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TMI Blog2017 (10) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... y to law. No individual/Karta is authorized to appropriate and show the income of the HUF in his hands, debarring the other co-parceners of their right claim to the share of HUF properties/assets/income. Effort was thus made by the assessee to tax the HUF u/s.144A, but was declined by the Id. JCT. Luckily the IDS came into operation and taking advantage of the same, the two HUFs filed a declaration before the Commissioner of Income Tax, Noida declaring the interest on enhanced compensation and paid the tax as per pages 11-23 of the paper book. Obviously this evidence being subsequent could not be filed either before the AO or the Id. CITA, although the fact of offer made before the JCIT u/s.144A has duly been discussed by both. Thus the factual reason to disallow the claim of the HUF is that no such return was filed and no such tax had been paid by the HUF. The issue gets settled by the payment of taxes by the HUF through the declaration made before the Pr. CIT under IDS, which has been accepted, as all taxes have been paid. Therefore, in such circumstances, and facts of the case, since the HUF has already paid tax due alongwith interest, etc and correct share had been declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was not liable to tax under section 10(37) of I. T. Act, 1961 and the family had no other income. 6. That the learned Commissioner of Income tax (Appeals) has erred in law and on facts that on account of death of Rameshwar Dayal Tyagi on 17th October, 2007, three smaller HUFs came into existence that of his three sons viz. Ashwani Kumar, Naveen Kumar and Rajeev Kumar and the interest on delayed payment of compensation of Rameshwer Dayal Tyagi (HUF) was released/distributed/paid to the three smaller HUFs (Coparcenaries). 7. That both the Id AO and the Id. CIT(A) have ignored that the order of partition of a joint hindu family can be passed by an Assessing Officer only where the HUF is assessed to income tax, and where the family has only agricultural income and not liable to income tax, no such order can be passed u/ s. 171 of the Act. 8. That the learned AO has erred on facts in law in bringing to tax in the hands of the Assessee individual a sum of ₹ 32,98,322/- (net of deduction u/s.57(iv)), gross amount of interest on delayed payment of compensation as allocated to the Naveen Kumar Tyagi, HUF, merely because the bigger HUF of Shri Rameshwar Dayal Tyagi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her properties and compensation received by the father in his HUF status and invested further in the various assets. (iii) That the interest income on delayed compensation amounting to ₹ 19826807- 1/3'd of ₹ 5948042) received by the assessee is belonging to the smaller HUF of the assessee. Ashwani Kumar Tyagi, HUF and is liable for taxes if any and not the assessee. (iv) That the assessee HUF was always existing after the demise of his father in 2007, as the smaller HUF but the income not being taxable, the returns were not being filed. (v) That the assessee had also not obtained the PAH of his HUF and therefore, the assessee individual PAN was used by the Noida Authority to deduct his tax which is actually belonging to the HUF of the assessee in respect of the interest income and the TDS. (vi) That the proceedings initiated in the case of the assessee assuming that the interest income on delayed compensation is belonging to the assessee is not correct and justified. In addition to above, lastly it is submitted that assessee has complete history and the High Court orders to substantiate his contentions. On going through the contents of abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y dated 16.10.2014, the assessee took U turn and started claiming interest belonged to HUF. Apart from directions issued by the .TOT,Range-2, Noida there is no ambiguity about the treatment of interest which was not disclosed in the return of income. Had the facility of 26AS not been there, the assessee would have escaped this income . Thought of creation of HUF comes in..picture when notice u/s 143(2) is served upon the assessee it is worth to mention that HUF is a separate entity under the provisions of Section 2(31) of the Income tax Act, 1961. This is in addition to an individual as separate taxable entity. No HUF has been formed neither it is paid or disclosed in me capacity of HUF hence it is taxable in individual capacity of the assessee. Moreover, as held in the case of Controller of Estate Duty Vs. Sheila Prasad, 143 1TR 458, it has been observed by the Hon ble Allahabad High Court that the bhumidari rights created u/s 18 of the U.P.Zamindari Abolition and Land Reforms Act were new rights and that such rights were not possessed by the deceased prior to the conferment thereof by the said Act, and that whatever right the deceased had in such property in his capacity as kart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he UP Zamidari Abolition and Land Reforms Act, 1950, ignoring S.37, which clearly provides for treating the Jt. Hindu Family as a separate unit. The main crux of the case lay in the fact of non -payment of tax by the HUF, which has now been paid under the IDS, leaving no ground left for sustaining the addition on any account. None of the HUFs, having only agricultural income was filing any return of income under the Income Tax Act and was never assessed to tax, being not liable to tax. Thus the question of any ITO passing any order u/s.171 of the Act does not arise, nor is applicable to Agricultural families, having no income under the Income Tax Act. Non filing of returns under the Income Tax Act by the HUF was bonafide belief that agricultural income was not liable to tax under the Income Tax Act. What has been ignored/omitted is the fact that interest on enhanced compensation was taxable and the HUF should have filed its return of income for AY 2012-13, showing income from interest on enhanced compensation. The belief is bonafide and cannot in any manner be attributed to any malafide, merely because the individuals having their independent income from self acquired properties or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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