9911796707
TMI Blog1980 (9) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... f Shri Panna Lal Father Karta, Shrimati Pushpa Rani wife of Shri Panna Lal, Master Manohar and Master Raju, two minor sons of Karta and four daughters. An agreement was reached between his wife Smt. Pushpa Rani and Shri Panna Lal acting on his behalf as well as on behalf of their minor sons to take out both capital and share of profit from the assets of the joint family and partition them. With this end in view a sum of Rs. 50,000 was to be withdrawn from capital of the HUF to create a reserve for the marriage of four daughters and the balance capital was to be credited equally in the accounts of Shri Panna Lal, Smt. Pushpa Rani and two minor sons Master Manohar Lal and Master Raju. This agreement orally arrived at on 31st March, 1974 was followed by causing appropriate entries in the account books of the joint family and recording the agreement in a memorandum of agreement on 21st Aug., 1974 and signed by Panna Lal for himself and for his minor sons and Pushpa Rani and witnesses. Since the partition had been effected in the year 1974-75, the claim was made before the ITO assessing the HUF to record a finding for partial partition for asst. yr. 1975-76. 4. The ITO examining entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions. But the CIT was not persuaded and by order passed on 29th Aug., 1979 under s. 263(1) caused the two assessments to be revised. 8. It is against these revision orders the assessee in appeal before us. 9. The chief objection of the CIT respecting the finding recorded under s. 171 is one only as allowed to above in connection with the Notice dt. 24th July, 1979. Although he raised a point that partition was not effected by metes and bounds, the CIT did not press this objection and made a point to hold that the finding recorded under s. 171 was erroneous. He referred to one aspect of the factum of partial partition. It was that there was no agreement validly arrived at to support the factum of partial partition. In his view it was mandatory in the circumstances and facts of the case to have a valid agreement to arrive at a decision to effect a partial partition. The assessee family comprised of the Karta father Panna Lal, his wife Pushpa Rani, two minor sons and three daughters. Of these members Panna Lal and two minor sons were alone coparceners. A valid agreement among the coparceners was a sine qua non for reaching an agreement to preface the partial Partition allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is practically judge-made law since the Hindu Law texts do not contemplate cases of partial partition. There is no decided case in support the view that the father has the power to affect a partial partition without the consent of his sons. Certain principles have been deduced from the decisions of the Privy Council and the Supreme Court and one such principle is that though a partition may be partial by mutual consent of parties no coparcener can by suit enforce a partial partition against the other coparceners. The suit must be one for complete partition. No doubt this is in the context of suit for partition but it is not unreasonable to infer that a partial partition requires mutual agreement of all the parties and cannot be made against the will of the remaining coparceners. The additional power given to the father appears to be of bringing about a total partition against the will of his sons without resorting to a suit. However, a partial partition can be made only by consent of all and cannot be obtained even by a suit. In view of all this the general principle that the whole always includes a part cannot be applied in this context to mean that the father's power to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p firm was valid or not. Their Lordships held that partial partition was not vitiated in any way but was valid. The requirement of consent on the part of all coparceners was not referred to at all. The counsel argued that although this aspect of the partial partition was not raised, before Their Lordships but nothing prevented them from expressing that partial partition required consent on the part of all coparceners. Next the counsel referred to the decision of Supreme Court in Charan Dass Haridass anr. vs. CIT Bombay North reported in 39 ITR 202. In that case assessee being a Karta of an HUF consisting of his wife, his three minor sons and himself had effected a partial partition consisting of commission which accrued from the partnership of Karta in six managing agency firms. The partition had followed an oral agreement between assessee his wife and the minor sons, and the execution of a memorandum of partial partition recording the oral agreement of partition and the particulars of the division. The Tribunal had endorsed the finding of the lower authorities and had held that partial partition was not valid. The High Court in a reference made had upheld the finding of the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was perfectly valid and must be accepted as such, CIT's order under s. 263(1) must be quashed and the ITO's finding under s. 171 be restored. 13. He further submitted that under s. 263(1) the CIT was authorised to revise an order and not change a mere finding recorded under s. 171. 14. The DR relying on the order of the CIT submitted that the case of Seth Gopal Dass was the only decision which applied to the facts of the case. Their Lordships were faced with the question whether consent was needed on the part of minors to effect a partial partition or not and they answered it in affirmative. In no other case this specific question based on consent was raised, and therefore, the answer recorded there will not apply to the case before us, where the only question raised is about the consent on the part of minors. In his view the CIT's order was the correct order and did not require any interference on the part of the Tribunal. 15. Having heard both parties we are not inclined to agree with the submissions raised on behalf of the Revenue. As we peruse the decisions given on the subject of Partial Partition by Allahabad High Court, Madras High Court and even Punjab High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired that the father should during his life-time, divide his wealth equally amongst his sons prior to his becoming an ascetic or a hermit". "A Hindu father under the Mitakshara Law can, it has been held, effect a partition between himself and his sons without their consent and this is rested on the Mitakshara I, ii, 2. This tax has been held to apply not only to property acquired by the father himself but also to ancestral property. The father has power to effect a division not only between himself and sons but also between the sons inter se." "In all these cases, the father's power must be exercised bona fide and in accordance with law; the division must not be unfair and the allotments must be equal" Mulla's Principles of Hindu Law "The father of a joint family has the power to divide the family property at any moment during his life, provided he gives his sons equal shares with himself, and if he does so, the effect in law is not only a separation of the father from the sons, but a separation of the sons inter se. The consent of sons is not necessary for the exercise of that power... The right of a father to sever the sons inter se is a part of the partia potestas s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n., 1946 which was the beginning of a fresh accounting year. On 1st Sept., 1946 Charan Das Hari Das acting for himself and his minor sons and Shantaben executed a memorandum of partial partition in which above facts were recited, the document purporting to be a record of what had taken place orally earlier. 18. The assessee's claim was negatived by ITO. He could get no relief either from the AAC, the Tribunal. Even the High Court turned down his case that there was a valid partial partition. It was only before the Supreme Court he succeeded. Their Lordships held that there was a valid partial partition and overruled the contention of Revenue that the assets had not been divided by metes and bound. It is not the decision only which is of interest and significance in the context of present debate but the observation of the Lordships, "... the document was fully effective between the members of the family. Had the want of consent affected the document it would have been so much on surface it could not have been missed by their Lordships that they could make the observation the document was fully effective." The facts of the case being identical where the father Karta had signed bot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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