The Commissioner of Income Tax vs Gangabishan Mohanlal

Patanjali Sastri, J.—The assessee is the manager of a joint Hindu family having its residence at Secunderabad outside Britjsh India. He was

assessed on behalf of the family for the assessment years 1939-1940 and 1940-1941 in respect of the family income accruing not only in British

India but also abroad, the assessee being treated as a resident under the provisions of Section 42A (b) of the Income Tax Act. The assessee

appealed to the Income Tax Appellate Tribunal which did not agree with the view that the family of the assessee was resident within the meaning of

the section referred to above and directed that he should be assessed as a non-resident. The Commissioner of Income Tax, having asked for a

reference to this Court on this question, the Appellate Tribunal has stated the case and referred the following question for the opinion of this Court:

Whether on the facts found by the Tribunal the assessee can be said to be a resident in British India within the meaning of Section 4-A (b) of the

Indian Income Tax Act?

The facts found by the Appellate Tribunal are as follows:

The family resides at Secunderabad and the manager (the respondent before us) also resides with the family at that place. The family however

carries on business at Guntur and also at Bombay through agents duly authorised in that behalf. The respondent visited Guntur during the

accounting year and stayed there in a portion of the business premises for two days--he arrived on the 2nd April and left for Secunderabad on the

4th. On these facts it is contended for the applicant before us, the Commissioner of Income Tax, Madras, that the respondent''s family was

resident in British India within the meaning of Section 4-A (A) of the Income Tax Act, as the control and management of the affairs of the family

was exercised by the respondent who stayed at Guntur for two days as stated above. It has, however, been found by the Tribunal that during his

stay the manager exercised no act of management or control in respect of the business at that place.

Section 4-A (b) reads thus:

For the purposes of this Act, a Hindu undivided family, firm or other association of persons is resident in British India unless the control and

management of its affairs is situated wholly without British India.

The question is whether on the facts stated above it could be said that any part of the management or control of the affairs of the family is situated

within British India. The answer to this question it seems to us should clearly be in the negative. The mere visit of the manager of the family to

Guntur and his stay there for two days cannot amount to the exercise of control and management of the affairs of the family at Guntur in the

absence of anything to show that during such stay he actually exercised any act of control or management. We are of opinion that on the facts

found the question referred to this Court should be answered in the negative.

The applicant will pay Rs. 250 to the assessee for his costs.