TaxTMI 
TaxTMI 
1997 (7) TMI 67
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....mbers of the family ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the partial partition between the two groups effected on January 1, 1971, was valid under the Hindu law ?" The facts recorded in the statement of facts by the Appellate Tribunal are that the assessee is a Hindu undivided family, headed by Shri Shrawan Kumar Swarup as its karta. Smt. Asha Kumari Swarup is the wife of the karta and they had two minor children, namely, Harish Kumar Swarup and Nandita Swarup, The karta by virtue of powers and rights vested in him, voluntarily and with the consent of other members of the family, effected a partial partition in respect of the share capital and rights in the p....
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...... On a perusal of the assessment records I found that the partial partition made by the assessee by dividing the interest of the Hindu undivided family in the firm of Sharwan Cold Storage and General Mills and the capital invested therein was not according to law. Not that the Hindu undivided family was not entitled to make a partial partition, but the partial partition should have been made defining the share of each and every person entitled to get the share. Instead of doing that, the share in the firm has been divided in two groups, viz., one consisting of Sharwan Kumar Swarup and his minor daughter, Kumari Nandita Swarup, and the second group consisting of Smt. Asha Kumari Swarup and her minor son, Harish Kumar Swarup. The shares of t....
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....nly on Shri Brahm Swaroop and no notices were served on other members of the family before initiating proceedings under section 263(1) of the Act of 1961. Therefore,... we hold that the order of the Commissioner of Income-tax under appeal is bad in law and is without jurisdiction, as no notice was served on the other members of the family." On the merits, the Tribunal held that after partition, members of each group held the property as tenants-in-common. "The shares were obviously 1/4th each and no further defining thereof was necessary... In the present case, the partial partition was both in respect of persons constituting the Hindu undivided family and the properties belonging to the Hindu undivided family... it is absolutely clear f....
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....aw that an order from which civil consequences flow, cannot be cancelled, unless due opportunity of being heard is given to the persons affected by cancellation. The order under section 171 was passed by the Assessing Officer qua the members of the family as well. Cancellation of that order will affect such members of the family and, therefore, service of notice on each such member of the family was essential. After disruption of the Hindu undivided family, though partially, each member of the family was entitled to notice before the order passed under section 171, is interfered with by the Commissioner of Income-tax. A similar view was taken by the Andhra Pradesh High Court in the case of T. G. Sulakhe v. CIT [1960] 39 ITR 394, while....