Escaped assessment of Hindu undivided family income can be reopened despite prior assessment of members, with adjustment to avoid double taxation.

A Hindu undivided family is a separate assessable entity under the Indian Income-tax Act, 1922, and escaped family income can be reopened under section 34 against the karta if the statutory conditions are met. Prior assessment of the same income in the hands of individual members does not bar reassessment of the family, because the Act requires assessment of the correct person and allows consequential adjustment where tax has already been collected from the wrong persons. The principle against double taxation does not prevent reopening in these circumstances, provided duplicate taxation is avoided through appropriate adjustment.

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Issues: Whether, where the income of a Hindu undivided family had allegedly escaped assessment, proceedings under section 34 of the Indian Income-tax Act, 1922 could be initiated against the karta even though the same income had earlier been assessed in the hands of the individual members, and whether such prior individual assessments barred reassessment of the family income.

Analysis: A Hindu undivided family is a distinct unit of assessment and a "person" within the meaning of the Act. If such a family has escaped assessment, section 34 authorises the Income-tax Officer to reopen the matter against that assessable entity, subject to the statutory conditions. The earlier assessment of the same income in the hands of individual members does not create a legal bar where the family itself was not properly assessed; the supposed conflict is resolved not by denying jurisdiction under section 34 but by making appropriate tax adjustments if a valid assessment on the family ultimately results. The Court also held that the principle against double taxation does not prevent the reopening, since the Act contemplates assessment of the correct assessable entity and permits consequential adjustment to prevent taxation of the same income twice.

Conclusion: Section 34 could validly be invoked against the karta of the Hindu undivided family, and the High Court was wrong in quashing the notice on the ground of double taxation.

Final Conclusion: The reopening power under section 34 was upheld for escaped family income, while any prior tax collected from the wrong persons had to be adjusted against the correct family assessment.

Ratio Decidendi: Section 34 may be used to assess income that has escaped assessment in the hands of the correct assessable entity, even if the same income was earlier assessed in the hands of another person, and prior mistaken collection must be adjusted to avoid taxing the same income twice.

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