PRAKASH KRISHNA, J. - (1.) THE Income Tax Appellate Tribunal, New Delhi has referred the following two questions of law under Section 256(1) of the Income Tax Act, 1961 ( here in alter referred to as the Act) for opinion to this Court: - '(1) Whether Sub - section (9) of Section 171 of the Income Tax Act applied to the facts of, the present case.? (2) Whether the Tribunal was justified in holding that the aforesaid section will not apply because assessments were made after 31 -12 -1978.'
(2.) BRIEFLY stated the facts giving rise to the present case are as follows: - The reference relates to the assessment years 1981 -82 and 1982 - 83. The respondent assessee, a joint Hindu family consisting of Karta ,Sri Gian Chand, his wife and four sons. The H.U.F. was partner in a firm M/s Ladulal Kewalchand, Shamli having half share in the profits and the capital of the firm. A partial oral partition was claimed on 20 -10 -1979, which was reduced in writing on 21 10 -1979 between the members as regards the share income and withdrawal from banks, capital as standing to the credit of the family in the books of the firm. The immovable properties however continued to be the joint Hindu family property. The claim for partition was not accepted by the Income Tax Officer on the ground that since the partition was affected after 31 -12 -1978 and it would be hit by Section 171(9) of the Act. The said order was affirmed in appeal by the Appellate Assistant Commissioner, who recorded the following finding: (a) The assessments for the preceding years by the Income Tax Officer, Jaipur, was in relation to assets which belonged to the HUF. Thus, the real character of income was that of HUF and not individual. , (b) The assessee had known even while the assessments were being made on individual, that the income belongs to the HUF. In the Wealth tax assessments, the status has been taken as HUF.'
(3.) HE held that the assessee cannot plead that it was not hitherto assessed as undivided. The Appellate Assistant Commissioner found that although one of the members of HUF was assessed at Jaipur and in the assessment column the status was mentioned as individual. But, as a matter of fact, the income of HUF was assessed. He was of the view that it was a case of mistake on the part of the assessing authority and, as such, no advantage can be derived out from this mistake by the assessee. The Tribunal in Second appeal allowed the claim of partial partition as set up by the assessee on the ground that conditions of Section 171(9) of the Act having not been fulfilled, the Income Tax Officer can not refuse the claim of partial partition. It took the view that no assessment was , made in the status of HUF the assessee is out of the reach of Section 171(9) of the Act. Further it took a view that the word ' assessed' used in Section 171(9) of the Act means passing of the assessment order prior to the date of partial partition.;