9911796707
TMI Blog1980 (3) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in its statement of the case and otherwise appearing on the record may be recapitulated here. M/s. Gopi Chand B. Tholia, Jaipur, was assessed as HUF until and for the assessment year 1959-60 relating to the previous year ending on Diwali 1958. At the time of making the said assessment, the assessee claimed that partition had already taken place with effect from January 3, 1958. The assessee made an application under s. 25A of the Indian I.T. Act, 1922 (hereinafter called " the old Act "), for an order recording the alleged partition. The ITO rejected this application and assessed the family as HUF. In due course, the matter of making the assessment for the assessment year 1960-61, relating to the previous year ending on Diwali, 1959, came up before the ITO. The assessee filed a return showing its income as " nil " with an explanatory note that since there was a total partition under an award, dated December 27, 1957, taking effect from January 3, 1958, there was no question of accrual of any income to the family during the previous year ending on Diwali, 1959. The assessee made two applications, one on August 22, 1964, and the other on September 26, 1964, requesting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e family does not affect the partition. Though Tholia Garden was not divided by metes and bounds, it was notionally divided into six equal shares. It could not be physically divided into six shares, for, as the Appellate Assistant Commissioner put it, " solid and substantial reasons of practicability, convenience and reasonable sentiment not affecting the general bona fide intention of becoming completely separated units for all purposes ". (iii) The agreement among the members of the family whereby Kumud Chand surrendered Shanti Bhawan, Jaipur, to Smt. Rattan Bai and agreed to pay her Rs. 175 per mensem as maintenance did not affect the overall partition among the six branches of the family. (iv) Total partition had thus taken place with effect from January 3, 1958. Thus, the AAC allowed the assessee's appeal directing the ITO to pass an order under s. 25A of the old Act. He also allowed the connected appeal arising out of the assessment order made by the ITO under s. 143(3) of the new Act. Consequently, he cancelled the assessment holding that since there was no HUF in existence throughout the previous year ending on Diwali, 1959, there was no question of accrual of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were governed by the old Act. It will be seen from the assessment order dated March 19, 1965 (annex. B), that though it related to the assessment year 1960-61, corresponding to the accounting period which ended on Diwali 1959, the returns of income on which it was based were filed by the assessee on November 11, 1963, and July 27, 1964, and the assessment was expressly stated to have been made under s. 143(3) of the new Act. In fact, the Appellate Tribunal also appears to have been aware of the fact that the assessment in question was made under s. 143(3) of the new Act. It will be seen that question No. 2 formulated by the Appellate Tribunal for our decision expressly states that the assessment cancelled by the AAC, which cancellation was subsequently confirmed in appeal by the Appellate Tribunal itself was made " under s. 143(3) of the I.T. Act, 1961, for the assessment year 1960-61 ". This being the admitted factual position, the assessee's claim for partition which was made before the ITO during the course of assessment proceedings in 1964 ought to have been enquired into and disposed of in accordance with the provisions of s. 171 of the new Act instead of s. 25A of the old ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l settled that sub-s. (1) of s. 25A of the old Act is purely procedural inasmuch as it only prescribes the procedure whereby the members of a family, which had hitherto been assessed in the status of an HUF, may obtain an order that they may, because of partition, be assessed as separated members. If any authority is needed on the point, reference may be made to Gowli Buddana v. CIT [1966] 60 ITR 293 (SC). A similar pronouncement was made by the Supreme Court in respect of the provisions of sub-ss. (1) to (5) of s. 171 of the new Act. While contrasting sub-s. (6) with sub-ss. (1) to (5) and holding that sub-s. (6) is a substantive provision, the Supreme Court held in Govinddas v. ITO [1976] 103 ITR 123 that sub-ss. (1) to (5) of s. 171 are merely procedural in that they lay down " the machinery for assessment of a Hindu undivided family after partition". We are, therefore, of the definite view that in making the assessment for the year 1960-61, on the basis of the returns of income filed after the commencement of the new Act, the assessing authority had no option but to make the assessment in accordance with the procedure prescribed in the new Act including the procedure specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
