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2021 (6) TMI 408 - HC - Income TaxRevision u/s 263 - denial of deduction u/s 54 in the hands of Individual - Partition of HUF or not - Assessment as a Hindu Undivided Family(HUF) - division of income without physical division of property did not amount to partition under Section 171 - notice u/s 263 as issued primarily on the ground that there was no physical division of the property and therefore the exemption under Section 54 F on sale appeared to be contrary to section 171 of the Income Tax Act, 1961. HELD THAT:- A reading of sub- section 171 of the Income Tax Act, 1961 makes it very clear that it is applicable only where a Hindu family was already assessed as an Hindu Undivided Family(HUF). Otherwise, there is no meaning to the expression “hither to” in Section 171(1). Admittedly, during the lifetime of Shir.A.R.Pandurangan, the family was not assessed as a Hindu Undivided Family(HUF). It is only where there is a prior assessment as a Hindu Undivided Family(HUF) and during the course of assessment under section 143 or section 144 it is claimed by or on behalf of member of such Hindu Undivided Family which was assessed as a Hindu Undivided Family that there was a partition whether total or partial among the members of such family, such assessing officer shall make an enquiry thereto after giving notice of enquiry of all members. Where no such claim is made, question of making such enquiry by an Assessing Officer does not arise. It is only in the above circumstances, the definition of “partition” in Explanation to Section 171 of the Income Tax Act, 1961 is attracted. The above definition cannot be read in isolation. Where a Hindu family was never assessed as a HUF, Section 171 of the Income Tax Act, 1961 will not apply even when there is a division or partition of property which does not answer to the above definition. Therefore,we are inclined to interfere with impugned notice dated 31.3.2015 and the impugned communication dated 16.11.2016 overruling the objection of the petitioner against the petitioner - Writ petition stands allowed
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