JUDGMENT

BRIJLAL GUPTA J. - This is a reference u/s 66(1) of the Income Tax Act. The question which has been referred for the opinion of the court is :

"Whether it was legal to determine the applicants share income from the firm of Paras Nath Oil Mills in the assessment proceedings relating to the applicant and to add it to the applicants income without raising a separate assessment on the firm of Paras Nath Oil Mills ?"

The assessee is a Hindu Undivided family. It was assessed for the assessment year 1953-54 but without the inclusion in that assessment of it share income from firm known as Paras Nath Oil Mills. In the course of the assessment of the subsequent year the Income Tax Officer came into possession of information that the assessee had started business in partnership under the name and style of Paras Nath Oil Mills in the accounting year relating to the assessment year 1953-54 and had realized a portion of its income from its share of the income of the partnership business. Accordingly, proceedings were taken against the assessee u/s 34 of the Income Tax Act and the share income of the assessee from the firm was included in its assessment.

The assessee went up in appeal and o