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Issues:
1. Interpretation of section 171 of the Income-tax Act, 1961 regarding partial partition and assessment of share income. 2. Jurisdiction of the Commissioner of Income-tax to revise an assessment order made in accordance with a recognized partial partition under section 171. Analysis: The judgment pertains to a case involving the assessment of share income from firms in a Hindu undivided family (HUF) for the assessment year 1979-80. The primary issue revolves around the interpretation of section 171 of the Income-tax Act, 1961, concerning partial partition and the subsequent assessment of share income from firms in an HUF. The case involves a joint family comprising Jegadeesan as the karta and his minor son, Vijay Anand. A partial partition was recognized by the Income-tax Officer under section 171, leading to the assessment of 50% of the share income in the hands of the HUF and the remaining 50% in the hands of the minor coparcener. However, the Commissioner of Income-tax issued a notice under section 263(1) challenging this assessment, arguing that the entire 100% share income should be assessed in the hands of the HUF. The crux of the matter lies in the jurisdiction of the Commissioner to revise an assessment order made in accordance with a recognized partial partition under section 171. The High Court, drawing from a Supreme Court precedent, emphasized that once an order under section 171 is passed, it holds statutory force and cannot be disregarded unless set aside by a competent authority. The Court held that the Commissioner lacked jurisdiction to revise the assessment order made by the Income-tax Officer in compliance with the order under section 171. The Court emphasized that the Commissioner should have initiated proceedings to set aside the order under section 171 before revising the assessment. Consequently, the Court upheld the Income-tax Appellate Tribunal's decision that the Commissioner lacked jurisdiction to revise the assessment without canceling the order under section 171. In conclusion, the High Court ruled in favor of the assessee, holding that the Commissioner of Income-tax lacked jurisdiction to revise the assessment order without canceling the order under section 171. The Court highlighted the statutory nature of the order under section 171 and stressed the necessity for proper legal procedures to be followed before revising such assessments. The judgment underscores the importance of upholding statutory orders and the limits of the Commissioner's jurisdiction in revising assessments based on recognized partial partitions under the Income-tax Act.
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