s. IO-A may be passed only where the Excess Profits Tax Officer is seized of juri'sdiction in a petnding assessment proceed-ing. As the proceedings initiated by the Excess Profits Tax Officer under s. 15 were void, he had no power to make an order under s. 10-A of the Act. The High Court accordingly answered the sccMd question also in the negative. Against the order passed by the High Court, these two appeals are preferred. A parallel proceedin~ which had come before this Courf in Civil Appeals Nos. 741-743 of 1966 Gurbu.r Rai Harbux Rai v. The Commissioner of Income-tax, U.P. decided on AuQust 2, 1968 may also be referred to. It may be recalled that the Excess A Profits Tax Officer at Kanpur had served a notice under s. 10-A of the Excess Profits Tax Act requiring the assessee to show cause why appropriate adjustments as respects liability to excess profits tax should not~e made so as to counteract the avoidance or reduction of liability to excess profits tax by converting the business in the name of Pussulal Jangalal-the Farrukhabad firm B -into a separate business. The contention of the assessee that the! disruption of the family was a genuine and bona fide tran-saction was rejected by the Excess Profits Tax Officer. The case was then taken to the Income-tax Appellate Tribunal. The Tribunal confirmed the order of the Excess Profits Tax Officer. But at the instance of the assessee the Tribunal referred the fo]- C lowing question to the High Court of Allahabad : "Whether on the facts and circumstances of this case, the tra.nsaction in question was one which could be avoided under s. 10-A of the Excess Profits Tax Act?" D The High Court by order dated July 31, 1969 answered the question in the affirmative. Against the order passed by the High Court no further proceedings has been taken by the asses-see challengi•ng the conclusion •of the High Court and that order has become final. E The High Court has held in the judgment under appeal that action taken under s. 15 of the Excess Profits Tax Act was not competent and on that account the Excess Profits Tax Officer had no: jurisdiction in the matter. But in the judgment of the High Court in Income-tax Reference No. 118 of 1962 decided on July 31, 1969 no question of jurisdiction arose. The Court had only answered the question whether the 1ransaction of par-F tial partition was one which could be avoided under s. 10-A of the Excess Profits Tax Act. The decision of the High Court (which had become final) about the authority of the Excess Profits Tax Offio~r to take action taken under s. 10-A does not affect the maintainability of the present appeal. Section 10-A of >the Excess Profits Tax Act, insofar as it i& relevant, provides : " ( 1 ) Where the Excess Profits Tax Officer is of opinion that the main purpose for which any transac-tion . . was . . effect-ed . was the avoidance or reduc-tion of liability to excess profits tax, he may, . . . make such adjustments as respects liability to excess profits tax as he considers appropriate so as to counter- act the avoidance or reduction of liability to excess profits tax which would otherwise be effected by the transaction . Section 15, insofar as it is relevant provides : "If i;n consequence of definite information which has come into his possession, the Excess Profits Tax Officer discovers that profits of any chargeable account-ing period chargeable to excess profits tax have escaped assessment, or have been under-assessed, or have been the subject of excessive relief, he may at any time serve on the person liable to such tax a notice containing all or any of the requirements which may be included in a notice under section l 3. and may proceed to assess or reassess the amount of such profits liable to excess