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TMI Blog1982 (8) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... rendering of an account in respect of her share. On April 7, 1954, Smt. Raja Syamala filed a suit for partition, being O.S. No. 47 of 1954 on the file of the learned Subordinate judge, Tenali. A preliminary decree was passed in terms of a compromise entered into between the parties, whereunder, pending the passing of the final decree, certain properties were tentatively allotted to different members for their enjoyment. The final decree was passed on March 16, 1961, when all the properties were divided by metes and bounds between the several members of the family. The HUF was an assessee under the I.T. Act. For the assessment year 1959-60, the assessee claimed that there was a partition on April 1, 1956, whereunder the several members were allotted distinct properties for their enjoyment and that, therefore, an order under s. 25A of the I.T. Act, 1922, should be made declaring that there was a disruption of the HUF as on April 1, 1956, the date on which the compromise-memo was filed into court leading to the preliminary decree. This was rejected by the ITO as well as by the AAC and the Income-tax Appellate Tribunal, whereupon the matter was brought to this court in R.C. No. 2711 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o minor sons, agreeing to the division of all the family properties into four equal shares. It was submitted further that one of the minor sons, Raja, filed a written statement agreeing to the division of properties into four equal shares, after he attained majority and that this was also done prior to April 1, 1957. It was, therefore, contended that there was no HUF in existence, according to law, on the date the W.T. Act came into force and, therefore, there can be no assessment on the HUF. This ground appealed to the Tribunal. It observed that, since the new ground urged before it went to the very root of the matter, viz., whether the assessee was in existence at all on the relevant valuation date, it was fair and proper to allow the said ground to be urged. Accordingly, it allowed the appeal, quashed the assessments made for the said three years, and remitted the matter to the WTO to decide afresh the questions as to who the assessee is, and what assets formed part of its net wealth ? The assessee was permitted to produce all evidence it wants in that behalf, and the Department was also left free to make use of any material which it may have. The Department asked for a referenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an sell or mortgage, or takes particular ornaments which he can wear or dispose of, and that the expression " definite portions " is not appropriate to describe an undivided share in property where all a particular member can claim is a proportion of the income, and a division of the corpus, but where he cannot claim any definite portion of the property. The learned Chief Justice observed further (p. 196): " ' Portion ' seems to me the apt word for division of property, and, ' share ' for division of interest, and it is significant that 'portion ' is used in section 25A. No doubt the expression ' division in definite portions ' will have to be construed with regard to the nature of the property concerned." This decision was quoted with approval by the Supreme Court in joint Family of Udayan Chinubhai v. CIT [1967] 63 ITR 416. It is thus clear that s. 20 of the W.T. Act substantially corresponds to s. 171 of the I.T. Act, 1961, and s. 25A of the Indian I.T. Act, 1922. It is necessary, however, to point out one material point of distinction between s. 25A of the Indian I.T. Act, 1922, and s. 20 of the W.T. Act. The words " hitherto assessed as undivided " which occur in s. 25A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mencement of the Act. In either case, he contended, the requirements of s. 20(1) must be satisfied; and if not, the HUF must be deemed to continue for the purpose of the Act. Reliance was placed upon a decision of the Bench of the Gujarat High Court in Goswami Brijratanlalji Maharaj v. CWT [1971] 79 ITR 373, which, in turn, clearly supports the learned counsel's contention, dissenting from the view taken by the Calcutta High Court in the aforementioned case. Having regard to the language of sub-s. (1) of s. 20, we are of the opinion that no distinction can be made between a case where the partition is alleged to have taken place before the commencement of the Act, and where the partition is said to have taken place after the commencement of the Act. Sub-section (1) of s. 20 says " where, at the time of making an assessment, it is brought to the notice of the Wealth-tax Officer that a partition has taken place among the members of a Hindu undivided family, and the Wealth-tax Officer, after inquiry, is satisfied that the joint family property has been partitioned as a whole among the various members or groups of members in definite portions, he shall record an order to that effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a partition has taken place among the members of such family, the Income-tax Officer shall make such inquiry thereinto as he may think (emphasis is ours). The same words are again used in sub-s. (3). In view of the said words in sub-ss. (1) and (3) of s. 25A, there was scope for arguing that, for s. 25A to apply, it must be a family which was-hitherto assessed under the Act as an HUF. But, the words " hitherto assessed as undivided " are not to be found in s. 20 of the W.T. Act ; and this omission could not have been but deliberate because the same words are again found repeated in s. 171 of the I.T. Act, 1961. Another circumstance peculiar to this case, which must be kept in mind, is that the returns were filed by the HUF in the status of an HUF, and the only difference between the assessee and the Department was, whether it comprised of three members or four. In other words, the only dispute was, whether Smt. Raja Syamala must also be treated as a member of the HUF or not. It was only before the Tribunal that it was contended for the first time that there was a division in status between the parties, long prior to the coming into force of the Act and that, therefore, the very RU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 of the W.T. Act and s. 25A of the Indian I.T. Act, 1922, is not very much material. With great respect to the learned judges, we are unable to see how the fact that s. 20 is not the charging section is material in the matter of interpretation of s. 20. Similarly, the position obtaining under personal law cannot be treated as a relevant circumstances because, so far as this Act is concerned, it is the provisions of this Act alone which are material, and these provisions do not make a distinction between a case where the HUF has been assessed as such under the Act hitherto and a case where the matter is coming up for the first time for consideration under the Act. We have also pointed out hereinbefore that the omission of the words " hitherto assessed as undivided " in s. 20 of the W.T. Act cannot be deemed to be accidental, for, the same words are found repeated in s. 171 of the I.T. Act, 1961, which was enacted subsequent to the W.T. Act. Further, as rightly pointed out by the Gujarat High Court (Goswami Brijratanlalji Maharaj v. CWT [1971] 79 ITR 373), unless the joint family property as a whole has been divided into definite portions, the WTO is entitled to declare that such f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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