TMI Blog1997 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... mma, widow of Nagapotha Rao and Smt. Raja Syamala, widow of Sitarama Rao. Differences arose between Smt. Raja Syamala and the other members of the family and on October 7, 1950, Smt. Raja Syamala gave a registered notice expressing her desire to separate. On April 7, 1954, she filed a suit [O. S. No. 47 of 1954] for partition in the court of the Subordinate Judge, Tenali. In the said suit, Smt. Mahalakshmamma on behalf of herself and her two minor sons filed a written statement on October 27, 1954, agreeing to the division of all the family properties into four equal shares. On attaining majority, Raja as well as Satyanarayana Murthy, filed written statements making similar request. On the basis of a compromise between the parties a preliminary decree for partition was passed in the said suit on April 1, 1956. The final decree was passed in the suit on March 16, 1961. The present appeals relate to the assessment years 1958-59, 1959-60 and 1960-61. In respect of these years returns were filed by the assessee as a Hindu undivided family consisting of three members, namely, Smt. Mahalakshmamma and her sons, Raja and Satyanarayana Murthy. The Wealth-tax Officer made the assessment on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re it and sent the matter back to the Wealth-tax Officer to decide afresh the question as to who the assessee is and what assets formed part of his net wealth. At the instance of the Revenue, the Tribunal referred the following question for the opinion of the High Court of Andhra Pradesh (see [1983] 143 ITR 441, 443) : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in cancelling the wealth-tax assessments for the years 1958-59, 1959-60 and 1960-61 ? " The said question has been answered by the High Court by the impugned judgment dated August 26, 1982, in favour of the Revenue and against the assessee. The High Court has held that having regard to the language of sub-section (1) of section 20, no distinction can be made between a case where the partition is alleged to have taken place before the commencement of the Act and where the partition is said to have taken place after the commencement of the Act. The idea behind section 20 of the Act is that unless the joint family properties are divided into definite portions and allotted to each individual member, it cannot be said that a particular member can be assessed with respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily is sufficient to constitute partition and the moment such a declaration is made, the joint family comes to an end and there after the members of undivided family become separated in status and they hold the joint family property as tenants under common ownership with definite shares in that property. But for the purpose of assessment of income-tax and wealth-tax, the Legislature has imposed the requirement that for a partition in a Hindu undivided family, it is necessary that the joint family property should be partitioned among the various members or groups of members in definite portions. The rationale for the introduction of section 25A in the Indian Income-tax Act, 1922, has been thus explained by Venkatarama Aiyar J. in Lakhmichand Baijnath v. CIT [1959] 35 ITR 416 (SC) : " That section was, it should be noted, introduced by the Indian Income-tax (Amendment) Act, 1928 (3 of 1928), for removing a defect which the working of the Act as enacted in 1922 had disclosed. Under the provisions of the Act as they stood prior to the amendment, when the assessee was an undivided family, no assessment could be made thereon if at the time of the assessment it had become divided be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th section 25A of the Indian Income-tax Act, 1922, and is only a machinery section. The High Court has also held that in view of the position of Hindu law that after the unequivocal expression of intention to separate, the individual member of the erstwhile Hindu undivided family will have no interest in the coparcenary property of the Hindu undivided family of which he was a member and sub-clause (ii) of section 5(1) of the Act would be no bar for assessment in respect of the properties in the hands of the erstwhile members of the Hindu undivided family even though the properties have not yet been divided amongst the members in definite portions. The High Court has further held that sub-section (2) of section 20 would not be attracted where no prior assessment had been made of the assessee as a Hindu undivided family under the Act because in that event there is no question of the family continuing to be liable to be assessed as such under sub-section (2) of section 20. In Goswami Brijratanlalji Maharaj v. CWT [1971] 79 ITR 373 (Guj), after taking note of the reasons given by the Calcutta High Court in Shri Srilal Bagri v. CWT [1970] 77 ITR 901, the learned judges of the Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther there has been a partition by metes and bounds and whether there has been a physical partition of properties of the Hindu undivided family amongst different members ; and it is only after that test of physical partition by metes and bounds is satisfied that the necessary consequences for the purposes of assessment under the Wealth-tax Act will follow." We are in agreement with these observations and we are unable to agree with the interpretation placed by the Calcutta High Court in Srilal Bagri's case [1970] 77 ITR 901 on the provisions of section 20 of the Act. In the impugned judgment the learned judges, in our opinion, have rightly observed that no distinction can be made between the case where partition is alleged to have taken place before the commencement of the Act and where the partition is said to have taken place after the commencement of the Act because the idea behind section 20 of the Act as well as section 171 of the Income-tax Act, 1961, is that for a given assessment year either the Hindu undivided family must be assessed or its members must be assessed individually and unless the joint family properties are divided in definite portions and allotted to each i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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