TaxTMI 
TaxTMI 
1936 (11) TMI 29
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....tion 26 in respect of business which was carried on by the family in the "previous year ?" (2) If the partnership be so chargeable, are the shares of the partners to be included in the assessment upon the family under Section 25-A(2) ? Messrs. Mittar Chand Lakhmi Dass of Rawalpindi contested their assessment for the year 1935-36 which had been made by the Income Tax Officer on the basis of their income during the accounting period from April 13, 1934 to the April 13, 1935. It a ppears that Mitter Chand and his three sons, Lakhmi Das, Mangal Sain and Chanan Mal, constituted a Hindu undivided family and carried on business as Produce Merchants in the name of Mitter Chand Lakhmi Dass. They also owned a family residential house. The....
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....ndu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income Tax Officer shall make such inquiry thereinto as he may think fit, and if he is satisfied that a separation of the members of the family has taken place and that the joint family property has been partitioner among the various members or groups of members in definite portions, he shall record an order to that effect. Provided that no such order shall be recorded until notices of the inquiry have been served on all the members of the family. (2) Where such an order has been passed, the Income Tax Officer shall make an assessment of the total income received by or on behalf of the joint family as such, as of no separat....
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....he assessment shall be made on such person succeeding, as if he had been carrying on the business, profession or vocation throughout the previous year, and as if he had received the whole of the profits for that year." Section 25-A and 26 in their present form were enacted in 1928. Previously there was no section corresponding to the Section 25-A but Section 26 read as follows :- "Where any change occurs in the constitution of a firm or where any person has succeeded to any business, profession or vocation the assessment shall be made on the firm as constituted, or on the person engaged in the business, profession or vocation as the case may be, at the time of the making of the assessment." It is conceded at the bar that this....
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....erely to a firm which has been newly constitued and has not succeeded to any business which was previously carried on by any other person then legally no assessment canbe made on it in advance because there is no accounting period the income whereof can be taken as a guide for the assessment. In the case of an entirely new business started by a newly constituted firm, no assessment, it is conceded, can be made during the first year. It is during the second year that an assessment can be made on the basis of the income of the first year. Section 26, therefore, applies to the case of a business which was done during the previous year but which has been continued during the year of assessment by different persons. Sub-section (1) applies to fi....