JUDGMENT

1. This is an application under Section 66(3), Income-tax Act. The Commissioner of Income-tax refused to state a case. The applicants' case is that Chhedi Lal was the sole exclusive owner of the business known as Chhedi Lal and Sons. On 22nd July 1934, he executed his last will, under which he gave a half share to his two sons, Rikhi Lal and Shyam Sundar, and the other half to his three grandsons, Nand Kishore, Jamuna Prasad and Laxami Narain sons of his third son Barati Lal. In 1935 Chhedi Lal died and the legatees became owners of the business. These legatees did not take the property as members of a joint Hindu family but as legatees in specific shares. They continued the business which is still going on. The assessment relates to the income of this business. Till 1937 these legatees did not take any steps to get the business registered under the Income-tax Act. On 13th January 1939, they applied for registration of the business under Section 26A of the Act. In February 1939 they had themselves registered under the Companies Act. On 6th February 1939, an agreement between the alleged partners was filed, and that is the very date when the Income-tax Officer refused registration. Section 26(1) of the Act makes it clear that the deed must be filed before the making of the assessment, and this it is argued was done. In our opinion the case is concluded by the provisions of Section 25A, Income-tax Act, read with Section 5, Partnership Act. Section 25A, Clause (1), says:

Where, at the time of making an assessment under Section 23, it is claimed by or on behalf of any member of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income-tax Officer shall make such inquiry thereinto as he may think fit and, if he is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions he shall record an order to that effect.

2. Clause (3) runs:

Where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family.

3. In the present case, it is admitted that the members of the family are joint in status, but it is claimed that the business was the self-acquired and private property of Chhedi Lal and that he bequeathed it in separate shares to the different members of the joint family, leaving out his son, Barati Lal, who was to receive only maintenance. This contention scarcely seems to be justified on the facts. The designation of the business as Chhedi Lal and Sons seems to indicate that it was a joint family business. But quite apart from this the business has permitted itself to be assessed as a joint family b is ness ever since Chhedi Lai's death until the present application for registration. Under Clause (3) of Section 25A, it must be deemed to continue as a joint family business until an order under Section 25A(1) has been made. Before that can be made, there must be a claim by or on behalf of the members of the family that a partition has taken place among them. No such claim was made. The claim made was quite different. It was that even during the years when the business was assessed as a joint family business, it was really separate and had been from the time of their father. No claim that partition has taken place has been made. The presumption raised by Clause (3) of Section 25A therefore still remains in force and can only be rebutted by the members getting an order under Section 25A, Clause (1).

3. The applicants' learned Counsel argues that because his clients sent in no return and were therefore assessed ex parte under Section 23, Section 25A will not apply and he cites Gopi Nath v. Commissioner Income-tax U.P. (, AIR1936All286 in support of this proposition. This, however, is not what was laid down in the above judgment. It relates to inquiries made behin