Law: Income Tax Act, 1922

Section: 4

Section 226, read with section 5 of the Income-tax Act, 1961 (Corresponding to section 46, read with section 4, of the Indian Income-tax Act, 1922) - Collection and recovery - Other modes of recovery - Assessment years 1944-45 to 1947-48 - P, who was carrying on business in hardware and had acquired a number of properties, died in 1937 and after his death his sons started other businesses and business carried on by P was also continued - Income from all business was assessed by income-tax authorities as joint family businesses though it was contended that business started after death of P were not joint family businesses - Certain arrears of tax, so assessed, were to be realised for which income-tax authorities took steps to attach and bring to sale suit properties - A suit was filed in 1956 for declaration that suit properties could not be sold for realisation of arrears of income-tax - Earlier in 1948 a suit was filed by minors against their major brothers for partition of joint family estate and by a decree certain properties, were allotted to minor plaintiffs - In addition to this Rs. 4,000 was directed to be provided for marriage expenses of one of minors for which a charge was created on certain suit properties - In suit filed in 1946, against which instant appeal arose, subordinate Judge held that businesses, profits of which were taxed by income-tax authorities, were joint family businesses - Whether subordinate Judge was justified in so holding and, therefore, appellants could not escape liability for paying taxes due on profits of such business - Held, yes - Whether mere fact that a partition was effected in pursuance of preliminary decree in suit would not affect question of liability of properties in suit for tax arrears - Held, yes Section 67, read with section 25A, of the Indian Income-tax Act, 1922 - Bar of suits in Civil Court - Assessment years 1944-45 to 1947-48 - Whether, an facts stated under heading "collection and recovery - Other modes of recovery", section 67 was a bar to maintainability of suit, even though declaration asked for did not in terms refer to cancellation of assessment made by tax authorities - Held, yes FACTS The appellants…

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