2002 (12) TMI 214 - AT - Income Tax

HUF Members Jointly Liable for Tax: Tribunal Remands Assessment for Review

The Tribunal allowed the appeal regarding the assessment of capital gains in the hands of an HUF, holding that every member of the HUF is jointly liable ... Appealable Orders Issues:1. Assessment of capital gains in the hands of an HUF.2. Validity of assessment under section 144.3. Locus standi of the appellant to file the appeal before CIT(A).4. Merits of the case regarding grounds 2 to 5.Analysis:1. The appeal involved the assessment of capital gains in the hands of an HUF for the assessment year 1984-85. The appellant contended that the property in question was self-acquired by Mr. Laxmanrao Sathwane and should be assessed individually for capital gains. The CIT(A) questioned the locus standi of the appellant to file the appeal, stating that there was no finding that the appellant was a member of the HUF. However, the Tribunal held that the appellant fell within the definition of an 'assessee' under the Income-tax Act, as every member of the HUF is jointly liable for tax. The Tribunal allowed the appeal on this ground, citing relevant case law supporting the appellant's right to appeal.2. The assessment under section 144 by the Assessing Officer in the status of HUF was challenged on the grounds that no notice under section 139(2) was served on the HUF, making the assessment invalid. The Tribunal did not adjudicate on this issue but remanded the case to the CIT(A) to decide the merits of the grounds raised by the appellant regarding the assessment made under section 144. This issue remains unresolved pending further review by the CIT(A).3. The appellant raised concerns about the CIT(A) dismissing the appeal by questioning the locus standi of the appellant to file the appeal. The Tribunal found that the appellant had the right to appeal as an aggrieved party, as per relevant provisions of the Income-tax Act and supported by case law. The Tribunal directed the CIT(A) to decide the appeal on merits after providing an opportunity for the appellant to be heard, indicating that the issue of locus standi was resolved in favor of the appellant.4. Grounds 2 to 5 of the appeal focused on the merits of the case, including the legality and validity of the assessment made under section 144, the lack of opportunity given to the appellant before assessment, and the inclusion of the entire sale price for capital gains in the name of the HUF. The Tribunal did not address these grounds directly but instructed the CIT(A) to review and decide on these aspects after hearing the appellant. Therefore, the detailed analysis of these grounds is pending further examination by the CIT(A) as per the Tribunal's directions.