JUDGMENT

Satish Chandra, J. - A well-known family of Allahabad, popularly known as the Jhusi or Naini family, was assessed to Income Tax in the status of a Hindu undivided family in the firm name of Kishorilal Makundilal.

2. In 1926 Pratap Chandra, one of the members of the family, instituted a suit for partition in the court of the civil judge, Allahabad. In due course a preliminary decree was passed in 1931 partitioning the family into five branches, which were commonly known as the "plaintiff's branch", " Calcutta branch ", " Naini branch ", " Banaras branch " and " Baijnath Prasad's branch ".

3. The civil judge, Allahabad, passed a final decree for partition on 13th January, 1939. The family properties and assets were divided into five lots. Soon after the civil judge appointed Sri Kamta Prasad Kakkar and Sri D. N. Kapur as joint receivers for the entire Hindu undivided family estate. The receivers were, however, required to keep accounts of the income of the five branches separately. The receivers took possession of the entire estate of the Hindu undivided family on 10th May, 1939. On 27th December, 1939, the civil judge, Allahabad, directed the receivers to hand over possession of the properties allotted to the plaintiff's branch to the plaintiffs themselves. This appears to have been done on 29th December, 1939. From this date onwards the members of the plaintiff's branch were in direct possession of the properties allotted to them.

4. On 23rd April, 1941, in the appeal filed against the final decree this court appointed Sri Kartar Narain Agarwal, advocate, as the receiver over the properties allotted to the plaintiff's branch. The erstwhile joint receivers were discharged so far as the properties of the plaintiff's branch were concerned.

5. Thus, the two receivers jointly managed the entire Hindu undivided family estate from 10th May, 1939, onwards. But with effect from 29th December, 1939, they ceased to manage the properties allotted to the plaintiff's branch. From 23rd April, 1941, this lot of properties was managed by Sri Kartar Narain Agarwal, receiver.

6. For the assessment years 1941-42 to 1946-47 the income of the properties belonging to the Hindu undivided family was assessed in the hands of Sri Kamta Prasad Kakkar, the receiver. Sri Kakkar appears to to have died and was succeeded by Sri R. N. Basu as the receiver. For the assessment years 1947-48 to 1950-51 the income of the Hindu undivided family was assessed in the hands of Sri R. N. Basu, receiver. These assessments were made u/s 41(1) of the Indian Income Tax Act, 1922, on the footing that the receiver was managing the estate on behalf of the Hindu undivided family.

7. It appears that these receivers defaulted in filing returns of the income of the Hindu undivided family in time. The Income Tax Officer levied penalty for this default in several years, totalling a sum of Rs. 52,300. The total demand of Income Tax and penalty remaining unpaid for the ten assessment years 1941-42 to 1950-51 came to Rs. 1,93,367-31.

8. On 9th December, 1957, the Income Tax Officer addressed a letter to Sri Sharda Prasad Agarwal of the Banaras branch proposing to impose penalty u/s 46(1) of the Act in case the demand against the family was not liquidated. He invited the said Sri Sharda Prasad Agarwal to meet him to discuss ways and means for liquidating the tax demand created for the ten aforesaid assessment years. On 26th February, 1958, the Income Tax Officer issued a notice to Suraj Prasad of the plaintiff's branch. In this notice payment of the tax demand of Rs. 1,93,367.31 as also payment of penalty of Rs. 28,245.25 was demanded. It appears that subsequently the imposition of this penalty was cancelled.

9. Three of the branches of the family, including the plaintiff's branch, instituted a writ petition in this court seeking to quash the two aforesaid notices. It was also prayed that the Income Tax Officer, Allahabad, be restrained from recovering the amount of tax or penalty ment