1982 (1) TMI 87 - AT - Income Tax

Summary

Issues:
Validity of partial partition claim under section 171 of the IT Act, 1961 for the assessment year 1977-78.

Analysis:
The appeal was filed by the assessee against the order of the AAC dated 24th May, 1980, regarding the rejection of the claim of partial partition made by the assessee under section 171 of the IT Act, 1961, for the assessment year 1977-78. The assessee, previously assessed as a Hindu Undivided Family (HUF), claimed a partial partition on 31st March, 1977, supported by a partition deed involving the Karta, his wife, and minor sons. The Income Tax Officer (ITO) rejected the claim, citing the judgment of the Madhya Pradesh High Court in a similar case. The AAC upheld the ITO's decision, leading to the appeal.

The counsel for the assessee argued that there is no legal impediment for the father, acting as patria potestas, to effect a partition of HUF assets, as supported by judgments from the Punjab and Haryana High Court and the Calcutta High Court. The counsel contended that the partition deed of 31st March, 1977, was valid and acted upon by the parties involved. On the other hand, the Revenue relied on the ITO's judgment and highlighted a distinction in another case where the mother of the Karta was alive, affecting the claim for a share. The Revenue argued that only coparceners can challenge the validity of a partition, not the Revenue.

The Appellate Tribunal, after considering the arguments, held that the authorities erred in rejecting the claim of partition based on the deed of 31st March, 1977. The Tribunal noted that the Karta acted on behalf of the minors and himself in the partition deed, making it valid. Referring to previous judgments, the Tribunal concluded that a partition by the father, acting as patria potestas, with minor coparceners is legally valid. Therefore, the Tribunal allowed the appeal and directed the ITO to accept the claim of partial partition made by the assessee.

In conclusion, the Appellate Tribunal overturned the decisions of the lower authorities and allowed the appeal, directing the Income Tax Officer to accept the claim of partial partition made by the assessee based on the valid partition deed of 31st March, 1977.