2009 (8) TMI 42

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....year 1999-2000, proposing to raise the following substantial questions of law: a. "Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal has erred in law in holding that provisions of Section 171(9) are not attracted in this case despite the fact that assessments for Assessment Years 1994-95 to 1998-99 had already been completed on 28.9.2000 whereas assessment for the year under consideration was completed much later on 23.3.2001." b. " As provided in Section 171(9) of the Income Tax Act, 1961 and the decision of Hon'ble Supreme Court in the case of M.V.Valliappan and others (238 ITR 1027), partial partition is not recognized under the provisions of Income Tax Act and can not be treated as a valid partition o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t a HUF which has not been hitherto assessed. But once the partial partition had been effected, and before that date no assessment had been made upon the assessee-HUF, then it must follow that the HUF falls under the category of a family not hitherto assessed and consequently it must be held that the section has no application. If the point of time at which it has to be determined whether the HUF has been hitherto assessed or not is to be taken with reference to any other date, for instance the date on which assessments were made for the earlier years as in this case, it would be open to the Assessing Officer to keep the assessment proceedings for the year under appeal (in which the issue arises) pending, issue notices of assessment or reas....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....al partition, the same related to period prior to partial partition. Once assessee was assessed as HUF, the said status continued. In M/s Tarlochan Singh (supra) the assessee had not been assessed for any period prior to partial partition. 6. Learned counsel for the revenue refers to judgment of Allahabad High Court in Commissioner of Income Tax v. Gyan Chand and Sons [2008] 303 ITR 267 wherein the assessee had been assessed in the capacity of HUF after the date of partition but for earlier period. Partial partition in that case had taken place on October 20, 1979 and the assessment of the assessee in the status of HUF took place in October, 1982 for the earlier assessment year i.e. 1978-79 and 1979-80. It was held that even though the a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e in respectful agreement with the view taken by the Allahabad High Court in Gyan Chand case (supra). The object of inserting clause (9) in Section 171 by Finance Act in pursuance of Finance Bill No.2 of 1980 was to do away with the concept of partial partition after December 31, 1978.  While considering the validity and background of this provision, the Hon'ble Supreme Court in Union of India and others v. M.V.Valliappan and others [1999] 238 I.T.R.1027 observed: "From the aforesaid section, it is clear that for the purposes of income tax, the concept of partial partition of the Hindu undivided family was recognized, but is done away with by the amendment which specifically provides that where a partial partition has taken place af....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 1.1.1979, cannot be recognized in respect of an assessee already assessed in the status of HUF, for the period prior to partition. Mere fact that assessment actually takes place on a date after the partition will not affect this position. 10. In the present case, the assessee having already been assessed in HUF status for the period prior to partition, had to be assessed in that status ignoring partial partition. The judgment of this Court relied upon in M/s Tirlochan Singh (supra) is distinguishable. 11. Accordingly, the substantial question of law whether partial partition could be recognized when assessee had already been assessed in the status of HUF for the period prior to the partition even if date of assessment was later to th....