Law:

Section:

â- Section 171 of the Income-tax Act, 1961 - Hindu undivided family - Assessment after partition - Assessment years 1981-82 and 1982-83 - Whether once a Hindu undivided family has been assessed as Hindu undivided family, it shall continue to be assessed so unless order recognizing partition is passed by authority concerned - Held, yes FACTS The assessee-HUF, consisted of karta, his wife and four sons. The HUF was also partner in a firm. It claimed a partial oral partition on 20-10-1979 in respect of its share income from that firm. The immovable properties, however, continued to be joint Hindu family property. The ITO rejected its claim of partition on the ground that since the same was effected after 31-12-1978, it would be hit by section 171(9). On appeal, the first appellate authority confirmed the impugned order. On second appeal, the Tribunal holding, inter alia, that the assessee was out of the coverage of section 171(9) because no assessment was made in the status of HUF; and that the word 'assessed' used in said section would mean passing of the assessment order prior to the date of partial partition, allowed its claim. On reference : HELD Section 171 deals with the assessment after partition of HUF. It is a machinery section. It basically provides two things. Firstly a HUF hitherto assessed as undivided shall be deemed for the purposes of the Act to continue to be HUF except where a finding of partition has been given by the assessing authority as defined in the Explanation to the section. Secondly, a duty has been cast on the assessing authority while framing assessment under section 143 or 144 to adjudicate a claim if raised by any member of the Hindu undivided family that partition, whether oral or total, has taken place amongst the members of such family. By the Finance (No. 2) Act, 1980 sub-section (9) has been inserted which provides that partial partition which has taken place whether before or after 31-12-1978 amongst the members of HUF hitherto assessed as undivided, shall be treated as null and void. [Para 6] From the statement of the case, it was clear that assessments for earlier assessment years were made for the assessment years…

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