HUF notice and assessment valid against person in actual control and management, even if under age of majority.

Service of a notice under section 34 to the 17-year-old eldest male member of a Hindu undivided family was treated as valid because section 63 was applied by reference to sufficient discretion and actual control, not the Indian Majority Act; the notice was therefore effective. A return filed by him as karta was also held valid where he was in de facto management of the family income and was the only practical person able to make the return. On the same footing, he could represent the family in assessment proceedings, and the assessment proceeded validly against the person actually managing the income.

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Issues: (i) Whether service of notice under section 34 of the Income-tax Act on an 17-year-old eldest male member of a Hindu undivided family was valid service on an adult male member within section 63; (ii) whether the return filed by that member as karta of the family was legal and valid; (iii) whether the member could validly represent the Hindu undivided family during the assessment proceedings.

Issue (i): Whether service of notice under section 34 of the Income-tax Act on an 17-year-old eldest male member of a Hindu undivided family was valid service on an adult male member within section 63.

Analysis: The expression "adult" in section 63 was treated as not controlled by the Indian Majority Act, 1875. The determining test was whether the person had attained sufficient discretion to understand and comply with the notice. On the facts, the member was the eldest male member, was managing the family affairs, and in fact complied with the notice by filing a return.

Conclusion: Service of notice was valid and the issue was answered in favour of the Revenue.

Issue (ii): Whether the return filed by that member as karta of the family was legal and valid.

Analysis: The validity of the return depended on whether the person who filed it was in actual receipt, control, and management of the family income. Even assuming that minority under the Indian Majority Act affected his capacity to be karta in law, the facts showed that he was in de facto control of the family affairs and was the only person who could practically make the return for the family. The charging provisions of the Income-tax Act required that income chargeable to tax not be left untaxed merely because no adult karta existed.

Conclusion: The return was legal and valid and the issue was answered in favour of the Revenue.

Issue (iii): Whether that member could validly represent the Hindu undivided family during the assessment proceedings.

Analysis: In view of the valid service of notice and the valid return filed by the person actually managing the family income, the assessment proceedings could properly proceed against him as the person in control and management of the income. The answer did not require a separate determination of his strict legal status as karta under the Indian Majority Act.

Conclusion: He could validly represent the family during the assessment proceedings and the issue was answered in favour of the Revenue.

Final Conclusion: The references were resolved against the assessee and the assessment made on the basis of the notice and return was upheld.

Ratio Decidendi: For income-tax purposes, notice and assessment in relation to a Hindu undivided family may validly proceed against the person who is in actual control and management of the family income and has sufficient discretion to respond, even if that person has not attained majority under the Indian Majority Act.

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