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TMI Blog1989 (1) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal is correct in law in holding that the firm constituted consequent on partial partition of the Hindu undivided family effected after December 31, 1978, has to be granted registration for the assessment year 1980-81 though such partitions are hit by the provisions of section 171(9) of the Income-tax Act ?" Sri Dalappa and his two sons, Mohan Rao and Jagadeswara Rao, constituted a Hindu joint family. They carried on a joint family business as cloth merchants till March 31, 1979. On that day, a partial partition was effected and the joint family business was divided among the father and two sons in certain specified shares. With effect from April 1, 1979, the father and two sons constituted a partnership and carried on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal also noted that Chapter XVI of the Act contains special provisions relating to firms and that section 182(1) opens with a non obstante clause "notwithstanding anything contained in sections 143 and 144", which words, according to the Tribunal, indicated that the said special provisions alone should govern the assessment of firms. Thereupon, the Revenue applied for and obtained this reference. Up to and inclusive of the assessment year 1979-80, the income derived from cloth business was assessed as the business income of the Hindu undivided family comprising Dalappa and his two sons. They effected a partial partition on March 31, 1979, which was also recognised and recorded by the Income-tax Officer under section 171 of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily shall be jointly and severally liable for any tax, penalty, interest, fine or other sum payable under this Act by the family in respect of any period, whether before or after such partial partition; (d) the several liability of any member or group of members aforesaid shall be computed according to the portion of the joint family property allotted to him or it at such partial partition ; and the provisions of this Act shall apply accordingly. 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 a physical division of the property producing the income shall not be deemed to be a partition ; or (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h partial partition has taken place. The law further declares that notwithstanding such partial partition, the family shall be deemed to continue and shall be assessed as a Hindu undivided family as if no partial partition had taken place. If any amounts are payable under the Act, the same shall be recovered from the members of the joint family and their properties in the appropriate proportion. Of course, the liability is joint and several. We must make it clear that where no partial partition has taken effect, the sub-section has no application at all. Only where a partial partition has been effected as a matter of fact, does sub-section (9) step in and declare that it shall not be recognized or recorded. The law seeks to ignore partial p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial provisions applicable to firms ; it is equally true that a provision corresponding to sub-section (9) of section 171 does not find a place in Chapter XVI. Indeed, in our opinion, such a provision would be out of place in Chapter XVI. Sub-sec tion (9) declares that no partial partition shall be recognised for the purpose of the Act and it is, therefore, rightly placed in section 171, which deals with assessment of a Hindu undivided family after partition. Moreover, one provision of an Act cannot be so construed as to defeat another provision of the Act. The interpretation placed by the Tribunal upon the provisions in Chapter XVI has the direct effect of nullifying clauses (a) and (b) of sub-section (9) of section 171. The several provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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