1!)0

.BHAGWAN DAS SITA RAM

-,_v.

.,.-. - . o COMMISSIONER OF INCOME-TAX

. I March15, 1984

t. . . [V.:0. TuLZAPURKAR AND SABYASACHl MUKHARJI, JJ.)

- }

~)- IncOme-taX Act, '1922..:._s. 22 and s. 23 read with second provi'so to s~S. :c: ·

(6) cf S. 34....--/nterpretation of-When assessnient can be made after a period of four years from asstssmen.t >; ear-Assessment proceedings commenc~ by.filing of. voluntary return-.On expiry -'of four years proceedings are suspended but proceedingsan4 {e, turrts do not become invalid. Bar of limitation lifts in case of direction TribizQ/~When Ond on whom Tribunal can issue direction. ,._ •.

Words and Phrases-"anyperson" in econd proviso to sub-s. (3) ofs. 34- D Scope of must be a Person wl:zo would be liable lo be assessed for whole or part of income that went into assessment of the year under appeal.

A bigger Hindu undivided family (HUF) had flied income-tax returns for the assessment years 1946-47 to 1949-50. When the assessment was being done the bigger (HtTF) made a claim under s. 25A of the Income Tax Act, 1922, that the said HUF. was paititioned on 19.5.1945. While this claim was pending, the appe11ant along with a smailer HUF (hereinafter re; ferred to as the assessee) which had come into being on pa.rtition of the bigger HUF, filed voluntary returns on 18.\l.1950for the assessment years 1946-47 to 1949-50unders. 22(1) of the Act. The bigger HUF's claim partition, Which was rejected by the Income Tax Officer arid the Appellate Assistant Commissioner, was accepted by the Appellate Triunal ori 31,8.1954. While disposing of the. appeals of the bigger HUF against the assessment orders, the Tribunal gave a direction on 28.10.1954 that asscssriullts be made on the bigger HUF after accepting partition. 'After thC claim of partition was accepted the Income-tax Officer sent notices to the assesseei fOr initiating proceedings against him under s. 34(1) (b).- Jn response to the notices the assi!.see filed fresh returns on 12.4.1955- Rejecting the contention of the assessee that the time for making assessment under s. 34 had expiied, the Income-tax Officer completed asseSsmentsunder s. 2~(3) read with s. 34 on

~ .8.9.1955. The assessee's appeal was rejected by the Appellate Assistant Commissioner and the Appellate Tribunal. The assessee filed a writ petition in the High Court_ which was allowed and the assessment orders were quashed on 30.3.1960. The High Court observed that as voluntary returns filed by the assessee were pending no proceeding could be taken undr s. 34. Thereafter the Revenue attempted to assess the assessee on the basis of voluntary returns originaJly filed on 18.11.1950 by relying upon the order of the Tribunal dated 23.10.1954 in the bigger HUF's case and invoking second proviso to s. 34(3). The assessee filed a writ petition and that was dismissed. The Income-tax Officer completed assess

mt undeu, ~3) 9!' p, 19\it In appeal the Appellate ista)lt <;:omllli''

• •

. -

• • • BHAGWAN DAS v. c.fr. (S. Mukhrji, j.) ioi

sioner held that no valid assessment could be made on 31..S:.1962 and this viey.:· w:is confirmd by the Appellate Tribunal. A ref.:rence was made to the High Court all the questioll whether on the facts and -cfrculnstanCes of the case, valid · assesrnent'.could be made" on 31.5.1962 for the assfi'isment ye3.rs 1948-49 and,-. 1949 50 on the basis of voluntary return.s of income filed under s. 22(1) of the Act. The assessee contended that-since 3. return exhausted itself fter expiry of four years from the end of the asseSsment year to \\hich it reIJ.ted, no assessmCnt could made an th~ ba~ of voluntary return, , it,"could be done under s. 34 only if :2nd prOviso to sub-s. (3) of s. 34 applied. By majority a full Bench of the High Court answered the question in the affirmativ.! in favour of the reve .. nue. Hence. these appeals. -The two questioi:is which arose" Were! (I) whether the assessment could be made under s. '23(3) on the basis of voluntary returns filed or actioil should have been taken under!. 34 with the help of the seCond proviso - to Sub-s~ (3) of s. 34; and (2) whether ihe Tribunal cOuld give a finding or

dirctioi:i in respect of the asessee.. ' ·

. -Dismissing tt:e_ appeals;

HEW:··

.f!n QuestoitNo. (I)

- The High Court was right . in taking the vie~ hat assesments could be m<idi! on the basis of voIU"iitary returns alrCady filed by_ the asse.ssee.

Sub--s~ (3) of S. 34 provides a p-eriod Or limitation O:f four years for a~Sessment.under s. 23 . of the Act.' If the assessment proceedings _ cpmmenCe .b-y filing or' ""votuntarY returns, as Indeed _these do, on the expiry :of the periOd of four years from the · Cod of the Year in Which ihe income, "profits or giins Were first assess.able, such proceedings are susPended .Jr inierrupte+f. But neither the Proceedings nor the returns_ beCome-. invalid. Since the order Was _passed bY the Tribunal giVing direction, the. bar of limitatiori provided by s. 34(3) was lifted and the assess--·

ments could be made without any_ bar of limitation. [106 G-H, 107 'A] . . . ' . i

-- Commissionf!r of Income-tax Bombay City II v. Ranchhoddass Karsondtls, 36 .. J.T.R. 569,· Estat'e Of the iate A.M.K.Af. Karuppan Chettiar v.· Co"1missioner of

Income-ta~,"Marlras, 72 1.T.R. 403 ; and, Commissioner_-· of Income-tax Madras

v. M.K.K.R. Muthukaruppan Chettiar, 18 I.T.R~ 69, refe_rred t~

On Question.No. (1)_:

. ' . . c

' /__ - - . ,:.·...;, The High Cotirt rightly answered thC question in favour of 'he revenue on G the view that the Tribunal was competent to give the direction in respec(ofthe· present assessee. [108 E-G I

Second proviso. to s. 34(3) 3.uthories dirctionS _to be given by the T ribunat iO respect of the assessee of any person beyOnd follr years 3sprovided iri. s. 34(3) _of the Act: As explained in Income-tax. Officer v. Murlidhar Bhagwandas, ,"a"itj person" in respect of whom such direction could be given must_ be one who 'wOutd be liable, to be assessed, for the' whole or a \?art of the-income tat went into the assessment of the yea~ under api)eat o_r reVision. , The court must tum -

.....

. .

io2, fopame coliar aeP~Ris tI9s4j 3 s.c.i

to s. 31 of the Act to ascertain who is that person otver than the appealing assessee wbo might be affected by the orders passed by the appellate authority, .Modification or setting "aside of assessment made on a firm, joint Hindu-family, association of persons for a particular year may affect the assessinent for the said year on a' partner ot partner&. of, the firm, member of members of such Hilldu undivided family or the individual, as the case might be. These instances_ are

only illustrative and not exhaustive. The expression ''any .person" in 'its widest amplitude might take in any person connected or not with the assessee, whose .

ioce:me fat any yar bad escaped assessment; but "this Constru9tio, n cannOt be accepted, for the said expression was necessarily circumscribed by the scope Qf the subject-matter of the appeal or revision, as the case might be. $0 therefore the.person mu•i be one who would be liable lo 'be aJSeJsed for the whole .or any , part-of the ittcOme that wentnto a$sess1nent of the year under apfleal or revbion

(llmphasjs supplied). Therefore, "any person" in sub-section ~(3) of s. 34 must be confined to person intimately connected in the aforesaid sense with the assessments of the yearS under appeal. ]701 C-S, 108 A-FJ

Income-tax Officer, A-Ward, Sitapur v. Mur/idhar BhagWan Das, 52 I.T.R. 335; Rajinder Nath v. Comminioner of lncome-1ax, Delhi, 120 I.T.R. 14 ; • Commissioner of Income--tax, <; entral, Calcutta v. National Taj Traders. 121 I.T.R. 535; and Commissioner of Income-tax, A.Jl(Jhra Pradesh v. Vadde Pullaiah & Co., 89 J.T.R. 240, referred IO. ,

 'The f11cL• in the instant case show that income can belong either to the biwr Hindu undivided family or to the smaller Hindu undivided family, the present assessee alongwith another smaller H.U.F. Snd to no one else~ There~. !bro a finding that it belongs or it does not belong to the bigger Hindu undivided famiiy which bad disrupted on partition would determine the issue whether it .

cold bO taxed fa the hands Of the present assessee. Judged in the light of the test laid down in Murlidhar BhagwOn Das casearid as pointed Out i~ R.ajinder Nath's case, it appears that the present usessee can be said to be a person who would be liable to be assessed for the whole or part of the income that went to the assessment of the bigger Hindu undivided family io years under appeal and U a Person intimately connected with the as, sessments of the bigger Hindu µn divlde<I ramily; The income in this case cannot be the income of both bigger Hindu Undivided family and the present assessce, it must be either of these two.

Tbererore. the directions given in the appeals filed by the bigger Hindu undivide°d family would be applicable to the present as......,. (111 A-DJ

Comml!siontr" Df l11ome--tax, Gujarat v. Shanti/al Punjabhai, 57 I.T.R. 58. fl di<tinguisbed.

Coinmf3Sldnsr oi lnMme-tax, Punjab, Jammu & Kashmir and HJmac/r4/ Prai., h-v. S. Rtzghubf• Singh Trust, 123 I.T.R: 438 referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1168-6~ . (NT) of 1973.

 Appeal by Special leave from the Judgment and Order dated

., -

. ..,.,

• J.

BHAGWAN DAS v. c.I.T. (S. llfukharji, J.) i03

the 3rd January, 1973 of the Allahabad High Court in I. T: Ref. No. 450 of 1969.

S.C. Manchanda and M. J.P. Ma/ho.tra for the Appellant . •

S.T. Desai, B.B. Ahuja and Miss A. Subhashini for the Respondent .

The Judgment of the Court was delivered by

SABYASACHI MUKHARJI, J. These appeals by certificat~ granted by the High Court of Allahabad under Section 66A(2) of the Indian Income Tax Act, 1922, arise out of judgment delivered and order passed on 3rd 1ltnuary, 1973 by the High Court of Allahabad in Income-tax Reference No. 450 of 1965. The following question of law had been referred to the High Court for consideration under Section 66(1) of the Income-Tax Act, 1922 by the Appellate Tribunal, Allahabad Belich, Allahabad: ·

i. "Whether, on the facts and in fhe circumstances of the case, valid assessments could be made on 31st May, 1962, for the assessment years 1948-49 and 1949·50 on the basis of voluntary returns. of income filed under Section ~2(1) of the Indian Income-Tax Act, 1922 on 18.11'1950?

• The matter came up before a Division Bench of the High Court and a~ there was a previous bench decision of tliat Court in the case of Sool Chand Ram Sewak v. Commissioner of Income-tax, U.P.1 which supported the revenue's case and as the division bench before whom this case came was unable to accept that view, Jhe division ,; bench referred the case to a larger. B.ench. This reference thereafter .

~· came before a Full Bench41:onsisting of'Gulati, H. N. Seth &.C.S.P.

1 '

Singh, JJ. Gulati'and C. S. P. Singh, JJ. answered the question in. the affirmative in fa.vour of the revenue and against the assessee: , Seth J. however, was in favour of assessee. I.n view of. the majority .fue .question was answered in favour of the revenue and in affirmative.

(!) 73 I. T. R. 466. .::

cl.

suPRBMB 'cotiirr REPolltS

. [19S4J 3 S.C.R;

Before we deal'with the questiOn ii) controversy, it will be necessary to note some of the relevant facts. There were originally four appeals for the assessment years 1946-47, 1947-48, 1948-49 and 1949-50. As the appeals for the assessment years 1946-47 and 1947-48 were withdrawn by the revenue, we are ow concerned with appeals for the assessment years 1948•49 and 1949-50. .

The present assessee is a branch of a bigger Hindu undivided

' •

family known as•Nathu Ram Jawahar Lal, Jhansi. .,. -

The bigger Hindu undivided family of M/s Nathu Ram

Jwahar Lal was partitioned on 19th May, 1945, and the present assessee along with anoter smaller H.U.F. came into . existence and the said bigger H.U.F. had ma~~ claim in respect otlthe partition under Section 25A of. he Indin lncome-Tax Act,

1922. While this claim was pending t!le present assessee filed volu.ntary returns under Section 22(1) of the Act'.for thi issessment years

194'6~47 to 1949-50 on 10th November, 1950. The said claim of partition by the bigger H.U.F. was rejected by the Income-tax Officer and also by the ppeilate Assistant Commissioner. The said H. U. F. thereafter, filed appeals to the Appellate Tribunal in respect of the order under claim of partition under Section 25A of 1922 Act which by its order dated 31st August, 1954 accepted tbe claim under Section 25A of 1922 Act, and the Tribunal passed . orders on that basis in the appeals relating to the assessment orders in respect of. the bigger H.U.F. on 28th October, 1954.

The. Income-tax Officer, thereafter, .initiated proceedings under

Setion 34 ofthe Incme, tax Act of 1922 for assessing the small.er H'indu undivided family, the preseµt assessee in view of the fact.that tlie claim for disruption of the bigger H. U. F. had been accepted. by te. Tribunal. The ]Jresent assessee filed fresb rturns of income ori 1_2.4.1955 in response to notices under Sectiou 34 of 1922 Act ..

Th_e-reums originally filed were under Sectin 22( I) and were fild on 18th November, 1950, The. assessee's objection regarding the validity of the assessments being made under Sei:tion 34 on merits as well as on the point that time for .making the assessment under Section 34 had already exP.ired, were rejected by the Income-tu

Officer. He, therefore, completed the. assessments on . 8.9.1955 under Section 23(3) read with Se.ction 34 of the Income-tax Act,

1922. The assessee could not get any decision in his favour either fro in the Appellate Assistant Commissioner or from the .Tribunal and being aggrieved by these orders, filed a Writ Petition; to the High. Court of Allahabad challenging the vlidity of the Appellate

. )

. ,...

.J.

DHAGWAN DAS v. C.I.T. (S, Mukharji, J.) iM

orders. ]he assessee was successful in the Writ and, therefor_e, the appellate orders were quashed by the. High Court. The. revenue

haing failed in its attempt to complete the assessee's assessments under Section 34, made another attempt to assess the assessee on the basis of the voluntary returns originally filed by the assessee on 18.11.1950 by relying upon the order of the Tribunal dated 28.10.1954 and invoking.the provisions of 2nd proviso to Section 311(3).

The said assessments which were completed on 31st May,· 1962 were the subject matters of appeals before the Tribunal.

Tl\j! point before the Tribunar was whether valid assessments could be made for the assessment years under consideration on 31st May, 1962 on the basis l>f the returns filed under Section. ~2(1) of the Act of 1922 on 18th November, 1950. The Appellate Assistant Commissioner by his order held that no valid assessments could bf made ori'3Yst May, 1962. ') ' .,

'11 It appears that on 28th October, 1950, relating to the assessment years 1946-47 to 1949-50 in case of bigger Hi!Jd1! undivided family, M/s Nathu Ram Jawaharlal, Jhansi, order was passed by th~, Tribunal in the appeal relating to the assessments pending before it.

It" should be noted that originally on the basis that the bigger H.U.F. had not been disrupted assessments for these years bad been made and appeals relating to those assessments were pending before tlie"'rribunaL The Tribunal disposed of these appeals by the order dated 28th October, 1954 and the Tribunal in the said order had observed, inter alia, as follows;

"The assessments for . those years were (have) necessarily to be set aside with the direction that fresh assessments should be made, one for the period 19.5.1945 upto which the Hindu undivided family was in existencil and the . others on the component Hindu undiviiled families, namely M/s Jawaharlal Mani Ram and Bhagwan Das Sita Ram."

The Tribunal in the instant appeal out of which the reference was mde to .the High_ Couq and out of which these appeals arise, after d1scussmg the relevant facts and the provisions of law confirmed the' order of the Appellate Assistant Commissioner and dismissed the appeals. As mentioned hereinbefore after the Tribunal had directed

th~- assessm_ets shoul~ be made on the cowponent units of the bigger Hmdu, und!Vlded famdy, afte:_partition was accepted, namely, tpe as$essee and Jawabarlal Mam Ram, the Income-tax Officer instea4

: ;~ c

\<_it D

'; f: p

.. -_,

j II

.B.

106 suPilEME couh REPORTS (!984] 3 s.c.lt

of proceding on the hasis of the voluntary returns already filed by the assessee proceeded to take action under Section 34(1) (bfof the Act of 1922 and completed the assessments for all the four years on Septemper 8,1955. The assessee appealed against these assessments to the Appellate Assistant Commissioner of Income-tax, but before the appeals were taken up for hearing, the assessee moved th~ High Court of Allahabad under Article 226 of the Constitntion. On March 30, 1960, the High Court quashed the assessment orders on the ground that as volnutary returns filed. by . the assessee were pending, no proceeding could be taken under Section 34 of tJle Act,

1922. Theraefter the Income-tax Officer initiated proceedings on the basis of the voluntary returns. The assessee again filed a writ petition. praying for quashing the proceedings on the ground that revenue fould not proceed against it on the basis of the voluntary re.turns. This petition was rejected by the High Court and thereafter the Income-tax Officer proceededlto complete the assessments under

. Section 23(3) and passed assessment orders on 31st May, 1962; in respect of the four years.

The first question, is, whether the assessment could be made Under S.ection 23(3) on the basis of voluntary returns filed or action should have been taken under .Section 34 with the help of the second proviso to sub-section (3) of Section 34. it is well-settled that when a return of income is filed by the assessee voluntarily under Section 22(1) of the Act, 1922, assessment proceedings commence against him and Section 34 does not come into play at all so long as tlie: assessment proceedings remain pending. Bnt it was contended that a return exhausted itself after the expiry of four years from the end of the assessment year to which it related. After the expiry of that period, no assessment was possible on the basis of the voluntary return. In such a case assessment was possible under •Section 34, if the case was covered by the second proviso to Section 34(3).

The High Court was of the opinion that sub-section (3) of Section 34 provides a period of limitation of four years fot assessment under Section 23 of the Act, l 9Z2. If the assessment proceedings commence by filing of voluntary return, as indeed these do, on the expiry of the period of four years from the eud of the year in which the income, profits or gain~ were first assessable, such proceedings are suspended or interrupted. But neither.the proceedings nor the returns become invalid. The High Court referred to the provisions of Section 34(3) and was of'the view that since the order was passed by the Tribunal giving direction,' the bar or limitation was lifted and

....

~.·

BHAGWAN DAS v. c.J.T. (S. Mukharji, i.)

A. the assessments could be made without any bar or limitation. Refe- . rence was made to the decision of this Court in the case of Commissioner of Income-tax Bombay. City l/ v. Ranchhoddass Karsondas,, and in the case of Estate of the late A.M.K.M. Karuppan Chettiar v. Commissioner of Income-tax, Madras' and Commissioner of Income-tax Madras v. M.K. K.R. Muthukaruppan Cheuiar3. 8

The High Court, on the basis of these decisions, was cif the ) view that assessments could be made on the basis of voluntary retl!rns already filed by the assessee. We are of the opinion that the High Court was right.

• The next question is whether it was open to the Tribunal to give a finding or direction in respect of the present assessee. Reliance was.placed on the decision of this Court in Income-tax Officer, A~

Ward, Sitapur v. Murlidhar Bhagwan Das.• There, this tourt after referring to the expression "any pt; rson" in the 2nd proviso of sub section (3) of Section 34 of 1922 Act observed at page 346 of the

rort as follows.

"The expression "any person" in. its widest connotatfon .may take in any person, whether connected r not with the assessee, wh.ose income for any year has escaped assessment; but this construction cannot be accepted, for the said expression is necessarily circumscribed by the . scope of the subject-matter of the appeal or revision, as the case may .be.

That is to say, that person must be one who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. If so construed, we must turn to sect.ion 31 .to ascertain who is that person other than the appealing assessee who can be liable to be assessed for the income of the said assessment year. A combined reading of section 30(1) and Section 31(3) of the Act indicates the cases where persons other than the appealing assessees might be affected by orders passed by the .Appellate CommiSsioner. Modification or setting aside of assessment made on a firm, joint Hindu family, association

(I) 361.lf.R. $69.

(2) ?2 t.T.R. 403.

(3) 78 I.T.R. 69.

(4) 52 l.T.R. 335.

l B

< D

SUPREME COURT REPORTS tJ 984] 3 s.c.lt.

of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, member or members of the Hindu undivided family or the. individual, as the case may be. In such cases though the latter are not co-nomine' parties to the appeal, their assessments depend upon the assessments on the former. The said instances are only illustrative. It is not necessary to pursue the matter further. We would, therefore, hold that the expression "any person" in the setting in which it appears must be confined to a person intimately connected in the aforesaid sense with the assessments of the year under appeal." . . • The High Conrt was of the view that "any person" would include the person who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year . under appeal or revision. In that view of the matter, the majority judgment of the High Court ort this aspect was in' favour of the revenue. Then on the question whether the direction for the assess: ment could. be given in respect of any other year, other than the year in which the partition took place, it was contended that direction could be given only for the assessment year 1946-47. Majority judgment of the High Court found no force in. that contention. As this question arose directly for the assessment years 1948-49 and 1949-50 in respct of which the appeals came before the Tribunal in which the directions ba:d been given, the High Court was of the view that it was necessary for the Tribunal to give a finding with regard to the partition of the family and the ownership of the income in both the appeals. The Tribunal was thus competent to give the . . . direction. In that view ofthe matter, the two learnedjudges of the Allahabad High Court were of the opinion that assessments were valid and answered the question in favour of the revenue. Referring to the said decision which has been mentioned in the majority judg ment, Seth J. however was of the!view that the direction given by the Tribunal in this case did not authorise the assessment on the smaller Hindu undivided family. Seth J. was further of the view that such direction could only have been given in the year in which disruption of the bigger H.U.F. took place. In that view of the matter, Seth J. expressed Clissent as mentioned her.einbefore. We are of the opinion that the majority of the learned judg; es of the High Court Were right. Second proviso to Section 34(3) of the fllC!ian- Income-tax Act, 1922 authorised directions to be given by the Tribunal in respect of the assessee or any person beyond four yars as provided in Section 34(3) of 1922 Act.

BHAGWAN DAS~. C.I.T. (S. Mukharji, J.)

' ' 109

As noted before the expression "any person" in respect of whom such direction could be given was explained by this Court in Income-tax Officer, A Ward Sitapur v.

Murlidhar Bhagwandas (supra). As mentioned iii the passage quoted above . from lhe said decision, if so construed then the Court must turn to Section 31 of 1922 Act to a certain who is that person other thap the appealing assessees might be affected by the orders passed by the appellate authority. Modification o'r setting aside of assessment made on a firm, joint Hindu family, association of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, member or members of such Hindu undivided family or the individual, as the case might be. It was therefore argued that it was only those types of assessees mentioned by this Court in the passage noted above were the 'persons' who could be "any person" other than the appealing assessee who can be said to be liable to .be assessed and in respect of whom direction might be given, otherwise such directions or provision for such direcMons if the provision is so re.ad would be ultra vires article 14 of the Constitution. We must make it clear that this Court had itself made it clear categorically in the passage quoted above that the instances given in the above passage were only illustrative passage nieaningthereby that.the instances were not exhaustive. This Court made it clear that the expression .<•any per son" in its widest amplitude might take in any person connected or not with the assessee, whose incom" for any year had escaped assessment; but this construction could not be accepted, for the said expres sion was necessarily circumscribed by the scope of the subject-matter. of the appeal or revision, as the. case might be. So therefore the person

' ' must be one who would be liable to be assessed for the whole or any part of the income that went into assessment of the year under appeal or revision (Emphasis supplied). Therefore, this Court observed that

any person" in sub-section (3) of Section 34 must be confined to a person intimately connected in the aforesaid sense with the assessments of the years under appeal.

Reference may be made to the decision of this Court in the case of Rajinder Nath v. Commissioner of Income-tax, Delhi, 1 where the I.T.O. treated two buildings as belongillg to a firm comprised of a father and his two major sons as partners and in the assessments on the firm for the assessment years 1955-56 and 1956·57 and he estimated the cost of construction of the buildings at a higher fire t)lan that

11) Ito .IT.R. P 14

c !',

D •

B •

SUPREME COURT REPORTS

(1984] 3 S.C.R,

disclosed and brought to tax the exess as income in the hands of the firm. On appeal, the A.A. C. found that the money advanced . for the construction of the buildings had beep debited in equal shares to the father and two major sons and a minor son and held that the firm was not the owner of the properties and defocted the addition .. The A.A.C. also observed that the I.T.O. was free to take action to assess the excess in the hands of the co-owners. The I.T.O. thereupon' issued notices under Section 147(a) of the I.'r. Act, 1961 and reopened .the assessments of tlte individual assessees (the co-owners) and included. therein the proportionate shares of the additions on account of the estima!ed excess of the cost of construction. On appeal, the A.A.C. held that Section 147(a) couid not apply but upheld the assessments under Section 153(3) (ii) of 1961 Act.. On further appeal, the Tribunal held that Section 153(3) (ii) could not apply because there was neither a finding .nor a direction in the earlier order of the A.A.C: and further that A.A.C. could 'not convert the assessments made under Section l 47(a) intb those under Section 153(3) (ii). On a reference of the questfons, (I) whether the A.A.C. was justified in )loldirig that the provisions of Section 147(a) were not applicable, and -(ii) whether the provisions of Section 153 (3) (ii) were not applicable, the High Court-held that the proyisions of Section 153(3) were J applicable observing that the A.A.C's finding that the properties did

not belong to the firm and, therefore, the excess amount of the cost of construction could not be rekarded as the income of the firm was a finding which was necessary for the disposal of the firm's appeal and as a corollary it was held that the buildings belonged to 1he coowners and this necessitated the "direction" to the I.T.O. that. he was free to assess the excess in the hands of the co-owners. Dealing with this contention, Pathak J. who delivered he judgment of this Court observed at page 20 of the report:

"The expression "another person" in the Expln. would include persons intimately conne.cted with the person in whose case the order is made in the sense explained by this Court in Murlidhar Bhagwan Da.i (1964) 52 ITR 335 (SC). It is one thing for the partners or'a firm to berequired'toexplain the socnrce of a receipt by tlie firm, it is quite another for them in their jndividual status to be aske.d to explain the source of amounts received by them as separate individuals.

On such opportunity bing provided it would have been open to the assessees to show that the excess alleged over the disclosed cost of construction did not constitute any taxable income, The fi, ndin~ contemplated in Bxpln, 3, it will ~

. )"

llHAGWA~ v. C.I.T. (S. Mukharji, J.) Ill

noted, is a finding that the amount represents the income of another person."

In the iastant case b

0efore 'us, applying the test observed in that case tliis was a case where the facts showed. that income can belong either to the bigger Hindu u11divided family or to the smaller Hindu undivided family, the present assessee along with another smaller H.lJ.F. 'and to 'no one else. Therefore a finding that it belongs odt does not belong to the bigger Hindu u.ndivided family which had disrupted on partition would determine the issue whether it could be . taxed in the hands of the present assessee. Judged in the light of the test laid down in Murlidhar BhagwaT1 Das (supra) and as pointed outin Rajinder Nath's case, it appears to us that the preent assessee can be said to be a person who would be liable to beassessed for the whole or part of the income that went to the.a.ssessment of the bigger , Hindu undivided family in years under appeal and is a person intimately connected with the assessments of the bigger Hfodu undivided family. The income in this case cannot be the income of both bigger H.indu undivided family and the present assessee, it must be either or these two. We are, therefore, of the opinion that direc. tions given in the appeals filed by the bigger Hindu undivided family yould b, e applicable to the present asacssee.

On behalf of the assessee it was contended that only the categories of persons referred to in Sections 30(1) and 30(3) of 1922 Act would be governed by the said expression "any person"

Sub-section (3) of Section 3, I, inter alia, authorises the AJ?pellate Assistant Commissioner in case Of an order cancelling registration of a firm under sub-section (42) of Section 23 or refusing to register a firm under sub-section (4) of Section 23 or Section 26A or to make fresh assessment or to confirm such order, or cancel it and direct the Income-tax Officer to register the firm or to make a fresh assessment, as the case may be, or in the case of an order under subsection (2) .of Section 25 or sub-section (I) of Section 23A or sub-section (2) of Section 26 or Section 48, 49 or 49F, confirm cancel or vary such order. It also authorises in case of an order un~

der sub-section (I) of Section 25A to ccinfirm such order or cancel if and either direct the Income-tax Officer to make further inquiry and pass a fresh' order 'or to make an assessment in 'the manner • laid down in sub-section (2) of section 25A. , The other cases were cases.of orders under Section 28 or sub-section (6) of Section 44E or sqb-se9tion (5) of e9fo'n 44F or qb-section (I) of Section 461

c;:,

... ,.-; .

112 SUPREME COURT J!.EPOlns

[1984] 3 S.C.R.

or in case of an appeal against a computation of loss under Section 24, confirm or vary such computation, or in case of an appeal under sub-section (IA) of Section 30 decide. that the person is or is not liable to make the deduction and in \he latter case direct the refund of the Sl)m paid under sub-section (6)-0f Settion 18.

. , While on these provisions it is material to refer to sub-section (4), of Section 33 whiGh authorises the Tribunal afrer giving both parties an opportunity of being heard to pass such orders thereon as it thinks fit and to communicate any such orders to the assessee and to the Commissioher.

The c:ontention on behelf of the assessee is that though the.

Appellate Tribunal has wide powers as indicated in sub-section (4) of Section 33 but the amplitude of that power is curtailed by other provisions. It was contended that read with sub-section (3} ofSectio.n 34; as assessment order could not be passed after the expiry of four years from the end of the year in which the income, profits or gains were first assessable and is view of the fact that here in the instant c.ase voluntary reiurns for the years under question had been filed by. the assessee within time, after four years no direction could be giyei; i

by the Tribunal. It was, seco!ldly, contended that the present smal, !er Hindu undivided family was not intimately connected (with .the assessment of the bigger Hindu undivided family as contemplated by the observations of this Court in Income-tax Officer v. Murlidhar Bhagwan Das (supra), this direction.was of , no use and the assessment made on the basis of this direction cannot be availed of. ·

• We are unable to accept this oontention. Firstly ii must be observed that the Tribunal passed the orders and gave its dreiction ii respect of the years concerned. These years were the subject matters of appeal before the Tribunal in the case of bigger H.U.F. It wa~ contended that ihese direction were given subsequent to the order under Section 25A and could not affect position thereafter. We are unable to accept this position also. As mentioned hereinbefore, the order under Section 25A was passed in August, 1954. The bigger' Hindu undivided family had applied for order under Section 25A regarding the disruption a( the Hindu undivided family, the Income: tax Officer rejected that prayer. The assessee appealed therefrom. In Aug\ist, 1954, this order was set aside by .the Tribunal and it wa8 'held that the bigger Hindu undivided family had been disruptec). Iii- . •

asmnch as the income liable to be assessed. on the smaller Hindu un- ' . !livided family wo11ld 11rise only on the disrurtion of the lar$er Biridq •

BHAGWAN DAS v. c.1.T. (s: Mnkharji, J.). 113

undivided family; this direction was proper. The order under Section 25A declares the status of the family and the smaller Hindu undivided family became liable to be assessed as a result of disruption of the bigger Hindu undivided family. The assessment orders h.owever wer~ passed based on the previous order under Section

25A but these orders were passed for all these follr years anq the assessments under appeal for all these four years were pending. before the Tribunal in disposing of which the Tribunal gave the direction to make the assessments on the smaller Hindu undivided family.

Therefore no question arises as to whether for subsequent periods i:lirec(ions could have been given. This is a direction clearly within the contemplation of sub-section (3) of Section 34. Secondly, we are of the opinion that the smaller Hindu undivided family is one of the . persons which was clearly contemplated by sub-section (3) of Section 34 in the facts and circumstances of this case. The. assessabili\y o& income and the quantum of the same of the present assessee was linked up with the assessability of the bigger Hindu. undivded family if the bigger Hindu undivided family was liable to be' assessed if there was no disruption then there was no income of the smaller Hindu undivided family. The income in the hands of smaller Hindu undivided family could then not have been liable tobe asssesssd, I on the other hand it was the other way that there was a valid parti- . lion, the \)igger Hindu undivided" family no longer existe.d and the smaller Hindu undivided family would . be liable . to be assessed.

From that point of view it clearly . comes within the ratio of the observation of this 'Conrt in Jncomi!-tax Officer v.

Murlidhar Bhagwan Das (supra). Further more looked at from another point of view, though the Karta represented the bigger Hindu undivided family, all the member's of the bigger Hindu undivided family, including those who were members of the smaller Hindu undivided family were parties though .not oe nomine for all practical purposes, because they were liable as mambers of the family for the amount assessed. In that view of the matter, we are of the opinion that this direction was quite valid and would be applicable.

The obsevations of this Court in the case of Comissioner of Income-tax Central; Calcutta v.

National Taj Traders' are 'in consonance .with the conlusions reached by us. Tulzapurkar, J. expla:ined in the said decision the._ situations in which directions could be given.under Section 33B of the Income-tax Act, 1922 where

)21 I.T.R. 53$.

B '

SUPREME COURT REPORTS "'

[1984] 3 S.C.R,

 there was no express provision like sub-section (3) of Section 34.

In our opinion in the facts of this cas~, the present assessee can be said to be•"any person" as indicated in Mur/idhar Bhagwr.n Das ·(supra) in Section 34(3) of 1922 Act

The view taken by _us is also in consonance with the observation of this Courts inthe case of Co!Jlmissioner of Income-tax, Andhra Pradesh v. Vadde Pul/aiah & Co.'

Refernce was also made to a Bench decision of the Bombay . High Court in the case of Mathuradas B. Mohta v. Commissioner of Income-tax, Poona;' and a decision of this Court in the case of Commissioner of Income-tax, U.P. v.

Mohd: Shakoor Mohi Bashir.• But in view of the facts and circumstances of the instant case before us, it is not necessary to deal with the said decisions.

On behalf.of the assessee, reliance was placed on a decision of the Division Bench of Gujarat" High Cort in the case of Commissioner of Intome-tax, Gujarat v. Shanti/al Punjabhai.4 There an individual Shantilal was a member of the Hindu undivided family and also a partner of a firm. The Income-tax Officer found that the assessee was the nominee of the Hindu undivided family in the said firm, and, therefore, included the share of of profits the assessee in the said firm, in the total income of the Hindu. undivided family .

• The decision proceeded on the _basis that the Income-tax Act did - not contemplate two different assessees in the same assessment year for tbe same taxable income. In that ase the assessee was also an assessec in his own right. In that case theCourt had observed at .page 80 of the report that there were two separate and distinct assessment proceedings, one in respect of the assessee in his status as an individual and the other in respect of the Hindu undivided family. The assessment proceedings in respect of the assessee, Shantilal, were in respect of his income arising from his self-acquired and separate . property. The ssessment proceedings against the Hindu undivided family, were proceedings against the entire entity'. and. though the assessee, Shantilal, was a member of the family, the assessment was on the income derived by the Hindu undivided family from the property or business 'of the said Hindu undivided family. In tht

(1) 89 I.T.R. 240

(2) . 56 l.T , R. 269

(3) 89 I.T.R. 57

(4) sn.T.R. SB

)I ,

• J

BHAGWAN DAS v. c.I.T. (S. Mukharji, J.) 115

assessment; the income accruing and arising from the separate pro- ' perty of.the assessee, Shantilal could not be assessed, as the business carried on by the asseseee, Shanti!al, was not the bussiness of the Hindu undivided family. The Income-tax Officer held that Shantilal was the nominee of the Hindu undivided family, meaning thereby-'

that the business belonged to tbe Hindu undivided family and it was . that conclusion of the Income-tax Officer which was reversed by the . . .

Tribunal. The Tribunal holding that the revenue had failed to prove that the assessee, Shantital was the nominee of the family, in other words, that the income arising from the firm's business was. the income of the Hindu undivided family. The direction given by the Tribunal was on the question which was between the revenue and the Hindu undivided family and the only finding that could be given by the Tribunal was between the two parties, namely, the Hindu undivided family and the revenue and not between the revenue and the as- • sessee. Shantilal, who was not an assessee nor a party to those asseSS' ment proceedings. Therefore, if any action had to be taken in con- . . sequence of the finding or the direction given by the Tribunal, that action could be taken not against the assessee, Shantilal, but against the Hindu undivided famliy. As would be apparent, the facts of tht case were entirely different. ' Here in the instant case the proceeding against the assessee in the present case could be taken only if there was disruption of the Hindu undivided family. Therefore in the assessment of Hindu undivided family viz. if the bigger Hindu undivided family was considered to be an existing entity then in such a case the asssessment against the present assessee could not be sustained. If on the other hand the assessment on the bigger H. U.F. could not be sustained because there was disruption of the family as contended for. by the bigger Hinud undivided family then only the present assessee could be assessed. In that view of the matter, we are of opinion that the present assessee can be said to be. a person other then the appealing assessee would be affected by the order concernd and would come within the nieaning of "any person" as explained by this Court in the case of Income-tax.Officer v. Mur/idar Bhagwan Das (supra).

l)ecision of this Court in the case of Comissioner of Income-tax, .

Punjab, Jammu & Kashmir and Himachal Pradesh v. S. Raghubir . Singh Trust' was relied on behalf of the assessee. There the res-

(1} 123 I.T.R. p. 438

116 SlJ?REME COURTS REPORfS

pondent trust created by R. filed its return of income for the as; ess ment year 195'4·55. Holdiiig that the trust was invalid, the Jncometax Officer assessed the income of the trust in the hands of R. R. carried the matter in appeal and other proceedings and ultimately tl1e High C.ourt held that the trust was yalid and the income was the income of the trust and not Of R. The I.T.O. issued a notice on

19th September, 1961, under Section 34(1)1b) oftbe Indian J.T. Act, i922, to reopen the assessment of the trust. The trust claimed that the notice. was barred by limitation. The Tribunal accepted the claim and held that trust was a stranger to the pr6ceedings for the

ssessment of Rand the second proviso' to Section 34(3) did not

save the reassessment proceedings initiated against the.trust from the b.ar of limitation and. the High Court, on a reference, agreed with<the Tribuna1. On appeal to this Court it was held, affirming the decision of the High Court, that even .though the finding of the High Court that the income belonged to the trust and not tp R was a finding necessary for disposing of the reference in favour of R and it was a "finding", bnt the trust was a stranger to the assessment proceedings of R. and not "any Jlerson" within the meaning of the second proviso to Section 34(3) and, therefore, the second proviso to Section 34(3) was not attracfed and the reassessment proceedings against the trust were barred by time. That decision must be understood in the facts of that case. The settler ahd the trust cannot be said so intimately connected as to corn, e within the ratio of Murli dhar Bhagwan Das's case. The Court found that assessee ttust could not be said to be intimately connectedwith the assessment of Raghubir Singh. As a result of the trust deed failing, there may be numerous situations viz., there might be resulting trust or it might be that the trust property would go to other beneficiaries. It is not necessary for us to explore or explain those possibilities. Biit in the facts of this case; we are of the opinion that whether the income •of the smaller Hindu undivided family, namely the present assessee is liable to be taxed is so intimately or inextricably linked up with the question of assessability of bigger Hindu undivided family, which again is dependent upon the question whether there was disruption of bigger Hindu undivided family and that being the very subject matter' of appeals in the four years in which this direction had been given, we are of the opinion that' _directions given in this case are °, yalid and would save the assessments against the assessee for the two years in question.

In the aforesaid view of the matter, we Me of th~ 9pinion that

" ,.

i17 iluA.owAN DAS v. c.i.r. (S. Mukharji, i.)

the majority of the learned judges of the High Court were right in their conclusions and the question was correctly answered by the majority of the learned judges of the High Court. The ltppeals therefore fail and are dismissed with costs.

H.S.K. Appeals dismiss ed.

BHAGWAN DAS SITA RAM

o COMMISSIONER OF INCOME-TAX

V.:0. TuLZAPURKAR

IncOme-taX Act

s. 23

S. 34

s. 25A

Income Tax Act, 1922

s. 34(1)

s. 34

s. 2

s. 34

s. 34

s. 34(3)

s. 22(1)

s. 34

s. 34

s. 34

S. 34

s. 23

s. 34(3)

M.K.K.R. Muthukaruppan Chettiar

s. 34(3)

s. 34(3)

s. 31

s. 34

Murlidhar BhagwOn Das

R.ajinder Nath

S. Rtzghubf• Singh Trust

S.C. Manchanda

M. J.P. Ma

S.T. Desai

B.B. Ahuja

A. Subhashini

SABYASACHI MUKHARJI

High Court of Allahabad

Section 66A(2)

Indian Income Tax Act, 1922

Section 66(1)

Income-Tax Act, 1922

31st May, 1962

Indian Income-Tax Act, 1922

of'Gulati

H. N. Seth

Singh

C. S. P. Singh

Seth

Section 25A

Indin lncome-Tax Act

Section 22(1)

Section 25A

Section 25A

Income-tax Officer

Section 34

Section 23(3)

Income-tax Act

High. Court of Allahabad

Section 34

Section 311(3)

Nathu Ram Jawaharlal

28th October, 1954

Jawaharlal Mani Ram

Bhagwan Das Sita Ram

Jawabarlal Mam Ram

As mentioned hereinbefore after the Tribunal had directed

th~- assessmets shoul~ be made on the cowponent units of the bigger Hmdu, und!Vlded famdy, afte:partition was accepted, namely, tpe as$essee and Jawabarlal Mam Ram, the Income-tax Officer instea4

: ;~ c

\<_it D

'; f: p

.. -_,

j II

.B.

106 suPilEME couh REPORTS (!

Section 34(1)

Article 226

March 30, 1960

Section 34

Jle Act

Section 23(3)

Section 34

Section 34

Section 22(1)

Section 34

Section 34

Section 34(3)

Section 34

Section 23

Section 34(3)

Section 34

section 30(1)

Section 31(3)

Allahabad High Court

Section 34(3)

Income-tax Act, 1922

Section 34(3)

BHAGWAN DAS~.

S. Mukharji

Section 31

article 14

Section 34

A.A.C.

Section 147(a)

A.A.C

Section 147(a)

Section 153(3)

Section 153(3)

Section 153(3)

Section 147(a)

Section 153

Section 153(3)

I.T.O.

Pathak

Murlidhar BhagwaT1 Das

Rajinder Nath

Sections 30(1) and 30(3)

Section 3

Section 23

Section 23

Section 26A

Section 25

Section 23A

Section 26

Section 48, 49

Section 25A

section 25A

Section 28

Section 44E

Section 461

Section 24

Section 30

Section 33

Section 33

Section 25A

Section 25A

Section 25A

Mnkharji

Section 25A

Section

25A

Section 34

Section 34

Tulzapurkar

Section 33B

Income-tax Act, 1922

Section 34

Section 34(3)

Bombay . High Court

Shantilal

Income-tax Act

Shantilal

Shantital

Shantilal

19th September, 1961

Section 34(1)

Section 34(3)

Section 34(3)

Section 34(3)

Murli dhar Bhagwan Das

Raghubir Singh


1()

R. PALANIMUtf{U

RETURNING OFFICER

February 23, 1984

Section JOO (l) (c)-ReserVed constituency-Canflidate giving false certifica1e as belonging to scheduled tribe-Election held void.

• In his election petition the appellant: contended that th~ second respondent who in fict belonged to the Hindu Reddy community contested the election from the reserv.cd constituency falsely claiming that he belonged to the Scheduled Tribe Konda Reddy community and that by virtue of section JOO(!) (c) of the Representation of the People Act, 1951 the election was void. It was also contended that at the t:me .of .the sc"rutiny of the nominaHon papers the appellant had raised this objection but that the Returning Officer, without holding a proper enquiry, rejected the objection relying upon a Certificate of the

Tebsild>r that the second respondent belonged to the Scheduled Tribe Konda Reddy community. The high Court rejected the election petition and upheld the election.

-Allowing the app.eal (by the Court)

HELD : There is no dispute that the Konda Reddy community is a Scheduled Tribe community. On the evidence available on record it is impossible for any Court to reasonably conclude that the second respondent belonged to the Konda Reddy Scheduled Tribe community. In fact, he belonged to the Hindu Reddiar community, which is. not a Scheduled Tribe co.Jmun1ty. Therefore, his election from the reserved c9nstituency was void under section 100 (1) (c) of the Act. [19D-G)

• per Varadarajan, J. Other Judges expressing no opinion.

With the laudable object of promoting the educational, economic and social advancement of the Backward Classes and Scheduled Castes and Scheduled Tribes the Government had been awarding scholarships, hostel accommodation and other facilities, making reservation of seats in Professional Colfeges and institutions of higher learning and for oppointments -to Government and quasi ..

Oovefnment jobs. But not infrequently, fafse certificates are obtined by others to obtain these benefits thus depriving the persons for whose advantage these benefits are created. The false Claim in this case which es_caped the scrulinY of even the High cOurt had to be negatived only after considerable effort and expenditure on the part of those who wish to lay bare the facts. The same kind of scrutiny and contest could not be expetced from students and •

• -,

'Y .

It. 1.>Ai.ANiMttntu v. RE:t'URNING OFPICER,(Varat4-rqian, J.) 11

candidates belongl.ng to Backward Classes, .Scheduled Cestes and Scheduled Tribes -when these benefits are sought on false certificates. So long as the benefits are continued folthese classes, the Government mach~ry must.

- exerci~ strict scrl?tiny. The Governme.ut must 'Stop any fraud which may be committed on it as well as these classes of.people by taking appropriate steps in regard to grant of certificates, while at ltie same time eosurig that rsons belonging to these ,1asm obtain the requisite certificates without difficulty from the authorities empowered to issue the same. [19H20AJ

CIVIL APPELLATll JURISDICTION : Civil Appeal No. 4027 of 1982. .

From the Judgment and Order dated the 27th September, 1982 of the High Court of Judicature at Madras in Election Petition No. 4 of 1980. ·

P. Chldmbaram, Parmeswaran, P. Manoharam and A.S.

Nambiar for the Appellant. n"

, A. V. Rangam an(t Ms; Sar/a Chandra for respondent No. L

' S.N. Kacker, M.G. Ramachandran and K. Kam.madasam for the .respondents. , • The Judgment of the Co'urt was delivered by

VARADARAJAN, J. This appeal by special leave is directed against th.e judgment of a learned Single Judge of Madras High Court dismissing Election Petition No .. 4 of 1980 with costs quantified at Rs. 1000. The. Election Petition was filed for declaring the election of the second respondent V. Arangarajan alias V. Rangarajan alias Perumal to the.'.I'amil Nadu Legislative Assembly from No. 157, , Uppiliapuram Scheduled Tribes reserved Assembly Constituency in Thuraiyur taluk, Tiruchirapali district, in the election held on . 28.S.1980 as void and further . declaring that ttie appellant R. Palanimuthn has been dnly elected from thai constituency. After hearing the learned counsel for the parties we allowed the appeal on 17.12.1983 totbe_extent of setting aside the election of ihe second ·

respondent for reasons to follow and directed the parties to bear the respective costs. Now we )lroceed to give our reasons. · ' .

"' II'he polling tOQk plac~ on 28.5.1980 and . the result was . announced after the counting was over on L6.1980. The second - .H

SUPREMifcOli.Rt REPORTS tl984j 3 S.C.R.

A . respondent belonging to the AIADMK

0 secured 43,263 votes while the appellant belonging to the Congress (I) party, bis closest rival, secured 40,997 votes. The other candidates in the field, respondents 3 to 5 secured less than 1752 votes each and the second respondent

was declared Clected. ·

the constituency , has been declared by the notification dated 26.2.1969 issued by .the Election Commission oflndia under the provisions of the Scheduled Castes and Scheduled Tribes Order (Amendment) Act 108 of 1976 to he a Scheduled tribes constitnency.

Consequently on \y candidates belonging to the Scheduled Tribes as per the Constitution and the Scheduled Castes and Scheduled Tribes Order 1950 as amended in 1976 could contest for election from this constituency h.aving regard to Article 173 of the Constitution and Section 5 of the Representation of the People Act, 1951, hereinafter referred to as the 'Act'.

The nominations of !ill the twelve candidates who filed their nominations before the last date fixed for the purpose were accepted by the first respondeni, Returning Officer as valid. Later, seven .of

thpse candidates withdrew leaving only the appellant and respondeflts - 2 to 5 in the field.

By the Scheduled . Castes and Scheduled Tribes Order, 1950, Konda Reddies in Tamil Nadu except Kanyakumari district. and Shencottah taluk in Triunelveli district have been declared as belonging to the Scheduled Tribes. Later, by the Scheduled Castes and the

Scheduld Tribes (Amendment) .Act 108 of 1976 the exception made in respect of Kanyakumaii district and Shencottah taluk in Triunelveli district' has been removed with the result that Konda Reddies are thereafter shown to be existi.ng throughout Tamil Nadu.

Only Sclreduled Tribes candidates could contest from the constituency concerned' in view ot the provisions referred to above.

The appellant's contention is that the second respondent dos not belong to the. Konda Reddy Scheduled TriQe community as Claimed by him but is a Hindu Reddy and was therefore not qualified to be chosen to contest from the reserved .. constituency and consequetitly his election is void under Section 100 (I) (c) of the Act. The second

respondent opposed the election petition contending that he belongs to t.he Konda. Reddy Scheduled. Tri.be community and was therefore

- cntitld' t\) contest from the constituency and his election is valid~

\...

. I!.. PALANiMUTIDJ v. RETURNING OFFICER (Varadarajan, J.) 13

The appellant filed objection to the acceptance of the second r.esportdent's nomination at 'the time of scrutiny of nominations by the first respondent, Returning Officer, contending that the second respondent does not. belng to the Konda Reddy community and was not a Scheduled 'fribe candidate. This objection was admittedly rejected by the first respondent who appears to have relied upon the Tehsildar's certificate: The appellant's contention is that the first respondent rejected his objection to the, acceptance of the omination of the sec11nd respondent relyirtg upon the certificate obtained by the second respoudent from the Tebsildar .to the effect that be belongs to the Konda Reddy Scheduled Tribe . community without holding a proper enquiry .and applying his own mind to the principles of law and the n:iatedal placed before him. ' •

On the pieadings the learned Single Judge who tried the election petition framed th~ following four material issues:

!. Is the second respondent a person not belonging to the D Konda Reddy (ScheduledJTrihe) community?

2. Was the acceptance of the nomination of the .second respondent improper?

3. Is the election of the second respondent liable to be declared ·~ void under sections 100 (I) (c), 100 (!) (d) (i) and 100 (!)° (d)(iv) of the Representation of the Pe?ple Act, 1951? , ·

4. Is the petitioner entitled to a further declaration under s.

101 of the Act?

On consideration of the oral and documentary evidnce adduced before him by-the parties as also the evidence or three other. persons examined as CWS 1 to 3, the learned Single Judge held that the second respondent belongs to.the Konda Rddy Scheduled Tribe community• and 'he upheld the second respondent's election and dismissed the

lection petition with costs as mentioned above. In coming to the conclusion that the second respondent belongs to the Konda Reddy Scheduled Tribe community the learned Single Judge. found that the .evidence of t, he second. respondent RW-1 and of his father RW-9 that the second respondent belongs to the Konda Reddy COQ\munity is corroborated by the evidence of no.t only RWs-2, 3, 4 and 6 but also by tile evidence of RW-5 who belongs to the Naidu community l\Dd knows the. 111emers of tqe scond respondent's . famHy . and br .

I the evidence of RW-7 who belongs to the Oorali community- The learned Judge has made the following general observation regarding the witnesses exainin:ed on the second respondent's side: '

"Generaliy I find that all the witnesses who _come to depose on behalf of the second respondent were elderly persons and have impressed me very much as telling the truth.

They are also. independent witnesses and expected to know the community of th!" second respondent in view of theit residence in the village and their long _acquaintance. The veracity of their statements hild not been shaken (in) the least in the cross-examination. I have n6 hesitation in accepting the evidence of these witnesses when they state that the second respondent belongs to Konda Reddy community which is a Scheduled Tribe."

Before us it was not disputed that the constituency concerne d has been reserved by law for Scheduled Tribes candidates and . therefore only Schednled Tribes candidates could. contest for election

from that constituency. It was also not disputed that the appellant and respondents 2 to 5 contested as Scheduled Tribes candidates , and that the appellant belongs to the Scheduled Tribe community and the election of the second respondent would be void under s. 100 (1) (c) orthe Act and the appeal would have to be allowed if the second respondent does. not belmg' to the Konda Reddy Scheduled Tribe community. The only dispute before us is on th~ question whether the second respondent belongs to the Konda Reddy Scheduled Tribe community. The appellant's stand on this point is that the second respondent does not belong to the Konda Reddy community and is not a Scheduled Tribe candidate entitled to co!l'pete for election from the constituency concerned l; iut is a Hindu Reddy, while the stand of the second respondent is that he is a •'.Konda Reddy and belongs to the Scheduled Tribe community and was therefore entitled to compete. for election from the constituency and has been validly elected. There is uo dispute that Konda Reddy community is a Scheduled Tribe community. Arguments were advanced by Mr. P. Chidambram, learned counsel who appeared for the appellant and Mr. S.N. Kackar, learned Senior Counsel who appeared for the second respondent on this only question. The first respondent's counsel Mr. A .. V. Ra, ngam did riot advance any

argument.

lt is Se.en frolll the evi\len9e of PW-12, t)le t)l¢n cliiefl3le9tora) . . . •

It. PALANiMUrHU v. ltBTUllNiNG OFPiCEit (Varadarajan, J.) 15

Officer, Tamil Nadu that the constituency concerned was a nonreserved or general constituency upto February 1979 and that it was converted into a Scheduled Tribes reserved constituency by the notification Ex. P-76 dated 26.2.1979 issued by the Election Commission oflndiaunder the.provisions of the Scheduled Castes and '. Scheduled Ttibes erder !Amendment) Act, 1976 which came into force on 19.9.1976. The appellant and respondents 2 to 5 contested in the election held in the constituency concerned on 28.5.1980 as

Scneduled Tribes candidates. The second respondeut R W-1 . had obtained the certificate Ex. R-1 dated 25.10.1977 from the Tahsildar Thtlraiyur soon after the inclusion of Konda Reddy coilfmunity in -the list of Scheduled Tribes by the said amendment of the Scheduled Castes and Scheduled Tribes (Order) Act, 1976. Theparties relied" upon oral and documntary evidence before the learned Single Judge of the High Court for proving their respective•contentions.

But before us much reliance was not placed on oral evidence and our attention was invited to certain relevant documents. The oral evidence adduced on the side of the appellant is to the effect that the sec_ond respondent belongs to the Hindu Reddiar community which is not included in the Scheduled Tribes while the oral evidence adduced on the side of the .second respondent is to the effect. 'that he belongs to the Konda Reddy community Which is a Scheduled Tribe community. . . .

Mr. Chidambram invited our attention to four sets of documents. Exhibits P-26, P-27, P-28, P-29, P-30, P-31 and P-32 are documents.relating to the second respondent's family and constitute one set. Exhibits R-2, R-3, P-23, P-24 and P-63 constitute the second

sE.exht_. _Ebthibpit 9

s P(-7), Pp1 1 2 0 , P(d)32a adndpP 5 - 9 58 con 1 ttittuteththe r thirthd sett. f t 1 s - a , • n - cQns 1 u e e 1our se .

Exhibits P-7, Pl2, P-32 and P-58 constitµte the third set. We sha11 consider these documents seJ'arately.

Ex. R-9 is t\le sale deed d11ted 4.3.1899 executed by Veera Reddy in favour of Chellammal wife of the 6econd respondent's G grand flM'her Perumal Reddy. Ex. P-26 dated 8.10.1926 is the mot!· gage dr_ed executed by the second respondent's father Venkata Reddy and his parents Perumal R'eddy and Chellammal in favour of one Narayana Reddy. Ex, P-27 is an Order of 1965 sanctioning {in agricultural Joan of Rs. 2000/- to the second respondent's father .. Venkata Red\ly. Ex. P-28 dated 7.10.1970 is the sale deed executed

 by the second respondent's father 'Venkata Reddy in favour of H

feriasar aqd another. Ex. f~9 is an El\etion Reister e)\q"a~

' ,,, showing that Challammal, wife of Venkata Reddy

0 is the decree holder-auctioIJ, purchaser in E.P. No: 270 of 19'H in 0. S. No. 1865 of 1970 on the file of 'the Additional District .Munsiff's Court

' . ' Thuraiyur. Ex. P-30 dated 9.7.1973 is the sale deed executed by

Chellammal wife of Venkata Reddy in favour of one Veeiasaniy and others. Ex. P'31 dated 13.9.1976 is the sale deed executed in favour of the' second respondent described a'S the son of Venkata • Reddy by one Ramasamy Reddy and others. In all these documents the second respondent's family's commQnity is mentioned as Hindu

Reddy community.

Ex. •R-2 dated 15.4.1958 is the first page of the Secondary School Leaving Certificate relating to the second respo9dent who is stated therein to be a Hindu Reddiar by caste. Ex. R-3 is the . Secoddary SchoOI .Leaying Certificate of the second respondent's sister Leelavathi born on 15.12.1948. The second ' respondent; s. father has verified a]l the entries in columns 1 to 6 of Ex. R-3 to be

correct and has undertaken not to demand any change in those entries 'in future-., Against column 2. (iii) relating to Leelavathi's

commnity, as to whether she belongs to Scheduld Caste or Scheduled Tribe or most Backward Class or is a C~>nvert to Chiistianjty from auy Scheduled Caste the sec_ond respondent's father )las an.s- . wered that query saying that she does not belong to any of those castes by an emphatic 'No'.~RW-1 has admitted that fa:. R-3 relates to his sister Leelavathi and contains his father's signature. He has, howev; r, stated that his]father is illiterate and bas put his signature in the original Ex. R-3 without knowing what it contains. Ex.· P-23 is an extract from the birth register rlating to a male child Veerama Reddy son of Venkata Reddy. and Chellammal born on . 29.12.1937. Ex. P:24 is another birth register extract relating to the birth of a'maTe child.Perumal, evidently the second respondent; on 6.6.1943 to the parents Venkata Reddy and ChellammaJ.. Ex; P-6~ is another birth register extract relating to the birth of a female child l>orn on 1.9.1949: Venkata Reddy himself had informed the authority concerned about the birth on the next day ilnd has signed the entry in token, thereof. In . all these 'documents also the second respondent and his father are mentioned as belonging to the Hindu Reddiar community. •

Ex. P-7 dated 11.6.1963 is the second respondent's application for admission into a Cooperative Traiqing Institut~. Ex. P-12 dated 12.6.1972 is the second respondent's applicaH, on for admissio.n of his daughter Geetha in a Panchayat Union Elementary School. Ex.' J>-32 is tM .certified \lO)?Y of the plaintiµ Small Caqse $4it, :\'lo. 16?

...... c

~-· -,~"

.l!.._PAI.ANIMU'IHU-V. RETURNi:NG OFFICER (Varadarajan, J.) 17

.of 1980 instituted by the second respondent in the District Munsiffs' . Court, Thuraiyur. The second respondent has asserted in bis evidence that he signed that plaint prepared by the Advocate's clerk . wilho_ut going through its cointents. Ex. P-58 is the entry in the

Service Register relating to the second respondent under. his signa- 'ture dated 5.7 .1967 .. In' all these documents also the second respondent is dtscribed as a Hindu Reddiar,

The above documents show that the second respondent : and his 'father 1 Venkata Reddy and grandfather Perumal Reddy belong to the Hindu Re4diar community. The appellant . gave notice uftder Order 12 Rule 5 of the Code of Civil procedure

o the_ second respondent for admitting certain facts. One of the facls he was required to admit is that Hindu Reddiar community is not a Scheduled Tfibe community. The second respondent had ad- . mitted that the Hindu Recldiar comm'uity is not a Schduled Tribe community and stated that .he J:iad obtained the certificate dated 25.10.1977 from Tahsildar ofThuraiyur taluk to-the effect that he , longs to the Konda Reddy community, and .that he had applied , on an earlier date for the grant of that certificate in order to. enable him to aJ?ply for a job. Faced with the aforesaid documents which .clearly show that the second . .respondent and the. members.of his : family belong to the Hindu Raddiar conimunity whichis admittedly

, not a-Scheduled Tribe_ c0mmunity the second respondent has sought- E . to get ov.er the difficulty by saying that Konda Reddy. communitY , is.asub-caste of the Hindu Reddiar community. This explanation, . cannot . be accepted having re11ard to the facts .and circumstances of . the case.

The last set of docuinents have been produced to show that the sec_ond -respondent had not flaimed to belong to the Konda Reddy Scheduled_ Tribe conlll)Unity though he would have done so if be belongs to that community in fact but has merely s.tated that he is the son ofVenkata Reddy. -Ex. f-9. (a} dated 12.3.1968 is the • second respondent's appliqation for appofotmnt as Supervisor in a; Land Mortg[; g~.Bankwhere b.e has described himself as the son of Venkata Reddy. Ex. P-10 (d).<lated 26.3.1918 is the second respon- . dent's application for appointment as a Trustee in Sri .Prasanna . Ven)catachalapathy temple and l)ther terqples at Thuraiyur where also , li, y has described himself 'as the son of Venkata.Reddy. Ex. P-59 ,:d11ted 8. l. l 9l'i5 is Jhe se, cond-respondent's application for appoint . , ment as a J_unfor Assistant ill: th, e 'thuraiyurural Cooperative Bank

. where he .has, describd J:iirqsel(.as the son of Veqkala Reddy. Ex.

_..p.lQ {d) tnay not.serve the_pu, l'pose for which t.his s.et of. documents al!a'l'e beep ; produed. in the; absence Of any meterial ori record to : ,! . - - '- ... - ... ' '. -· ' " ; - '• .. ·, ·- _._ - - '

A •

SUPl\EME COURT REPORTS

[1984) 3 S.C.R.

show that the second respondent would have stood to benefit in the matter of appointment as a trustee of the temples if he had men- • tioned that he belongs to the Konda Reddy Scheduled Tribe community. It is common knowledge that in Tamil Nadu reservation for certain percentage of appointments in Government and quasi- Government services is based on the community to which applicants' belong. The reservation of certain percentage 'of the appointmentss to Backward Classes on the one hand and Scheduled Castes and Scheduled Tribes together on. the other has been made depending upon the relative population of those communities in that State ..

Sch6larships and hostel-accommodation are. available in that State to the Backward Classes and Scheduled Caste and Scheduled Tribes students subject to e!jgibility. These facts are well known in Tamil .Nadu. It is not prol:>able that the second respondent who had applied in 1965 and 1968 for. appointment as a Junior f..ssistatit in.

Thuraiyur Rural Cooperative Bank and as Supervisor in a Land Mortgage Bank was not awar.e that it would be advantageous for him to mention in those applications that he belonged to the Konda Reddy Scheduled Tribe community if in fact he had belonged to that community. We think tht he would riot have failed to mention in those applications that he belongs to the Konda Reddy Scheduled Tribe .community if in fact he had belonged to that community.

While the first three of the four sets of documents mentioned above . probablise the fact that the second respondent belongs to the Hindu Reddiar community which admitteolly is not a Scheduled Tribe community, Ex. P-9 (a) andlP-59 in the last set of documents improbablise the second respondent's 'case that he beiongs to the Konda •Reddy Scheduled Tribe community. Ex. R-3 which is one of the documents in the first set is a very important document which conclusively esta)>lishes that the second respondent does riot belong to the Konda Reddy Scheduled Trib.e community, fodn that document . which had been . verified by thejsecond respondents's father to be true under his signature with an undertaking that he would not demand any change in any of the eniries in columns 1 to 6 the second respondent's father has sti+ted that. his daughter Lee!avathi to wh9m Ex. R-3 rlates does not belong.to the Scheduled Tribe or scheduled Caste or Most Backward Class and was not a Convert to Christianity from any Scheduled Cste. The s.econd respondent's father RW-9 has conveniently stated ii).. his evidel).ce 'that he does not know to read or write Tamil, Telugu or any oiher language, that he used .to previously sign in Tamiland that lfe has lost .hill eye-sight and COJild not see 'whether El\&. ~4 l\lld l, l-~ conta4l hi4

R. PALANiMUT!IU v. RETURNiNG O'FFICER (Varadarajan, J.) 19

signature. It is not possible to rccept the evidence of RW-1 who has admitted that Ex. R-3 relates to his siater Leela:vathi and con. •

tains his father' signature, as mentioned above, that his father RW9 is illiterate and he had signed Ex. R:3 witbout knowing what it con tained. R W-9 appears to be ignorant of the existence of the community know!) as Konda Reddy community, for he has stated in his evidence that _ther_e. is no community known as Konda Reddy communify though earlier he had stated in his evidence that he belongs to the Konda Reddy community. RW-1 has_ stated in his evidence that he came to know that he belongs to the Konda Reddy community only from the information given to him by his father RW-9. It is not the case of the second respon.dent that his father RW-9 himself came to know that he belongs to the Konda Reddy community only after the date on which he put his signature in the aforesaid imporiant document Ex. R-3 in which he has clearly. admitted that.his daughter .Leelavathi does not belong to. any Scheduled Tribe. Therefore, RW-9 who has Clearly admitted in Ex, R-3 that his daughter Leelavathi does not belong to the Scheduled Tribe community could not have informed the second respondent that they belonged to the Konda Reddy community. On the. evidence available on record in this case it is absolutely impossible for any court to reasonably conclude that the second respondent belongs to the 'Konda Reddy Scheduled Tribe community and not the Hindu Reddiar community. We may state here that Mr. S.N.

Kackar found it almost impossible to support the judgment of the learned Single Judge that the second respondent belongs to the Konda Reddy Scheduled Tribe community and that his nomination and subsequent election as a Member of the tamil Nadu Legislative .

Assembly from the Scheduled Tribes .reserved 'Constituency concerned are valid. For these reasons we hold that the second respondent does not belong tp the Konda Reddy Scheduled Tribe commyunit but belongs to the Hindu Reddiar commuity which is not a Scheduled Tribe community and that his election from. the Scheduled Tribes reserved constituency concerned is void under" s. 100 (l)(c) of the Act. We therefore allow the appeal and set aside the second respondent' selection with costs as sta, ted above.

Before I part with this appeal I would like to say what we feel that the Goyernment of Tamil Nadu should notice for taking such remedial action as it may deem necessary. Scholarships. are awarded, hostel accommodation and facilities are made available and reservation of seats in professional and other colleges and institutions of ]iigher learnin!l and for appointment to posts in

. G . •

c ..

20 ..

government and quasi-government service have been made in Tamil Nadu for the backward lasses forming one group and Scheduled Castes and Scheduled Tribes. forming another group on the ratfo of their population with the laudable object of helping their educational, economic and ocial advancement. The second respondent who has now been found to be a Hindu Reddiar and not a Scheduled Tribe Konda Reddy, had admittedly obtained the Tahsildar; s certificate dated 25.10.1977 to the effect that he belongs to the Scheduled Tribe Konda Reddy community adqiittedly with the object of securing a job as a Scheduled Tribe candidate. If he had succeeded in getting any job in gvvernment servic~ or qu1sigovernment service on fhe basis of tliat certificate it is needless to say that he would have deprived some real Scheduled Caste or Scheduled Tribe. candidate getting the job on the bassis of the aforesaid reservation. The second respondent has used that certificate for obtaining nomination and electloa in a Scheduled Tribes Constituency of the Tamil Nad.u Legislative Assem':>ly even thvugh he ought to have known that other candidates in the keenly contested election might raise .objection to ; his false or wrong claim that .he .is . a_ Scheduled Tribe. candidate. The wrong claim which escaped the scrutiny of even the High Court had to be negatived only by this Court after the appellant had tken. a lot of pains and incurred considerable expenditure in filing the present appeal. This

amount of scrqtiny and contest could not.be expected from stuaents and candidates for; appointments who belong to Backward Classes scheduled Castes and. Scheduled Trib, s. If 11tempts are made by persons not belonging to any of these communities at securing the

speCial benefits to wh\ch these Backward Classes, Scheduled Castes and Scheduled Tribes students and candidates are entitled under the rules in force in that State, an.d there is. no proper scrutiny of the claim of such persons that they belong to these classes the benefits which are intend\'d by the Stte to go tq these classes will be taken away by those to whom they are not really intended. Therefore, so long as these benefits are continued for the aforesaid classes strict scrutiny has to be made by the State Government machib.ery and the fraud which may be committed. on the State and those ciasses of people for whom these benefits are really. intended by those for , whom these benefits are not meant by producing .false community certificates has to be'stopped by the government taking appropriate . steps. At the same time it must be nsured that it is not made difficult for persons really belonging to these class.es obtaining the .. necessary community cer\ificates from those at1_14oriseq o issl\e, th.~

. '

R. P;\Lrn!M'UTHU v. irnTURNINQ, QFF!CER (F. ALI&. R. MISRA, jJ.) 21 ·

same.

A copy of the judg1Jlent shall be forwarded to the Chief A Secretary to the Government of Tamil Nadu. ·

FAZAL ALI & RANGANATH MISRA, JJ. We entirely agree with the reasons given by brother Varadarajan, J. for allowing the appeal.

However, we refrain from. expressing any opinio11 on the observations made by our learned Brother in the last paragraph of the judgment, beginning with the words "Before we . part with" and ending with "authorised to issue the same".

P.B.R.

Appeal allowed .

. '

. '

R. PALANIMUtf{U

February 23, 1984

Representation of the People Act, 1951

the Returning Officer

section 100

per Varadarajan

CIVIL APPELLATll JURISDICTION

High Court of Judicature at Madras

P. Chldmbaram

Parmeswaran

P. Manoharam

A.S.

Nambiar

A. V. Rangam

Sar/a Chandra

S.N. Kacker

M.G. Ramachandran

K. Kam.madasam

VARADARAJAN

R. Palanimuthn

AIADMK

Article 173

Section 5

Representation of the People Act, 1951

Section 100

D Konda Reddy

sections 100

s.

101

s. 100

P. Chidambram

S.N. Kackar

A .. V. Ra

Chidambram

Venkata • Reddy

Ramasamy Reddy

Veerama Reddy

Venkata Reddy

Chellammal

Perumal

ChellammaJ

Geetha

Perumal Reddy

Order 12 Rule 5

the Code of Civil procedure

Venkata.Reddy

Veqkala Reddy

Tamil Nadu

Thuraiyur Rural Cooperative Bank

.Leelavathi

Leelavathi

S.N.

Kackar

s. 100

Goyernment of Tamil Nadu

FAZAL ALI

RANGANATH MISRA