TaxTMI 
TaxTMI 
1938 (5) TMI 16
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....ble to a part or the whole of that year - had to be assessed in the manner laid down in Section 25A(2); or whether, in view of the succession to the business of the assessee - an erstwhile Hindu undivided family - by a partnership firm consisting exclusively of the members of the family, the assessment had to be made in the manner laid down in Section 26(2)". The facts may be briefly stated. The assessment year in question is 1933-34 and the accounting year is the Sambat year 1989 ending roughly with the financial year 1932-33. The assessees Messrs. Jugal Kishore Mukat Lal of Khurja were assessed up to the assessment year 1932-33 as a joint Hindu family. The assessment for the year 1933-34 was made by the Income tax Officer on ....
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....multaneously in the course of the assessment in dispute and were present before the Income-tax Officer at the time of making it. If it is held that in such circumstances the provisions of Sec. 25-A(2) have been eclipsed by those of Sec. 26(2), I have no hesitation in accepting the contention that the emergent firm whose existence has not been disputed should have been registered under sec. 26-A...... If the assessee is successful and the High Court holds that in the simultaneous application of Secs. 25-A and 26(2) the assessment must be made in the manner laid down in the latter section, that is to say, that it must be made on the footing that a succession had occurred, then the assessee would be entitled and I should be prepared to order a....
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.... a firm has come into existence, the assessment must proceed on the basis of Sec. 26. It may be mentioned that in the course of the assessment for the year 1934-35 the assessee was assessed as a genuine firm on the 24th January 1935, although the firm had come into existence sometime in April 1933, as found by the learned Commissioner in the present case. The learned Commissioner had before him the authority of a Bench of the Lahore High Court in the case of Beli Ram and Brothers, Lahore v. Commissioner of Income-tax, Punjab, N.W.F. and Delhi Provinces, where it was held, "Where on the breaking of a joint family the separated members immediately from themselves into a firm, Sec. 26 will come into operation and the assessment on the firm ....
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....out that the mere fact that in the previous Lahore case only some of the members of the joint Hindu family had continued the business on contractual basis while in the case before them all the former members of the family have constituted themselves as a firm on contractual basis makes no difference whatsoever, because the business which was carried on by a joint family is now continued by a firm which has been newly constituted. The matter came up for decision again before the Lahore High Court in Ram Rakha Mal & Sons Ltd., Amritsar v. Commissioner of Income-tax, Lahore, and a Bench of that Court reiterated the view held by that Court in the former two cases and observed that Section 25-A of the Indian Income-Tax Act "applies onl....