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TMI Blog1986 (3) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... r this partition, out of Rs. 50,000, Rs. 40,000 was allotted to Shri S.C. Mehta as karta of the HUF consisting of Shri S.C. Mehta and minor son C.S. Mehta and Smt. K.S. Mehta. The balance of Rs. 10,000 was allotted to Smt. R.C. Mehta. The assessee-HUF filed its return of income on 26-1-1980 along with a deed of partial partition dated 30-5-1979 with a request to the ITO to recognise the partial partition as per the provisions of section 171(3) of the Income-tax Act, 1961 ('the Act'). The ITO, however, declined to recognise the partial partition with the following remarks : "2. During the year of account the assessee has claimed partial partition which has taken place on 30-5-1979. The partial partition was made by the assessee after 31-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel for the assessee, the Parliament has no right to bring the provisions regarding non-recognition of partial partition retrospectively from 31-12-1978. In support of his submission, the learned counsel for the assessee relied on the decision of the Hon'ble Supreme Court in the case of D. Cawasji Co. v. State of Mysore, Vol. 17, p. 167 of the unreported judgments (Supreme Court). The head notes of the said case read as under : "Mysore Sales Tax (Amendment) Act, 1969 - Section 3 - Validity of - Enhancement of rate of duty from 6 1/2 per cent to 45 per cent with retrospective effect is arbitrary and unreasonable - Amendment not removing lacuna - Held, amendment is invalid and unconstitutional. The enhancement of the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atute, cannot question the vires of the provisions under which it functions. He, therefore, urged that since the Tribunal has no power to decide the validity of the provisions of section 171(9), the appeal filed by the assessee should be dismissed. 7. I have carefully considered the rival submissions of the parties and I do not find any substance in the appeal preferred by the assessee in view of the aforesaid decision of the Hon'ble Supreme Court in the cases of Kanpur Vanaspati Stores v. CST AIR 1973 SC 2373 and K.S. Venkataraman Co. (P.) Ltd. However, since the learned counsel for the assessee was very vehement in the stand taken on behalf of the assessee, I would like to discuss some of the aspects of the point involved in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, a joint family may make a division and severance of interest in respect of the joint estate while retaining their status as a joint family, the Income-tax Act does not recognise a partial partition in status alone and where a Hindu undivided family had been assessed to income as such, it continues to be regarded as a Hindu undivided family unless the property has been partitioned by metes and bounds. These provisions are contained in section 171 and apply equally in the case of total as well as partial partition. In spite of the measures taken in recent years, a Hindu undivided family continues to be used as a medium for reduction of proper tax liability. This appears to be specially true in cases where multiple Hindu undivided families ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach member or group of members of such family immediately before such partial partition and the family shall be jointly and severally liable for any tax, penalty, interest, fine or other sum payable under the Income-tax Act by the family in respect of any period, whether before or after such partial partition. The several liability of any member or group of members of such family shall be computed according to the proportion of the joint family property allotted to him or it on such partial partition. 31.4 This amendment has come into force with effect from 1st April, 1980 and is accordingly applicable in relation to the assessment year 1980-81 and subsequent years." It is also necessary to keep in mind the law regarding the amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the circular issued by the CBDT as well as the book, it is quite apparent that the stand taken on behalf of the assessee is devoid of any merits. 9.1 Apart from this, under section 171(3), the ITO is not only required to record a finding as to the claim of partial partition/partition is true or not but he is also required to indicate on which date the partition/partial partition has taken place---Kalloomal Tapeswari Prasad (HUF) v. CIT [1982] 133 ITR 690 (SC). It is partinent to note that in the instant case, the assessee had filed its return of income on 26-7-1980 along with an application for recognition of the partial partition which took place on 30-5-1979. Therefore, the earliest date on which the ITO could have applied his min ..... X X X X Extracts X X X X X X X X Extracts X X X X
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