TaxTMI 
TaxTMI 
1956 (10) TMI 38
X X X X Extracts X X X X
X X X X Extracts X X X X
....f 1949 on the file of the Subordinate Judge, Madurai?, 2. The question raised by this reference is whether a Hindu undivided family, which is the assessee was the owner of certain house property, so as to render it liable to be assessed on the income thereof under Section 9, Income-tax Act, A subsidiary question that is raised is as regards the propriety or the legality of the reopening of the assessment under Section 34 of the Act. The Hindu undivided family which is the assessee owned considerable properties which consisted among others, of certain houses, the income from which Is the subject-matter of the present dispute. Besides, it was carrying on a money lending business-sharing the Income from two firms in which it was ft partner. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent were ancestral properties belonging to the joint family. Sundara Rao defended the suit, however, on the ground that the deeds were executed 'bona fide' "in the expectation that the other members of the family would consent to the performance of the charities set out in each. The Subordinate Judge of Madurai decreed the suit on 4-11-1949, holding that the deeds executed by the Karta, first defendant were null and void and not binding on the family properties, and that the plaint properties belonged to the joint family of the plaintiff and the defendants in that suit. When the Income-tax officer was apprised of these proceedings and their result he took action under Section 34 by a notice issued on 10-2-1951. After hearing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... emerged. The deeds were then no longer binding. This was undoubtedly a definite Information which showed that the assessee had been under-assessed. Proceedings taken under Section 34 of the Act were therefore valid, and the answer to the first question is in the affirmative and against the assessee. 5. As regards the second question Mr. Gopalaswami Aiyangar, learned counsel for the assessee urged that an alienation by a father of family property was Only, voidable and not void, and that this necessarily involved that until the persons entitled to avoid the transaction did so a good title inhered in the alienee and that even when the transaction was repudiated the title of the alienee stood till the date of the avoidance. We are unable to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gard such an alienation as perfect unless and until It is set aside." The correctness of this statement of law has been questioned in Mayne's Hindu law by Srinivasa Aiyan-gar 11th Edn. page 508, note b. But even assuming it were correct, it does not really help learned counsel for the assessee, because one has still to consider the legal effect of the avoidance. Stone J. leaves one in no doubt on this point, for he says at page 675 (of ILR Mad) : (at P. 443 of AIR) : "Bearing in mind the fact that it is common place that a transaction of this nature can be perfected by the subsequent consent of the sons and that it can be repudiated and set aside by the subsequent action of the sons and that such repudiation goes back to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he terms of Section 65 of the Contract Act, which provides that 'when a contract becomes void' -- and their Lordships would have no difficulty in holding these words sufficient to cover the case of a voidable contract which had been avoided --any person who has received any advantage under such contract is bound to restore it to the person from whom he received it or make compensation therefor." 7. We consider that the principle enunciated would equally apply to cases of every voidable transaction. But as we said earlier, it is unnecessary to decide whether in every case an avoiding coparcener would be entitled to mesne profits for the full period allowed under the law of limitation or whether equitable considerations would de....