George Rankin, J.

1. Upon the terms of the agreement of February 12, 1933, it is to be observed that it does not itself purport to effect any partition of family property, or to be a transfer of any property, movable or immovable, by the father to the other parties. It recites that the father has given a share to the other parties. So, too, it does not state that the partnership came into existence on the date of the agreement, February 12, 1933, but that the parties have already entered into a partnership. It would appear, indeed, to have been the assessees case that the oral partition and commencement of the firm took place in September, 1931, and that certain entries were made in the books at that time. When a document purporting to be an instrument of partnership is tendered under Section 26A on behalf of a firm, and application is made for registration of the firm as constituted under such instrument, a question may arise whether the instrument is intended by the parties to have real effect as governing their rights and liabilities inter se in relation to the business, or whether it has been executed by way of pretence in order to escape liability for tax and without intention that its provisions should in truth have effect as denning the rights of the parties as between themselves. To decide that an instrument is in this sense not genuine is to come to a finding of fact; whether there was evidence on which it was open to the Income Tax authority to come to such a decision is a question of law. Their Lordships do not understand that this is the question of law which the Commissioner by the case stated has intended to refer, nor do they gather that he has arrived at any such finding of fact. The Commissioner has given an elaborate account of the returns, contentions and correspondence connected with the assessments made on the profits of this factory since the year 1918. But the substance of the case stated by him comes in the end to this, that the factory has until recently belonged to the joint family and has been assessed as such; that the members of the family now purport to have carried out an oral "partition " of this particular asset, and have executed the partnership agreement of February 12, 1933. As to this, the assessees make an alternative case. First, that the factory was the fathers self-acquired property, and he can alienate it as he likes. Assuming that to be correct, the Commissioner says, no question of "partition" arises, but the alienation of immovable property can only be made by a proper deed of transfer as required by the Transfer of Property Act. Secondly, the assessees say in the alternative that the property was joint family property; that no written instrument is necessary for a partition of joint property; and that the transaction in this case was a partition at the hands of the father. To this the Commissioner replies that the shares allotted to the members were not the shares to which they were entitled on partition; hence "the alleged transaction "is not a partition in law." In this way, without deciding whether the factory was self-acquired or joint family property, and without coming to any findings of fact as to the fathers powers under the customary law, the Commissioner concludes that the question propounded by him should be answered in the negative. His reason is that "the sugar factory continues "to occupy the same position and status in the eyes of the "law as it had before, and the steps taken by the assessees "to bring about a change are not legally admissible." 1

2. The High Court in their judgment proceed, as the Com- missioner had done, hypothetically--on the hypothesis of self-acquisition, and then on the hypothesis of joint family property. The first contention of the assessees was that no immovable property had been alienated or divided by the father, the shares of the wife and sons being shares in the machinery and other movables belonging to the business, but not in the factory buildings or the land on which these stood. It was emphasized that in the partnership agreement of February 12, 1933, there is no mention of buildings--a contention which has been repeated before the Board. Their Lordships agree with the High Court in rejecting this construction of the agreement. It contains no reference to any stipulation for a tenancy of any kind, or for leave and licence on any terms. The land and buildings and the right to use them were essential constituents of the factory, and though the agreement does not purport to be itself the transfer of any property or interest from the father to the other members, it does purport to express the terms on which the parties after such transfer had agreed to carry on business as a firm. Their Lordships think that it was an essential feature of the partnership agreement as expressed in the instrument of February 12, 1933, that the wife and sons had a share in the immovables.

3. On this view the High Court had no difficulty in agreeing with the conclusion arrived at by the Commissioner on the hypothesis that these immovables were self-acquisitions of the father. On the hypothesis that they were joint family property, however, they were bound to disagree with his view that the alleged transaction could not be a partition because the shares were not in accordance with the parties legal rights. Indeed, this argument was not maintained before the High Court, but an argument based on Section 25A of the Act was put forward instead on the Commissioners behalf. The High Court accepted this new contention, and was thus prepared to answer the question referred in the negative on the hypothesis of joint family property as well as on that of self-acquisition by the father. The new contention has been maintained before their Lordships and must now be examined. [Having referred to Section 25A, Sub-sections 1, 2 and 3, his Lordship continued:] On this section the contention of the Commissioner is that for the purposes of the Income Tax Act members of an undivided Hindu family cannot enter into a partnership in respect of a portion of the joint property which they have partitioned among themselves. But, in their Lordships view, Section 25A contains no warrant for any such prohibition. It has no reference at all to any case in which the Hindu undivided family remains in existence at the time of assessment. No difficulty whatever in the assessment of a Hindu undivided family is caused--or was ever thought to be caused--by the facts that in one year it has certain assets and certain income therefrom and that in the next year it is found to have parted with one asset and to be no longer in receipt of the same income. The same assessee has a different income in each year--that is all. It matters nothing whether the particular asset no longer possessed by the undivided family has become the separate property of a member or belongs to a stranger. Section 25 A is directed to the difficulty which arose when an undivided family had received income in the year of account but was no longer in existence as such at the time of assessment. The difficulty was the more acute by reason of the provision--an important principle of the Act--contained in Section 14, Sub-section 1: "The tax shall not be payable by an assessee in respect of any "sum which he receives as a member of a Hindu undivided "family."

4. Section 25A deals with the difficulty in two ways, which are explained by the rule, applicable to families governed by the Mitakshara, that by a mere claim of partition a division of interest may be effected among coparceners so as to disrupt the family and put an end to all right of succession by survivorship. It is trite law that the filing of a suit for partition may have this effect, though it may take years before the shares of the various parties are determined or partition made by metes and bounds. Meanwhile the family property will belong to the members as it does in a Dayabhaga family--in effect, as tenants in common. Section 25A provides that if it be found that the family property has been partitioned in definite portions, assessment may be made, notwithstanding Section 14, Sub-section 1, on each individual or group in respect of his or its share of the profits made by the undivided family, while holding all the members jointly and severally liable for the total tax. If, however, though the joint Hindu family has come to an end it be found that its property has not been partitioned in definite portions, then the family is to be deemed to continue--that is to be an existent Hindu family on which assessment can be made on its gains of the previous year.

5. With all respect to the learned judges of the High Court, they appear to have mistaken the effect of the previous decision of that court with which they express agreement: Biradhmal Lodha v. Commissioner of Income Tax (1933) I.L.R. 56 A. 504. The section has nothing to say about any Hindu undivided family which continues in existence, never having been disrupted. Such a case is outside Sub-section 3 because it is not within the section at all. No sub-section is required to enable an undivided family which has never been broken up to be deemed to continue. But it need not have the same assets or the same income in each year, and it can part with an item of its property to its individual members if it takes the proper steps.

6. The result is that the reasons given by the High Court do a not justify a negative answer to the question referred. If the steps taken to vest in the wife and sons an interest in the immovable assets of the business were not legally effective, e.g., for want of a registered instrument of transfer, the negative answer would, in their Lordships view, be right, since the a wife and sons could not compel the father to perfect a voluntary transfer. But on the assumption that the factory land and buildings were joint family property it has not been shown that a partition at the hands of the father could not be effected without a written instrument. To answer the question of law which has been propounded by the Commissioner it is necessary to descend from the realm of hypotheses to the region of fact. The commissioner has taken pains to state some matters very fully, but he has not found the material facts as he should have done. It is necessary to know as regards (a) the business, machinery, plant and other movables, (b) the factory buildings and land, whether they were before 1931 the self-acquired property of the father, or his ancestral property, or joint family property, or whether they fall into some other and what category according to the customary law. It is necessary that the customary law of the family should be found as a fact so as to show what right, if any, the father had to partition or transfer the movable or immovable property above-mentioned, to whatever category it may be found to belong in whole or in part. The riwaj-i-am is evidence of the custom, but it is not conclusive, and a finding as to custom is required. When the rights of the members of the family have been ascertained, it will be necessary to ascertain whether in fact the father did at any time purport to give shares or interests in any of the above-mentioned property to his wife and sons. If so, at what time What shares did he give In what manner In what property Did he purport to be alienating his own property or effecting a partition of family property, or how otherwise Again, what agreement, if any, was made before February 12, 1933, and when, as to a partnership being constituted to carry on the sugar factory, and as to the assets which it was to have as a firm None of these essential facts have been found and stated by the Commissioner, with the result that the question referred cannot be answered until the High Court has exercised its powers under Sub-section 4 of Section 66 of the Act. Their Lordships leave it to the discretion of the High Court to specify the particular additions and alterations which the Commissioner should be directed to make.

7. They will humbly advise His Majesty that the judgment and decree of the High Court be discharged and the case remanded to the High Court for disposal after taking such action under Sub-section 4 of Section 66 of the Indian Income Tax Act, 1922, as the High Court may think fit in the light of this judgment. The respondent will pay the appellants costs of this appeal. The costs already incurred in the High Court will abide the order of the High Court at the final disposal of the reference.