Law:

Section:

Section 171 of the Income-tax Act, 1961 [Corresponding to section 25A of the Indian Income-tax Act, 1922] - Hindu undivided family - Assessment after partition - Assessee was Karta of HUF which had certain share in a firm - Subsequently, partition took place in HUF - Assessee filed return for his share of income but ITO assessed him as karta of HUF for entire share of profits as being representative of family - Whether assessment proceedings were not been completed according to manner indicated in section 25A of 1922 Act - Held, yes - Whether it was duty of ITO to make total assessment in first place and then proceed to divide it pro rata between family members according to portion of joint family property allotted to each and, thereafter, he ought to have proceeded to make assessment on various members of family in accordance with provisions of section 23 of 1922 Act - Held, yes FACTS The assessee was karta of a HUF which had 8 annas share in a firm. The ITO while making the assessment of the firm for the period 11-11-1939 to 30-10-1940, apportioned the profits of the firm into four parts, 8 annas being allotted to the outside partner and the other 8 annas allotted to the assessee and other two members of the family. There was partition in the HUF on 25-10-1940. In response to notice under section 34 of the 1922 Act against the firm and against the partners, the assessee filed return showing 1/6th share of income from the firm but the ITO assessed him for 8 annas share of the entire profits as being representative of the HUF which had then become defunct. The AAC and the Tribunal overruled the objection that the assessment was not proper or valid. On reference: HELD As per section 25A of the 1922 Act the assessment is not complete unless each member of the joint family had been assessed for the share of the tax on the income according to the portion of the joint family property allotted to him. In the instant case, the assessment proceedings had not been completed according to the manner indicated in section 25A of the 1922 Act. It was the duty of the ITO to make total assessment in the first place and then proceed to divide it pro rata between the family…

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