Residence of a Hindu undivided family depends on the actual, continuing seat of control and management in the relevant year.

Residence of a Hindu undivided family under Section 4-A(b) of the Income-tax Act, 1922 depends on the actual seat of control and management of its affairs during the relevant accounting year, with some degree of permanence. Mere presence of the karta, occasional visits to British India, or isolated acts connected with litigation or tax matters are insufficient to show that control was exercised in British India. Prior assessments or later findings cannot replace proof of actual control in the year in question. On the facts, the family was not shown to have its control and management in British India, so residence there was not established.

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Issues: Whether a Hindu undivided family was resident in British India under Section 4-A(b) of the Income-tax Act, 1922, on the ground that its control and management of affairs was not wholly outside British India.

Analysis: Section 4-A(b), inserted by Section 5 of the Income-tax Amendment Act, 1939, makes residence depend on where the control and management of the family affairs was actually exercised during the accounting period. The decisive test is the factual seat of control and direction, with some degree of permanence, and not the mere presence of the karta, occasional visits to British India, or stray acts connected with litigation or tax matters. Previous years' assessments and later year findings cannot substitute for proof of actual control and management in the relevant accounting year.

Conclusion: The family was not shown to have its control and management situated in British India during the relevant year, and the reference was answered in the negative in favour of the assessee.

Final Conclusion: Residence under Section 4-A(b) turns on the actual, continuing seat of control and management in the relevant year, and casual or intermittent activities in British India do not establish residence there.

Ratio Decidendi: For a Hindu undivided family to be resident in British India under Section 4-A(b), there must be actual control and management of its affairs exercised in British India during the relevant accounting period with some degree of permanence; occasional visits or isolated acts are insufficient.

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