9911796707
TMI Blog1984 (6) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ad Prakash, Santosh Kumar and Satish Kumar. As a result the capital which came to be allotted to each of the five persons amounted to Rs. 29,560. There was an enquiry under section 171 of the Income-tax Act, 1961 ('the Act') and an order was also passed by the ITO under that section on 28-8-1976 accepting the said partial partition. Babulal Nema continued as a partner in the above firm, but with his capital restricted to Rs. 29,560. Urmila Bai and the three sons of Babulal Nema opened deposit accounts with their respective allotted shares, in the firm itself, becoming entitled to interest thereon. It may be noted here that the relevant previous year for this appeal before us ended on Diwali 1974. 2. For this assessment year 1975-76, Babul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the smaller HUF of Babulal now comprised himself, as karta, his wife, Urmila Bai, and his two daughters. This return disclosed share income from the firm aforesaid at Rs. 25,439 and annuity deposit refund of Rs. 150. It was noted on page 1 of the return that the original return had been filed on 30-7-1975 [evidently there is a mistake here. The assessment records do show a return filed on 30-7-1975 in the status of HUF but that return was the return of the bigger HUF of Babulal Nema and his three sons as coparceners disclosing only an income of Rs. 100 from self-occupied property. Adding a delicate touch of chaos to this situation already rich in confusion is the fact that both the bigger HUF's return, as well as the smaller HUF's ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued a notice under section 148 of the Act on 5-9-1979. He had also recorded the reason for issuing such a notice on 3-2-1979. This is to the effect that while the professional income of Babulal Nema, individual, had been assessed to tax by the ITO, share income from the firm Gaya Prasad Ayodhya Prasad Nema in the status of HUF (smaller) had altogether escaped assessment and for which income no valid return had been filed till 3-2-1979. Accordingly, the ITO issued the notice under section 148 and the assessee (smaller HUF) filed a return under protest. In its letter dated 15-2-1979 it pointed out that this smaller HUF had already filed a return on 15-9-1977 disclosing the share income of Rs. 25,439 from the firm and the annuity deposit refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er HUF on 15-9-1977 which is available on file showing the income from the firm Gaya Prasad Ayodhya Prasad Nema as well as annuity deposit. Therefore, the notice issued by the ITO on 5-2-1979 under section 148 as well as the assessment made by him in pursuance of the above notice will be quashed by me." He also went into the question of the person in whose hands the share income from the firm disclosed by the smaller HUF was assessable. According to him, the correct position in law was : where there is a partition between the karta, his wife and his three sons, the property received by the karta on such partition would be that of the karta as an individual. In other words, the AAC held that the share income from the firm had to be assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's appeal should have been simply allowed, the impugned assessment under section 147(a) being quashed. Instead of stopping there, the AAC went on to consider the question of the person in whose hands, according to the AAC, the share of income to the extent of 20 per cent noted above should be taxed. This was wholly unwarranted in law. Quite apart from this, even on the merits of this independent question, the AAC had gone wrong in relying on the ratio of the decision of the Madhya Pradesh High Court in Jeetmal Nagori of Neemuch v. CWT [MCC No. 75 of 1979 dated 5-2-1981]. The AAC did not have the benefit of the later decision of the Madhya Pradesh High Court in the case of CIT v. Krishna Kumar [1983] 143 ITR 462. This was a Full Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Indian Income-tax Act, 1922 that where the appellate authority sets aside the assessment of an HUF, it may give a direction for taking proceedings against a member of the family---Dhiraj Mal v. CIT [1971] 79 ITR 242 (All.). Apart from all this is the point that an objection to such a finding or direction would arise where an assessment is raised on the person concerned, following the said finding and direction. He would be the person aggrieved and it could be said that it would be for that person to raise objections to the legality of that finding and direction. In this case, such person would be Babulal Nema, the individual. So far as the present assessee is concerned, we do not see that it is or can be said to be aggrieved in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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