Representative assessment of minor income under section 40 cannot create a Hindu undivided family status for guardians.

Section 40 of the Income-tax Act, 1922 fastens liability on a guardian only in a representative capacity, co-extensive with the minor's own liability, and does not create a new taxable status. Because the income belonged separately to two minor beneficiaries and separate accounts were maintained for each, the guardians could not be assessed as a Hindu undivided family merely because they managed the business jointly. Assessment had to be confined to each minor's separate share, and the reference was answered in favour of the assessees.

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Issues: Whether the guardians of two minor beneficiaries could be assessed on the minors' income as a Hindu undivided family, or whether section 40 of the Income-tax Act required assessment only in respect of the separate shares of the two minors.

Analysis: Section 40 is a machinery provision that fastens liability on a guardian only in a representative capacity, co-extensive with the liability of the minor beneficiary. It does not create a new taxable status in the hands of the guardian. The income received by the guardians belonged to the two minors separately, and separate accounts were maintained for each minor. The fact that the business continued as a single unit and that the guardians acted jointly did not convert the minors into a Hindu undivided family for assessment purposes under section 40.

Conclusion: The guardians could not be assessed as a Hindu undivided family; they were liable only in respect of the separate income of each minor. The question was answered in the negative, in favour of the assessees.

Final Conclusion: The reference was decided against the Revenue and the assessee's position that the guardians were assessable only for the minors' separate shares was accepted.

Ratio Decidendi: Section 40 of the Income-tax Act, 1922 imposes only representative, co-extensive liability on a guardian for a minor's income and does not permit assessment of the guardian in a different substantive status such as a Hindu undivided family.

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