Judgment

HEGDE, J.:- These are appeals by special leave. Though as many as four questions were referred by the Tribunal to the High Court under Section 66 (1) of the Indian Income Tax Act 1922 (to be hereinafter referred to as The Act ), the only question that was argued before us was question No. 2, namely :

"Whether the Appellate Assistant Commissioner in dealing with appeals of the Association of persons consisting of all the heirs of Zahur Bux could give a direction under Section 34 (3) to take action against the assessee ?"

2. The High Court answered that question in the negative and in favour of the assessee.

3. The material facts lie within a narrow compass. Two persons by name Allah Bux and Zahur Bux were carrying on business at various places including tobacco business at Mauranipur and they were assessed in the status of Association of persons. In 1938 Allah Bux died leaving his widow Begum Zaidi as his only heir. The said Begum transferred her interest in favour of Zahur Bux. Thereafter Zahur Bux became the sole owner of the business. Zahur Bux gifted his business at Mauranipur to his two sons Mohd. Shakoor and Mohd. Bashir in 1942. Zahur Bux died in 1948. During the assess