Partition recognition and fraudulent transfer rules kept HUF properties exposed to tax recovery despite alleged separation arrangements.

A Hindu joint family was treated as partitioned only in April/May 1957, because the alleged 1953 oral partition was not proved and contemporaneous documents and tax returns negatived it. The omission to record or enquire into partition under section 25A of the Indian I.T. Act, 1922 did not render the assessments void or open them to collateral challenge; the family continued to be treated as an undivided HUF for assessment and recovery until a duly recognised partition. Sale and trust deeds were found to be unreal arrangements intended to defeat revenue recovery, so the properties remained liable to attachment and sale for the family's tax dues.

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Issues: (i) Whether the alleged partition of the Hindu joint family took place in 1953 or only in April/May 1957, and whether it was recognised for income-tax purposes; (ii) Whether the assessments made on the family for the relevant assessment years could be treated as void or ineffective for want of an enquiry or order under section 25A of the Indian I.T. Act, 1922; (iii) Whether the sale deed and trust deed were genuine transfers so as to prevent attachment and sale of the suit houses for recovery of the family's tax dues.

Issue (i): Whether the alleged partition of the Hindu joint family took place in 1953 or only in April/May 1957, and whether it was recognised for income-tax purposes.

Analysis: The oral evidence did not establish a partition in May 1953. The contemporaneous documents, especially the registered partition deed, treated the family as joint and negatived any prior oral partition. The income-tax returns and related statements also showed that earlier claims of separation were not pursued and that the partition was later stated to have taken place in May 1957. The Court therefore treated the family as having been completely partitioned only in April/May 1957.

Conclusion: The alleged 1953 partition was not proved; the partition was found to have occurred only in April/May 1957.

Issue (ii): Whether the assessments made on the family for the relevant assessment years could be treated as void or ineffective for want of an enquiry or order under section 25A of the Indian I.T. Act, 1922.

Analysis: For the relevant years, no effective claim for partition was shown before the income-tax authorities in the manner required to displace the statutory treatment of the family as undivided. The omission to enquire into or record a partition did not render the assessments void or open to collateral attack in a civil suit. The statutory fiction under section 25A continued to operate until a partition was duly recognised, and it extended to recovery proceedings as well.

Conclusion: The assessments were not void, and the family was liable to be treated as an HUF for tax recovery purposes.

Issue (iii): Whether the sale deed and trust deed were genuine transfers so as to prevent attachment and sale of the suit houses for recovery of the family's tax dues.

Analysis: The circumstances showed that the sale was not a real transfer of beneficial ownership. The purchaser knew of the outstanding tax liability, the property remained with the family in substance, and the later trust deed disclosed that the arrangement was intended to keep the properties within the family while shielding them from the revenue. The Court held that the documents were devices to defeat recovery and attracted the prohibition against fraudulent alienation of tax-recovery assets.

Conclusion: The sale deed and trust deed were held to be unreal and ineffective against the Revenue, and the houses remained liable to attachment and sale.

Final Conclusion: The family remained assessable and recoverable as an HUF for the relevant tax dues, and the properties could be proceeded against in recovery notwithstanding the alleged transfer arrangements.

Ratio Decidendi: Until a partition is duly recognised under the governing tax machinery, the family and its properties continue to be treated as undivided for assessment and recovery purposes, and transactions devised to defeat revenue recovery are ineffective against the Revenue.

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