Law:

Section:

JUDGMENT In compliance with the order of this Court the Income-tax Appellate Tribunal (hereinafter called the Tribunal) has stated the case. 2. The questions of law on which the Tribunal was directed to state the case are as follows: "(i)Whether under the facts and circumstances of the case, the Buldana District Main Cloth Importers' Group constituted an 'association of persons' within the meaning of section 4 of the Income-tax Act, 1922, and was liable to be assessed to income-tax and excess profits tax in that status ? (ii)Whether each member of the Group should have been assessed on the income derived by him as a member of the Group? (iii)If the answer to the first question is in the affirmative, whether the various groups did not constitute independent 'association of persons' liable to be assessed separately? (iv)Whether the notice under section 22(2) of the Act served on Haji Ahmed Haji Ali was a valid notice to the assessee ? (v)Whether the assessment proceedings were in accordance with law?" 3. Facts relevant for purposes of this case are as follows. The Income-tax Officer, Khamgaon, issued a notice under sub-section (2) of section 22 of the Indian Income-tax Act, 1922 (hereinafter called the Act), on 12th March, 1947, against the assessee (Buldana District Main Cloth Importers' Group, Khamgaon) to submit a return of the income for the assessment year 1946-47. The notice was served on Haji Ahmad Haji Ali, a member of the aforesaid group. On 15th April, 1947, one Shakoor Bhai, agent of Haji Ahmad Haji Ali, sent a letter to the Income-tax Officer, Khamgaon, expressing inability to furnish the return of the total income on the ground that there was no privity of contract between the parties described as the Buldana District Main Cloth Importers' Group. As no return was filed, a notice under sub-section (4) of section 22 was issued and in response thereof account books were produced before the Income-tax Officer. It was found that the profits made by Haji Ahmad Haji Ali and one Harjiwan Kuwarji in the months of February, March and April, 1945, were Rs. 15,093 and were payable as under: (1) Harjiwan Kuwarji ... Rs. 5,304 (2) Haji Ahmad Haji Ali ... Rs. 9,789…

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