Constitutional validity of HUF partition assessment upheld: section 171 was found to be a non-arbitrary tax classification.

Section 171 of the Income-tax Act, 1961, which governs assessment of a Hindu undivided family after partition, was upheld as constitutionally valid under article 14. The classification was accepted because previously assessed Hindu undivided families that are later partitioned form a distinct tax class, and the provision applies uniformly to all members of that class. The court found the distinction neither discriminatory nor arbitrary, and consistent with permissible classification in taxation law.

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Issues: Whether section 171 of the Income-tax Act, 1961, which regulates assessment of a Hindu undivided family after partition, is violative of article 14 of the Constitution of India.

Analysis: The challenge was examined on the footing that Hindu undivided families previously assessed to tax and later partitioned form a distinct class for the purpose of tax assessment. The classification created by section 171 was held to be neither discriminatory nor arbitrary, since it treats all previously assessed Hindu undivided families that are partitioned alike and is consistent with the principles governing permissible classification in taxation matters.

Conclusion: Section 171 of the Income-tax Act, 1961, was upheld as constitutionally valid and not in violation of article 14 of the Constitution of India.

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