TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 408
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....i A.R.Pandurangan's wife later died on 08.02.2006 leaving behind their three sons and a daughter as the sole surviving legal heirs. At the time of death of the father and mother,an agricultural land measuring an extent of 6.28 acres in Ayanambakkam village and a house on a 8 ground of lands situated at Ayanambakkam village was available for being partitioned. 3. It is the case of the petitioner that the brothers and sisters entered into oral partition and recorded the same in a Memorandum on 23.08.2007 recording the aforesaid oral partition. Share in the agricultural property was divided in certain proportion and that land to an extent of 3 acres out of 6.28 acres was sold and the sale proceeds was shared by each of the legal heirs of the Late Shri.P.R.Pandurangan. They also filed their respective Income Tax returns and claimed exemption under Section 54 F of the Income Tax Act, 1962 i.e. Exemption from payment of long term capital gain. 4.It is further submitted that each of the legal heirs of late Shri.A.R.Pandurangan filed their respective Income Tax Returns in their own capacity as individual and not as members of any HUF, pursuant to the memorandum recording the aforesa....
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....ere was only a joint sale of property and there was no new ownership by the coparceners and the property and income was assessable in the hands of lateA.R.Pandurangan, (HUF), the said order was set aside by the Tribunal. 11.It is submitted that though the original assessment made on 15.12.2010 allowing deduction under section 54F of the Income Tax Act, 1961 was held erroneous and had caused prejudice to the revenue and the original assessment was set aside the matter was remitted back to the original authority to pass a fresh assessment order, the said order dated 22.8.2014 passed by the Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961. 11A.The Appellate Tribunal vide its order 27.11.2015 in ITA No. 2702/Mds 2014 allowed the appeal filed by the petitioner's brother Shri.A.P.Began with the following observations:- 7. Heard both sides. Perused orders of lower authorities and the material on record. The Commissioner of Income Tax passed order under Section 263 setting aside the assessment directing the Assessing Officer to disallow deduction allowed under Section 54F of the Act in the hands of the assessee. The Commissioner of Income Tax was of the view tha....
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....ed." 12. It is submitted that before the order was passed by the Tribunal on 27.11.2015, the impugned notice dated 31.03.2015 was addressed to Estate of A.R.Pandurangan (HUF) Coparceners: Sri A.P.Oree, Sri A.P.Began, Sri A.P.Nambi and Smt.A.P.Nangai 3-A, Anakara Apartment, Gilchrist Avenue, Harrington road, Chetpet, Chennai 600 031. The deponent of the affidavit Shri.A.P.Oree and receipient of the impugned notice therefore sent a letter dated 22.04.2015 to the respondentto clarify as to the basis of notice dated 31.03.2015that was issued to "the Estate of A.R.Pandurangan (HUF) Coparceners: Sri A.P.Oree, Sri A.P.Began, Sri A.P.Nambi and Smt.A.P.Nangai 3-A, Anakara Apartment, Gilchrist Avenue, Harrington road, Chetpet, Chennai 600 031." It is further submitted that notice dated 31.03.2015 was dispatched after 31.03.2015 and therefore the impugned notice under Section 148 would be clearly time barred. It is submitted that notice was issued in the name of A.P.Oree as kartha rather than estate of A.R.Pandurangan. The subsequent notice dated 07.05.2015 addressed to 26AA was neither received in time nor can be justified in the light of the Tribunal order on merits which has been extracte....
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....e brothers viz., Shri.A.P.Began vide order dated 27.11.2015 in I.T.A.No.2702/Mds/2014, the Department is in appeal before this Court in TCA.No.714 of 2016. 17.In any event, the petitioner can make such submissions before the respondent before Assessment Order is passed. It is further submitted that notice was also received in time by the notice in his capacity as the kartha of the HUF and therefore prayed for dismissal of the present Writ Petition. 18.The learned counsel for the petitioner relied on the decision of this Court in Alamelu Veerappan vs. The Income Tax Officer, Non Corporate Ward 2(2), Chennai, W.P.No.30060 of 2017. 19.The learned counsel also drew my attention to Section 114 of the Income Tax Rules which reads as under: " Where the total income of an assessee, not being a company, includes any interest on National Savings Certificates (First Issue), the tax payable by him on his total income shall be- (a) the amount of incometax payable on the total income as reduced by the amount of such inclusion, had the total income so reduced ". 20.I have considered the arguments advanced by the learned counsel for the petitioner and the learned counsel for the respondent, ....
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....te which had already expired on 31.3.2015. In the impugned order/communication dated 16.11.2016, a content of communication dated 7.11.2016 of the Seniors Superintendent of Post Office, Chennai City, North Division Chennai 600008 addressed to the respondent has been extracted. 29.It merely states that the request of the respondent Department regarding delivery of the post had been forwarded to the Manager, National Sorting Hub Chennai, Chennai 600016 from whom, the respondent may kindly wait for further communications. However, no further communication has been filed. 30.The counter filed by the respondent is alsosilent on the same. Therefore, on this preliminary ground itself the writ petition is to be allowed as the impugned notice appears to be prima facie booked for delivery beyond the period of limitation. 31.However, it is also noticed that no serious objection was raised on this ground at the earliest occasion by Mr.A.P.Oreewhen the first representation dated 22.4.2015 was sent to the respondent seeking an explanation as to the basis on which the impugned notice dated 31.3.2015 had been issued. Therefore, on limitation, this Court is inclined to answer the issue against ....
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....r and if satisfied, the Income Tax Officer would record a finding that there has been such partition of the joint family property and the assessment of the total income of the joint family would then be made as if no such partition had taken place. And in such a case all the members would be jointly and severally liable for the tax assessed as payable by the joint family and for determining their several liability, the tax assessed on the joint family would be apportioned among the members "according to the portion of the joint family property allotted to" each of them. But it may happen that at the time of a making assessment under Section 143 or 144 no claim of partition, total or partial, is put forward on behalf of any member of a Hindu family, either because no such partition has taken place or because of inadvertent or deliberate omission on the part of the members of the Hindu family and where that happens, the Hindu family would continue to be assessed as a Hindu undivided family and the tax determined as payable by it would be recoverable only out of the joint family properties and no member would be personally liable for any part of the tax, even though an order recording....
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....total or partial has taken place among the members of the HUF, the Income Tax Officer is required to make an inquiry after giving notice to all the members of the family, and to record findings on the question of partition. If on inquiry he comes to the finding that there has been partition, individual liability of members is to be computed according to the portion of the joint family property allotted to them. What would amount to partition for the purposes of the section is contained in the Explanation to the section which defines partition as under: "Explanation.- In this section,- (a) 'partition' means- (i)where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition; or (ii)where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition." 38.The Apex Court was of the opinion that sub-section (6) of Section 171 thus, for the first time, imposed a kind of joint and several liability on the members of....
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....a view to safeguard the interest of the revenue. Any assessee claiming partition of HUF must prove the disruption of the status of HUF in accordance with the provisions of Section 171 having special regard to the Explanation. The assessee must prove that a partition effected by agreement or through court's decree, was followed by actual physical division of the property. In the absence of such proof partition is not sufficient to disrupt the status Hindu Undivided Family for the purpose of assessment of tax. 39. A reading of sub- section 171 of the Income Tax Act, 1961 makes it very clear that it is applicable only where a Hindu family was already assessed as an Hindu Undivided Family(HUF). Otherwise, there is no meaning to the expression "hither to" in Section 171(1) of the Income Tax Act, 1961. It shall for the purpose of the Act be deemed to continue to be a Hindu Undivided Family, except where and insofar as a finding of partition has been given under the said section in respect of the said Hindu Undivided Family(HUF). 40.Admittedly, during the lifetime of Shir.A.R.Pandurangan, the family was not assessed as a Hindu Undivided Family(HUF). 41.It is only where there is a p....