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TMI Blog1990 (9) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... e of assessment of tax. Under the Hindu law, members of a joint family may agree to partition of the joint family property by a private settlement, agreement, arbitration or through court s decree. Members of the family may also agree to share the income from the property according to their respective shares. In the instant case, there was no dispute that, prior to the assessment year 1967-68, the assessment was made on the Hindu undivided family of which the respondent was a member. The respondent, for the first time, raised the plea of partition and disruption of Hindu undivided family in the proceedings for the assessment years 1967-68, 1968-69 and 1969-70. There was no dispute before the Income-tax Officer that there had been no physical division of the properties by metes and bounds and, therefore, the Income-tax Officer was justified in holding that the status of Hindu undivided family had not been disrupted, and the income derived from the properties for the purposes of assessment continued to be impressed with the Hindu undivided family character. The High Court, in our opinion, committed an error in quashing the order of the Income-tax Officer. In the result, we allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt merely conferred a right on the members of the family to separate possession of the land falling to their share after the physical partition, and the final partition could be made on application made by individual members after depositing the Commissioner's fee. Since the civil court decree was a preliminary decree and no final decree had been passed and no actual partition had been effected and no physical partition by metes and bounds had taken place in pursuance of the decree of partition, the status of a Hindu undivided family-continued for purposes of assessment. The Income-tax Officer observed that, earlier, the assessee was assessed in the status of Hindu undivided family, and since no other evidence except the decree of the civil court had been produced by her to show that there has been real partition, the assessee's claim for partition could not be accepted. The respondent filed a writ petition in the High Court under article 226 of the Constitution for quashing the orders of the Income-tax Officer on the ground that he failed to recognise the disruption of the Hindu undivided family while making the assessment. A learned single judge of the High Court allowed the wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordance with the section. The section further provides that, if any person, at the time of making of assessment, claims that a partition, total or partial has taken place among the members of the Hindu undivided family, the Income-tax Officer is required to make an inquiry after giving notice to all the members of the family, and to record findings on the question of partition. If, on inquiry, he comes to the finding that there has been a partition, the individual liability of the members is to be computed according to the portion of the joint family property allotted to them. What would amount to partition for the purposes of the section is contained in the Explanation to the section which defines partition as under: "Explanation. -In this section, (a) 'partition' means (i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without physical division of the property producing the income shall not be deemed to be a partition ; or (ii) where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of any such proof, the Hindu undivided family shall be deemed to continue for the purpose of assessment of tax. Any agreement between the members of the joint family effecting partition or decree of the court, for partition cannot terminate the status of a Hindu undivided family unless it is shown that the joint family property was physically divided in accordance with the agreement or decree of the court. On behalf of the, respondent, it was urged that the High Court has placed reliance on a Full Bench decision of the Kerala High Court in Parameswaran Nambudiripad V. IAC of Agrl. IT [1969] 72 ITR 664, where it was held that if the Hindu undivided family was, in fact, not in existence during any part of an accounting period, and the Hindu undivided family as such had not received any income, the family could not be assessed to tax as Hindu undivided family. The view taken by the Full Bench has been approved by this court in IAC of Agrl. I. T. and S. T. v. Poomulli Manekkal Parameswaran Namboodiripad [1972] 83 ITR 108. On a careful scrutiny of the judgment of this court, we find that, in that case, the interpretation of section 29 of the Kerala Agricultural Incometax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction introduced under section 171 of the Act could not be extended to create tax liability on the Hindu undivided family even after disruption of its status, pursuant to the civil court's decree for partition. We do not consider it necessary to discuss those decisions, as the purpose and object of section 171 and the extent of the legal fiction introduced by it has already been considered by this court in Kallpoomal's case [1980] 133 ITR 690. The view taken by the High Court under the impugned judgment is not sustainable in law as it is contrary to that decision. In Sankaranarayanan Bhattathiripad v. ITO [1985] 153 ITR 562, a learned judge of the Kerala High Court, while considering the interpretation of section 171, held that the view taken by the High Court in the judgment under appeal in ITO v. Smt. N. K. Sarada Thampatty [1976] 105 ITR 67 (Ker), ceased to be good law in view of the decision of this court in Kalloomal's case [1982] 133 ITR 690. In the instant case, there was no dispute that, prior to the assessment year 1967-68, the assessment was made on the Hindu undivided family of which the respondent was a member. The respondent, for the first time, raised the plea of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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