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Issues: Whether the Commissioner was justified in invoking suo motu revision to treat the assessees as an association of persons and to withdraw composition benefits under the Tamil Nadu Agricultural Income-tax Act, 1955.
Analysis: The assessees had been separately assessed for several years after a partition deed divided the estate among them, and the composition applications were allowed on the basis of separate holdings and individual enjoyment. The later revision rested mainly on a subsequent inspection report suggesting common management and absence of physical sub-division. The Court held that common management by itself does not establish an association of persons. What is material is whether the properties were in fact divided, separately enjoyed, and accounted for individually. The Commissioner's finding that profits were shared in common was unsupported by material and ignored the partition deed, separate bank accounts, separate check rolls, individual treatment by other departments, and separate assessments already accepted by the revenue.
Conclusion: The revision was not justified, the assessees could not be treated as an association of persons, and the composition orders under section 65 could not be disturbed. The questions of law were answered in favour of the assessees.
Ratio Decidendi: Common management of separately partitioned and separately enjoyed agricultural properties does not, without supporting material showing a voluntary combination to earn income, constitute an association of persons.
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