Amendment made by Finance (No. 2) Act, 1980. - Income Tax - 1521/CBDT

INSTRUCTION NO. 1521/CBDT Dated: July 29, 1983 In the cases of Apoorva Shantilal Shah (HUF)/Seth Gopal Dass (HUF) vs. Commissioner of Income-tax, reported in Taxman, Part I, Vol. 13, April, 1983, page-1, the Hon'ble Supreme Court has recently held that the right of the father to bring about the disruption of the joint family properties in exercise of his superior right as father or of his right as patria potest as is recognised in ancient Hindu Law; it is also well settled by judicial decisions that partial partition of a HUF qua some properties or qua some members is permissible and valid in law. The Supreme Court also held that, if the father, in exercise of his superior right or his right as patria potest as, can bring about a complete disruption of joint family properties of HUF consisting of himself and his minor sons even against the wishes of the minors and if partial partition is permissible with the consent of the sons when they have all become majors, there is no reason to limit the power or authority of the father to effect the partition only if it is total. Thus it has consequently been held by the Hon'ble Supreme Court that partial partition of properties brought about by the father between himself and his minor sons cannot be said to be invalid under the Hindu Law and must be held to be valid and binding. The Supreme Court, however, added that such a partition whether affected in exercise of his superior right as father or his right as patria potest as is subject to the right of the sons to challenge the partition by way of appropriate proceedings if the partition is not fair and just. 2. The said judgement has settled one of the judicial controversies that was pending before the Supreme Court. The ratio of this judgement will, however, be applicable to assessments upto the assessment year 1979-80, since the amendment made by the Finance (No. 2) Act, 1980, has statutorily de-recognised, for the purposes of the income-tax Act, partial partition effected after 31st December, 1978. This amendment has been made effective from the assessment year 1980-81 and onwards. 3. The above clarifications may please be brought to the notice of the field officers working under you.