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TMI Blog1983 (9) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... to Harmohinder Singh being 1/6th of Rs. 2,10,000, and retained the balance sum of Rs. 1,75,000 as property of the smaller HUF constituted of all the members except Harmohinder Singh. To that effect, in wealth-tax return filed on 29th Oct., 1971, larger HUF, in part IV of its return had mentioned as under: "Rs. 60,000 withdrawn on 19th Feb., 1971 and Rs. 1,50,000 withdrawn on 15th March, 1971 belonging to HUF were partitioned and Harmohinder Singh severed his connection by withdrawing Rs. 35,000. The balance Rs. 1,75,000 belong to HUF of 1-2-4-5-6. Hence, not shown here." Shares of arrears were claimed exempt. The above stated coparceners were mentioned at Sr. Nos. 1 to 6, as given above. There is no controversy about the above disclosure made by the assessee in wealth-tax return for asst. yr. 1971-72 in part IV of the same. The assessee, however, alleges that on 6th Dec., 1971, an application was handed over to the ITO in person dt. 6th Dec., 1971 which reads as under: "During the year ending 31st March, 1971, Harmohinder Singh, one of the members of the HUF, severed his connection in the lot of Rs. 2,10,000 by taking a sum of Rs. 35,000. You are requested to kindly give e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pectively and in that connection, it will not be out of place to mention that the same were framed under ss. 143(3) and 16(3) respectively. Even in respect of assessment proceedings for the year 1977-78 in the case of M/s Jagat Singh Sons, smaller HUF, in which Harmohinder Singh was not included, certain enquiries were made by the ITO and the assessee had come forward with the same explanation emanating from the partial partition regarding investment in shares by smaller HUF. 3. There has also been an audit objection in respect of the said partial partition and the assessee filed its reply on 8th Feb., 1982 pointing out that an application claiming partition had been filed and, if by oversight, for no fault of the assessee, necessary order under s. 171 has not been passed, the same may be passed now. It was also mentioned by the assessee that year after year the assessee had been showing the said fact in income-tax and wealth-tax assessments and all through the assessments had been framed as if partial partition had been effected and accepted by the Revenue and it is too late and unjust after a long span of time to undo the same. In short, to say, the Revenue has accepted all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial to the interest of the Revenue. For the sake of argument, without conceding, he submitted that even if a fiction cast under the IT Act is there regarding continuity of HUF status, it is an extraordinary type of case where the order of the CIT(C) deserves to be cancelled on the basis of facts and he over and again took us through the assessment orders framed by the Revenue and submitted that most of them have become final. Even in the case of Harmohinder Singh, the same has not been disputed by the Revenue. 6. The learned Departmental Representative Mr. R.K. Bali, on the other hand, relied on the order of the CIT(C) and the very same cases mentioned therein and submitted that recording of a finding in writing is a must under s. 171 proceedings and the claim has to be in writing and in the absence of both, according to him, there is neither claim made by the assessee before the ITO in the year 1971-72 proceedings nor there is any such finding. The order of the CIT(C) is in order and deserves to be confirmed. 7. After taking into consideration the rival submissions, we are unable to confirm the order of the CIT(C). Undoubtedly, it is a galaxy of laws which is involved in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abad Bench of the ITAT in ITA Nos. 991 to 999/All/79 reported in (1982) 2 ITD 466 (All), in which the learned Members observed as under: "In our opinion, however, there is considerable merit in the third submission of the learned counsel for the assessee that the factum of partition was before the ITO and it was his duty to comply to the provisions of s. 171. What s. 171 requires is that at the time of making an assessment, it should be claimed by or on behalf of any member of the family assessed as undivided that a partition, whether total or partial, had taken place among the members of such family. If there is any such claim, it is the duty of the ITO to make an enquiry therein to, after giving notice of the enquiry to all the members of the family. It is also his duty, on the completion of the enquiry to record a finding as to whether there has been a total or partial partition of the joint family property and then proceed in accordance with the procedure laid down in s. 171(4). What is meant by 'claim' is the question for consideration. According to us, it implies two things. The first is that it should be duly brought to the notice of the ITO that there has been partition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings under appeal and to issue, if necessary appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute". This case was cited by the learned counsel for the assessee on the alternative plea that, if there is any mistake, the Tribunal can rectify it. But taking into consideration the totality of circumstances in this case, we do not think it is necessary to send back the matter and lengthen the litigation for no rhyme or reason for the mere flaw that the ITO has not given a finding in writing, though by conduct all through he has dealt with the cases of the assessee in income-tax and wealth-tax as if partial partition has been granted to the assessee in the year 1971-72 and that even on the doctrine of double taxation assessment in the case of Harmohinder Singh has become final for some years, also for the sake of natural justice and also on the basis that attempt of the Revenue in this case is under s. 263, the assessee's contentions are accepted and order of the CIT is annulled. 9. In the result, the appeal is allowed. - - TaxTMI - TMITax - In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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