Penalty on disrupted Hindu family members barred absent express statutory machinery for penalty proceedings under the Income-tax Act, 1922.

A disrupted Hindu undivided family that had ceased to exist before penalty proceedings were initiated could not have penalty imposed on its members under section 28 of the Income-tax Act, 1922. Section 25A supplied machinery for assessment and collection of tax on a partitioned family and made members jointly and severally liable for the assessed tax, but it did not authorise penalty proceedings against them after disruption. Because section 28 applied only to a "person" committing the specified defaults and no express statutory machinery extended that liability to former members of a divided family, penalty could not be inferred by construction.

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Issues: Whether penalty under section 28 of the Income-tax Act, 1922 could be imposed on the members of a Hindu undivided family after the family had been partitioned and had ceased to exist as an assessee.

Analysis: Section 25A provided machinery for assessment and collection of tax in the case of a disrupted Hindu family and made the members jointly and severally liable for the tax assessed on the total income of the family. It did not, however, contain any machinery authorising the imposition of penalty on the members of a divided family. Section 28 empowered penalty only against a "person" committing the specified defaults, and although a Hindu undivided family was a "person" while undivided, that character ceased after disruption before penalty proceedings were invoked. In the absence of express machinery, the liability to penalty could not be inferred or supplied by construction.

Conclusion: Penalty under section 28 could not be imposed on the members of the disrupted Hindu family. The answer to the reference was in the negative, in favour of the assessee.

Ratio Decidendi: Where a Hindu undivided family has ceased to exist before penalty proceedings are initiated, section 25A does not supply the machinery to impose penalty on its members, and penalty under section 28 cannot be levied in the absence of express statutory authority.

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