Law:

Section:

Section 237 of the Income-tax Act, 1961 [Corresponding to section 48(1) of the Indian Income-tax Act, 1922] - Refunds - General - Assessment year 1946-47 - In respect of relevant year, Assessee-HUF filed its return of income on 25-7-1946 and ITO completed assessment - Neither at time of filing return nor subsequently in course of assessment assessee claimed that status of Hindu undivided family came to an end on 4-11-1945 when its business was taken over by a firm - It was only on 24-5-1950, that assessee made an application claiming that its status came to end on 4-1-1945 and thereafter it constituted itself into a partnership firm - Assessee claimed that tax was wrongly imposed and, hence, claimed refund - Whether assessee not having raised contention in appropriate assessment year and having allowed assessment and order as to amount of tax payable by him to become final could not be permitted to have now a second chance which in effect would mean disregarding limitation in sub-section (4) of section 48 - Held, yes - Whether therefore, assessee was not entitled to claim refund of tax paid by him - Held, yes FACTS While filing the return for the assessment year 1946-47 the assessee did not claim before the ITO that at any time during the relevant "previous year" the HUF status had come to an end and that there was any succession. Consequently, assessment in the status of a HUF was made on the assessee for that year and even appeals against assessment were disposed of. On 24-5-1950 the assessee made an application saying that the status of the HUF had come to an end with the Diwali of 1945 and thereafter the family constituted itself into a partnership on 4-11-1945. The assessee, therefore, claimed refund of the tax paid relying on sub-section (4) of section 25 and section 48(1) of the 1922 Act. According to the assessee because of the succession as a result of the partnership formed no tax was payable by the assessee in respect of the income, profits and gains of the period between the end of the previous year and the date of succession. The Department held that the claim of the assessee was barred by limitation. On reference : HELD Section 48(1) of the 1922…

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