Law:

Section:

Section 25 of the Indian Income-tax Act, 1922 - Assessment in case of discontinued business - There was a partition in HUF in December, 1930 but members continued business under old name as partners - As no order under section 25A of 1922 Act was passed, family continued to be assessed as HUF till assessment year 1940-41 - Assessee's claim under section 25A of 1922 Act was allowed by ITO on 29-8-1942 - On 30-7-1943, assessee made application for refund of certain amount paid by them as income-tax for assessment year 1940-41 - Whether succession to HUF should be deemed in law to have taken place, for purposes of Section 25(5) of 1922 Act, on date on which it actually took place, i.e., end of December, 1930 - Held, yes - Whether, therefore, application for relief under section 25(4) of 1922 Act was not in time - Held, yes FACTS A HUF, consisting of 3 cousins, carried on business under the name of 'G'. There was a partition in the family in December, 1930, but the members agreed to continue the business under the old name as partners. As, however, no order under section 25A of 1922 Act was passed in respect of this family, family continued to be assessed as HUF till the assessment year 1940-41. In the year 1941-42 a claim was put forward under section 25A. It was alleged that the family properties had been partitioned in December, 1930, and that the three members had thereafter carried on the business as partners. The matter was inquired into by the ITO and an order, as contemplated by section 25A, was passed on 29-8-1942. He accepted the allegation that a partition in the family took place in December, 1930. On 30-7-1943, an application was made on behalf of family, claiming a refund of a sum under section 25(3) and (4) on account of the income-tax paid by them for the assessment year 1940-41. This application was rejected as barred by time. Both the AAC as well as the Tribunal dismissed the assessee's appeal. On reference : HELD When HUF was succeeded in business by a partnership firm was a question of fact. If there is any provision of law which says that though the actual "succession" took place on a particular date, it should, in the eye of law, be deemed to…

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