Hindu undivided family partition and tax recovery: civil challenge barred, and a sham partition could not defeat creditor claims.

A Hindu undivided family was treated as continuing for income-tax purposes where no order recording partition had been made under section 25A, and the statutory remedy, not a civil suit, governed any challenge to assessment or recovery; the civil action was therefore barred. A partition deed executed after an adverse decree was found to be nominal, as the evidence showed no real disruption of the joint family and suggested an attempt to shield assets from creditors. Properties held in the father's control, including the disputed items, remained liable for pre-partition debts and tax dues and could be proceeded against in enforcement.

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Issues: (i) Whether a suit challenging income-tax assessment and recovery was maintainable in a civil court when no order recording partition had been made under the Income-tax Act; (ii) Whether the deed of partition dated 14 March 1947 was a real partition or a sham transaction, and whether the sons' shares and items 46 to 51 were liable to be proceeded against for the father's debts and tax liability.

Issue (i): Whether a suit challenging income-tax assessment and recovery was maintainable in a civil court when no order recording partition had been made under the Income-tax Act.

Analysis: The liability to tax arose when the income accrued, not when assessment was completed. Where a Hindu undivided family had received income and was subsequently disrupted, section 25A of the Income-tax Act created the machinery for recording partition and for apportioning liability, but in the absence of an order under section 25A(1) the family continued to be deemed undivided for the purposes of the Act. If the Income-tax Officer committed any error in assessing the family without making the inquiry contemplated by section 25A, the remedy lay within the statutory scheme, including appeal, and not by a civil suit. Section 67 barred a civil action to set aside or modify an assessment made under the Act.

Conclusion: The suit challenging the assessment and recovery was not maintainable in a civil court and the assessment could not be impeached in that manner.

Issue (ii): Whether the deed of partition dated 14 March 1947 was a real partition or a sham transaction, and whether the sons' shares and items 46 to 51 were liable to be proceeded against for the father's debts and tax liability.

Analysis: The surrounding circumstances showed that the partition deed was executed immediately after an adverse decree and was intended to shield property from creditors rather than to effect an actual division of the family estate. Nagappa continued to manage the properties, the family lived together, and the deed did not reflect a genuine disruption of the joint family status. As to items 46 to 51, the evidence failed to establish that they were purchased with funds supplied by the grandmother; on the contrary, the inference was that they were acquired with joint family earnings and in the father's control. On that footing, the properties remained liable to attachment and sale for the tax dues and the pre-partition debts.

Conclusion: The partition was a sham transaction, and the properties in question were liable to be proceeded against in enforcement of the debts and tax liability.

Final Conclusion: The challenge to the income-tax recovery failed, and the partition-based defence also failed, so the decree of dismissal stood in both matters.

Ratio Decidendi: Where a Hindu undivided family has not obtained an order recording partition under section 25A, the family is treated as continuing for income-tax purposes, civil suits to challenge the assessment are barred, and a partition found to be nominal will not defeat recovery from properties effectively remaining part of the family estate.

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