Recognised partial partition under tax law preserved HUF status; the department could not assess the family as an AOP.

Once a partial partition is recognised under section 171 of the Income-tax Act, the assessing authority cannot reclassify the family arrangement as an association of persons. The text notes that the bar in section 171(9), which de-recognised partial partitions, applies only to partitions effected after 31 December 1978. A partial partition made before that cut-off therefore remained outside the statutory prohibition, and the assessee continued to be assessable as a Hindu undivided family, not as an AOP.

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Issues: Whether, after recognition of a partial partition under the Income-tax Act, the assessee was to be assessed as a Hindu undivided family or as an association of persons.

Analysis: The partial partition had already been recognised by the Income-tax Officer under section 171 of the Income-tax Act, 1961. Once such recognition stood, the assessing authority could not unilaterally alter the assessee's status from HUF to AOP. The decision also noted that the legislative change in section 171(9) de-recognising partial partitions applied only to partitions effected after 31 December 1978, so the assessee's arrangement, having been made earlier, remained outside that prohibition.

Conclusion: The assessee was correctly assessable in the status of HUF, not AOP, and the Revenue's challenge failed.

Ratio Decidendi: Where a partial partition has been recognised under section 171 of the Income-tax Act, 1961, and the partition is outside the scope of the prospective bar in section 171(9), the department cannot disregard that recognition and assess the continuing family arrangement as an association of persons.

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