1993 (9) TMI 20 - HC - Income Tax

Summary

Issues involved:
The issue involves the validity of directing the Income-tax Officer to pass an order under section 143(3) of the Income-tax Act following a partial partition under section 171 of the Act.

Summary:
The case pertains to a bigger Hindu undivided family that filed a return of income noting a partial partition where Rs. 50,000 was divided among coparceners. The Income-tax Officer rejected the claim under section 171(9) of the Act. The Appellate Assistant Commissioner upheld this decision. However, the Tribunal, considering a Madras High Court judgment declaring section 171(9) ultra vires, set aside the Appellate Assistant Commissioner's order and directed the Income-tax Officer to pass an order under section 171. The Revenue contended that a Karnataka High Court decision supported the validity of section 171, but the Court held that the Madras High Court's decision was the only relevant one at the time. Therefore, the Tribunal was correct in following the Madras High Court's judgment and directing the Income-tax Officer to consider the partial partition and pass an order under section 171 before section 143(3). The question was answered in favor of the assessee.