Retrospective effect of Section 25A permits treating declared partitions from an earlier date, enabling tax apportionment among members.

An order recognising a partition as having taken effect from an earlier date under Section 25A operates retrospectively as a legal fiction and thereby enables apportionment of tax among members under Section 25A(2); the order does not alter the assessment itself but permits allocation of the tax assessed on the undivided unit among allotted portions while preserving joint and several liability. Read with Section 23, retrospective recognition imports the corollary consequences of the declared state of affairs for assessment and collection, requiring apportionment in favour of the assessee where such earlier effect is recorded.

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Issues: Whether an order under Section 25A of the Income-tax Act recognising a partition as having been effected from an earlier date operates retrospectively for the purpose of assessments made earlier, thereby entitling apportionment of tax among members in accordance with Section 25A(2).

Analysis: Section 25A creates a procedural mechanism to deal with cases where a Hindu undivided family assessed as a unit is alleged to have partitioned; until an order under Section 25A(1) is recorded the family is deemed to continue undivided, but where an order is recorded recognising partition and specifying an earlier date of effect, that order operates by legal fiction from the date specified. Read together with Section 23, an order under Section 25A does not alter the assessment itself but enables apportionment of the tax assessed on the total income among the members according to their allotted portions, and preserves joint and several liability. Precedents and authority support treating retrospective orders or rules as effective from the date they are declared to take effect and importing the corollary consequences that would have flowed from the putative state of affairs.

Conclusion: An order under Section 25A recognising a partition as having taken effect from an earlier date is to be treated as effective from that date for all legal purposes relevant to assessment and collection; consequently apportionment under Section 25A(2) is required. The result is in favour of the assessee.

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