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2022 (11) TMI 72 - ITAT BANGALOREValidity of Reopening of assessment u/s 147 v/s assessment u/s 153C - Assessment in the hands of HUF - AR submitted that the AO is required to pass order u/s 153C of the I.T.Act and not u/s 144 r.w.s. 147 - HELD THAT:- In the instant case, admittedly, when the directions were issued by the CIT(A) in the case of the individual to assess the income in the hands of the HUF, the assessments in the hands of the HUF had not become time barred. The directions of the CIT(A) is very clear and specific. The CIT(A) directed the A.O. to assess the income in the hands of the HUF, instead of the individual (while allowing the appeal in the case of the individual). Therefore, taking into account the provisions of section 150(1) of the I.T.Act, we hold that the reassessment completed is justified and valid in law. As in the case of CIT v. M/s.Lakkanna & Sons [2005 (5) TMI 684 - KARNTATAKA HIGH COURT] held that when HUF was not assessed in that status prior to the relevant assessment year, the Assessing Officer has erred in assessing the assessee as an HUF after the disruption of the HUF. It was held by the Hon’ble Court that fiction that a joint family shall be deemed to continue, enunciated in section 171(1) of the I.T.Act is only for limited purpose of roping in cases of joint families which had hitherto been assessed. It was further observed by the Hon’ble Court that it is not possible to extend that fiction beyond the field legitimately intended by the statute. It was held by the Hon’ble Court that the expression “hitherto assessed” occurring in section 171 of the I.T.Act is significant and only HUF which had suffered in the past would deem to continue to be HUF till an order of partition u/s 171(1) is recorded HUF was partitioned on 30.06.2002. Admittedly, the said partition deed was forming part of the seized document during the course of search. The Assessing Officer, who passed the original order u/s 153C of the I.T.Act in the individual case had accepted the partition, which was part of seized material. The assessment order u/s 144 r.w.s. 147 of the I.T.Act in the case of HUF was completed on 25.03.2013. In the instant case, the HUF was disrupted / partitioned as on the date of assessment (Assessment order in case of HUF was . completed on 25.03.2013) and the HUF having not been assessed in the past, the assessment order in the status of HUF is invalid, going by the dictum laid down by the judicial pronouncements cited supra. Therefore, the assessment order dated 25.03.2013 in status of HUF is hereby quashed. It is ordered accordingly.
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