Law: Income Tax Act, 1922

Section: 16(3), 33(4), (5), (6), 35(5), 66(5)

Income-tax-Firm-Registration-Claim for registration upheld by High Court - Tribunal directing "all modifications conse quential to the grant of registration" in the assessment of partners-- Inclusion of income of wife and minor sons in income of partners - Legality - Indian Income-tax Act, 1922, Ss. 16(3), 33(4), (5), (6), 35(5) & 66(5). The assessee together with his wife and a major son constituted a partnership, his two other minor sons having been admitted to the benefits thereof. The question of granting registration to the firm was ultimately decided in favour of the assessee by the High Court. The Tribunal under section 66(5), rejecting the prayer of the department for a direction to include in the hands of the assessee the income of his wife and minor sons, directed that the firm should be registered and all modifica tions consequential thereto might be made in the hands of the partners. While carrying out this direction, the Income-tax Officer included in the assessee's assessment, the share income of his wife and two minor sons under section 16(3) of the Income tax Act, 1922, relying upon the Tribunal's order under section 66(5) as also on section 35(5). The revision to the Commissioner was dismissed on the ground that the order of the Tribunal under section 66(5) would cover all the modifications necessary in the hands of the partners and even otherwise for purposes of section 35(5), the starting point of limitation would be the final order of the Tribunal under section 66(5). The assessee applied to the High Court for a writ: Held, (i) in view of the rejection by the Tribunal of the specific request of the department for a direction to include in the assessment of the assessee, the income of his wife and minor sons, the Tribunal could not have intended in its order that the Officer should include those incomes in the assessee's hands by way of consequential modifications ; and (ii) the inclusion of income under section 16(3) in the assessee's assessment is by no means a consequence of registration as registration or no registration, the income under section 16(3) could be included in the assessee's assessment though…