Commissioner of Income-Tax, Assam v. Nandlal Aggarwal & Anr., Supreme Court of India, Civil Appeal No. 820 of 1964, decided November 17, 1965 (K. Subba Rao, J. C. Shah and S. M. Sikri, JJ.; judgment delivered by Sikri, J.). Appeal under a certificate granted under s. 66A(2) of the Indian Income Tax Act, 1922 against the judgment of the Assam High Court dated July 4, 1961 in Income-tax Reference No. 1 of 1961, answering in the negative the question whether the Tribunal was justified in assessing the income of the minors in the hands of the guardians as the income of a Hindu undivided family. Kishanlal Agarwalla, a Mitakshara Hindu assessed individually on the business of Shri Krishan Rice Mills, Tezpur, died intestate in December 1950 leaving his widow and two minor sons, Basanta and Ashok; the Sub-Judge, Nowgong, appointed Dwarka Prasad Agarwalla and Nandlal Agarwalla guardians (December 15, 1953); for AY 1954-55 the guardians filed a return in the status of a Joint Hindu Family and were assessed under s. 23(3) read with s. 41; the Appellate Assistant Commissioner directed two separate individual assessments; the Tribunal restored the Income Tax Officer's assessment with the status described as H.U.F. HELD (appeal allowed; question answered in the affirmative): where a guardian carries on business on behalf of minors and receives income on their behalf, s. 40 of the Act must be applied, and the guardians have to be assessed treating the minors as constituting a H.U.F. On the father's death the widow and the two minor sons constituted a joint Hindu family and the business was joint family property, remaining so till positive partition; the December 15, 1953 appointment order did not effect partition, the Guardianship Act court having no jurisdiction to partition joint Hindu family property and the order containing no words warranting such a finding; the March 25, 1958 order allowing separate accounts came after the assessment year and the Income Tax Officer's order and had no application to AY 1953-54. Whether a guardian could be appointed in respect of the undivided interest of minors was left open; the appointment was proceeded on as valid. Saifudin Alimohamed v. CIT, 25 I.T.R. 237 (explained); CIT v. Balwantrai Jethalal Vaidya, 34 I.T.R. 187 (followed/approved); Bindaji Lusuman Triputikar v. Mathurabai, I.L.R. 30 Bombay 152 (referred).
