9911796707
|
Home
Issues: Reopening of assessment under section 147(a) of the Income-tax Act and inclusion of interest income in the hands of the Hindu undivided family.
Reopening of Assessment under Section 147(a): The case involved the reassessment proceedings initiated by the Income-tax Officer for the assessment years 1965-66 to 1969-70 under section 147(a) of the Income-tax Act. The Income-tax Officer reopened the assessments on the basis that the assessee had not disclosed the complete details of the interest income accrued from the compensation amount received and divided between the coparceners. The Income-tax Officer contended that since there was no order under section 171 recognizing the partial partition between the coparceners, the entire interest income should be assessed in the hands of the Hindu undivided family. However, both the Appellate Assistant Commissioner and the Appellate Tribunal found that the assessee had disclosed all primary facts related to the receipt and division of the compensation amount, and therefore, the reopening of the assessments was deemed invalid. Inclusion of Interest Income in the Hands of the Hindu Undivided Family: The Tribunal held that the Income-tax Officer did not have jurisdiction to reopen the assessments under section 147(a) as the assessee had disclosed all primary facts during the original assessment. The Tribunal further determined that the entire interest income from the compensation amount could not be assessed in the hands of the Hindu undivided family without an order recognizing the partial partition under section 171 of the Income-tax Act. Citing the Supreme Court decision in Kalloo mal Tapeswari Prasad (HUF) v. CIT [1982] 133 ITR 690, it was emphasized that without a formal recognition of partial partition, the income should be assessed in the hands of the undivided family. As the reassessment proceedings were deemed improperly initiated, the question regarding the inclusion of interest income in the hands of the Hindu undivided family was not addressed. Conclusion: The High Court held that the reassessment proceedings were not validly initiated as the assessee had disclosed all relevant facts during the original assessment. Therefore, the first question regarding the jurisdiction of the Income-tax Officer to reopen the assessments was answered in favor of the assessee. Since the reassessment proceedings were deemed improper, the second question regarding the inclusion of interest income in the hands of the Hindu undivided family was not addressed. Consequently, the High Court ruled in favor of the assessee, and no costs were awarded in the case.
|
