Cit Vs. K.A. Rajagopal - Court Judgment

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counsels: mrs. pushya sitharaman, for the revenue t. vasudevan, for the assessee in the madras high court n.v. balasubramanian & k. raviraja pandian, jj. - t.n. estates (abolition & conversion into ryotwari) act, 1948 [act no. 26/1948]. sections 5(2) & 67; [a.p. shah, cj, mrs. prabha sridevan & p. jyothimani, jj] suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. -- t.n. estates (abolition & conversion into ryotwari) act, 1948. sections 5(2) & 67; suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. n.v. balasubramanian, j.the income tax appellate tribunal has stated the case and referred the following question of law for consideration under section 256(1) of the income tax act, 1961 :'whether, on the facts and in the circumstances of the case, the appellate tribunal is correct in law in holding that remuneration received from the firm by partner representing his huf is not to be included in the assessment of the huf, but assessable in the hands of the partner as individual?'2. the assessment year involved is 1987-88. the assessee is a partner in a partnership firm of b.k.m. ananthapadmanabha iyer and sons representing his joint family. in the assessment proceedings of the assessee, the income tax officer held that the remuneration of the assessee/partner was assessable in the hands of hindu undivided family and not in the hands of the partner in his individual capacity. the deputy commissioner (appeals) on appeal allowed the claim of the assessee holding that the remuneration should be assessed in his individual capacity and not in the hands of the joint family. the order of the deputy commissioner (appeals) was upheld by the appellate tribunal.3. mrs. pushya sitharaman, learned senior standing counsel for income-tax in her fairness has drawn the attention of this court to the case of cit v. n. deenadayalan : [2000]241itr133(mad) , wherein this court on similar circumstances held that the remuneration received by the partner would be assessable in the individual assessment of the assessee when there was no direct nexus between the joint family funds and the salary received and where the salary was paid for the special skill and personal exertion of the karta.4. following the said decision of n. deenadayalans case (supra) and for the various reasons stated therein, we hold that the tribunal was correct in law in holding that the remuneration received by the assessee is not to be included as part of the income of the joint family, but should be assessed in the individual assessment of the assessee.5. accordingly, the question of law referred to us is answered in the affirmative against the revenue and in favour of the assessee. no costs.