Statutory inquiry before HUF assessment: failure to verify claimed partition invalidates assessment and permits fresh assessment directions.

A statutory inquiry under section 25A(1) was a condition precedent where a Hindu undivided family claimed partition after being assessed as undivided. An assessment completed without that inquiry was procedurally illegal and liable to be set aside in appeal, because section 25A(3) treated the family as continuing to be undivided until the required order was recorded. The appellate authority was not limited to cancellation alone; unless the statute expressly prohibited it, it could direct the assessing officer to make fresh assessments so the matter could be concluded in accordance with law.

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Issues: Whether an assessment of a Hindu undivided family made without holding the inquiry into a claimed partition required by section 25A(1) was valid, and whether the appellate authority, while setting aside such an assessment, could and should direct the assessing officer to make fresh assessments in accordance with law.

Analysis: Section 25A(1) required the Income-tax Officer to make an inquiry when a partition was claimed by or on behalf of a member of a Hindu family hitherto assessed as undivided, and section 25A(3) treated the family as continuing to be undivided until the required order was recorded. Where the claim was made in time and the assessment was completed without the prescribed inquiry, the assessment suffered from a clear procedural illegality and was liable to be set aside in appeal. The appellate authority was not confined to cancelling the assessment; it had power and duty to correct the error and, unless the statute forbade it, to issue appropriate directions so that the matter could be disposed of afresh according to law.

Conclusion: The assessments were invalid and had to be set aside, and the Tribunal should have directed the Income-tax Officer to make fresh assessments in accordance with law.

Final Conclusion: The assessee succeeded on the invalidity of the assessments, but not on the contention that the Tribunal could merely cancel them without further direction; the matter had to go back for fresh assessment after compliance with the statutory inquiry.

Ratio Decidendi: When a statutory inquiry is a condition precedent to assessment, failure to hold that inquiry renders the assessment liable to be set aside in appeal, and the appellate authority may direct a fresh assessment unless the statute expressly bars such a course.

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