2017 (1) TMI 1033 - AT - Income Tax

Bringing the income to tax in the hands of HUF - Held that - We have noticed that the CIT(A) has given direction according to the facts of the case and in consequence of CIT(A) s order there is no liability or case pending against the assessee. As such there can be no grievance to the assessee. It is premature to adjudicate in the case of HUF . In the case of HUF, the issues that may arise are that the return of income was filed by the individual instead of HUF due to ignorance of law by the assessee and whether the reopening in the case of HUF was within the time limit. All these are the issues that may arise in the case of HUF before the AO and there cannot be any grievance to the assessee before us in these proceedings. Therefore, the present appeal is not maintainable. Accordingly, it is dismissed as not maintainable.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Assessment of capital gains in individual vs. HUF capacity.
3. Direction given by CIT(A) to assess income in HUF instead of individual case.

Analysis:
1. The appeal was filed with a delay of 9 days, citing reasons of ill health and dependency on son. The delay was condoned after assessing the reasons provided by the assessee, allowing the appeal for hearing.

2. The Assessing Officer noted discrepancies in property transaction details, treating a sale as a purchase, leading to assessment based on incorrect cost of acquisition. The CIT(A) observed that the property was HUF-owned, not individual, directing the AO to assess the income in HUF's capacity. The appeal challenged this direction, arguing against applying section 150 and citing a relevant legal case.

3. The CIT(A) directed the AO to assess the income in the hands of HUF, accepting the assessee's contention. The appeal contested this direction, claiming it cannot be given in the case of the assessee, as HUF and individual are distinct for tax purposes. The Tribunal noted the specific ground raised before CIT(A) and upheld the direction based on the facts of the case, dismissing the appeal as premature and not maintainable.

This judgment highlights the importance of timely filing of appeals, correct assessment of income in the appropriate capacity (individual vs. HUF), and the validity of directions given by appellate authorities in tax matters. The decision emphasizes the need for parties to raise specific grounds and legal arguments at each stage of appeal to address issues effectively and ensure proper adjudication.