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TMI Blog1982 (9) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... in raising (the question of) the applicability of section 171(8) (in an) application filed u/ss. 256(1) and 256(2) ? " Facts necessary to answer the questions referred are as follows: For the assessment year 1970-71 the assessee, an HUF, filed a return showing an income of Rs. 16,100. During the course of the assessment proceedings it was found that the assessee had understated the income of his residential house and claimed more than double the amount paid as house and water taxes. Further, income arising out of the sale of truck was not disclosed and sales of bricks were suppressed. When confronted with these facts the assessee filed a revised return on June 21, 1971, showing a total income of Rs. 21,663. Assessment was completed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of partition was accepted by order dated June 21, 1971. Section 171 deals with assessment after partition of an HUF. Sub-section (1) provided that Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be an HUF, except where and in so far as a finding of partition has been given under this section in respect of the HUF. Sub-section (4) provides: " Where a finding of total or partial partition has been recorded by the Income-tax Officer under this section, and the partition took place during the previous year, (a) the total income of the joint family in respect of the period up to the date of partition shall be assessed as if no partition had taken place and... It is thus obvious that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urthy [1972] 83 ITR 58 (AP) [FB] and CIT v. Nathimal Ga Lal [1973] 89 ITR 190 (All) [FB], it was held that the provisions of s. 25A of the 1922 Act did not apply to penalty proceedings. The Supreme Court has now ruled in Gauri Shankar Chandrabhan v. CIT [1976] 103 ITR 772, that even under that section a Hindu joint family once assessed as undivided was deemed to continue to be an HUF for all the purposes of the Act till an order accepting the partition was passed under that section, and, therefore, a penalty could be imposed on a disrupted family even while its application for recognizing the partition was pending. In view of sub-s. (8) of s. 171, the power to levy and collect any penalty, interest, fine or other sum in respect of any perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not impressed by this argument. The stand taken by the Department throughout was that it was competent for the ITO to impose penalty in respect of the period up to the date of partition. The mere fact that reference was not made to the provision of the Act which empowered the ITO to levy the penalty could not debar the Revenue from referring to the relevant provisions of the Act for the first time at the stage of the application under s. 256(1) of the Act. In the application under s. 256(1) the Department did not take any new stand but only brought to the notice of the Tribunal the relevant provisions of the Act which justified its action. Reference to the provisions of the Act in support of the action taken could not be equated with the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the G.T. Rules. After upholding the decision of the Tribunal that no referable question of law arose out of the order of the Tribunal, the Supreme Court observed that a question of law can be said to arise out of the order of the Tribunal only if it is dealt with by the Tribunal or is raised before, though not decided by the Tribunal, and a question of law not raised before the Tribunal and not dealt with by it in its order cannot be said to arise out of its order, even if on the facts of the case stated in the order the question fairly arise. The Supreme Court further observed that it was obvious that this question sought to be raised on behalf of the Revenue was neither raised before the Tribunal nor decided by it and the only argument ..... X X X X Extracts X X X X X X X X Extracts X X X X
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