Law: Income Tax Act, 1922

Section: 25A

Law: Income Tax Act, 1922

Section: 25A

Section 147, read with section 171, of the Income-tax Act, 1961 [Corresponding to section 34, read with section 25A, of the Indian Income-tax Act, 1922) and Merged States (Taxation Concession) Order, 1949 - Income escaping assessment - General - Assessment year 1949-50 - Whether where a partition is pleaded by assessee HUF, onus of proof of such partition would lie on assessee - Held yes - Whether even where there is physical partition but if no claim of partition is made at the time of making assessments, and no order is recorded under section 25A(1), family must be deemed to continue to be an undivided family - Held, yes Assessee-HUF was carrying on business in Native State of Raigarh - ITO completed assessment for assessment year in question determining certain loss - Later on, ITO came to know that two sons of Karta of assessee-HUF, carried on business at Calcutta and Bangalore and income from these business was not included which escaped assessment - Whether since on 1-4-1949, State of Raigarh merged with Central Province, 1922 Act was applicable to Raigarh in assessment year 1949-50 - Held, yes - Whether, therefore, income from two businesses started by two sons was rightly included in total income of assessee-HUF - Held, yes FACTS The assessee-HUF was carrying on the business in the native State of Raigarh. B was the karta of the assessee, who had two sons S and R. For the assessment year 1949-50, the assessment of the assessee was completed determining certain loss in the Raigarh State business only. Any income, outside the taxable territory, so to speak, was not included in the said assessment order. Assessment was made without considering whether the assessee had any foreign income or not. Thereafter, on the information that S, the eldest son, was doing business at Calcutta and R, the other son, was doing business at Bangalore in the State of Mysore, the ITO started an enquiry. A notice under section 34(1)(b) of the 1922 Act was issued and the same was served alongwith a notice under section 22(2) of the 1922 Act. In pursuance to the aforesaid notice the assessee filed a revised return declaring certain loss. In the revise return, neither the incomes…

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