V.K. Singhal, J. - (1.) THE Income-tax Appellate Tribunal has referred the following two questions of law arising out of its order dated November 12, 1985, under Section 256(1) of the Income-tax Act, 1961, in respect of the assessment year 1980-81 : " 1. Whether, on the facts and in the circumstances of the case, the income of Rs. 7,126 stated to have been derived by the members of the Hindu undivided family from the funds allotted to them as a result of partial partition on March 31, 1979, should be added to the assessee's income ?
(2.) WHETHER, on the facts and in the circumstances of the case, the Tribunal was right in sustaining the levy of interest under Section 139(8) ?" 2. The brief facts of the case are that an addition of Rs. 7,126 was made by the Income-tax Officer while finalising the assessment. The partial partition of the Hindu undivided family was effected by the assessee-Hindu undivided family on March 31, 1979, which was accepted by the Income-tax Officer under Section 171(3) of the Act on January 17, 1980. Under Section 171(9)(a), partial partitions which are effected after December 31, 1978, are not recognised. The Income-tax Officer, on the basis of the provisions of Section 171(9)(a), came to the conclusion that the order passed under Section 171(3) is ineffective and is null and void. The income derived by the members from the properties partitioned has to be treated as the income of the Hindu undivided family, and, on that basis, the addition was made. The amendment to Section 171 was made by the Finance (No. 2) Act, 1980, with effect from April 1, 1980, and it was mentioned that the partial partition which has taken place after December 31, 1978, and would not be recognised. The contention of the assessee was that the funds already ceased to be the property of the assessee, the income from these funds could not be clubbed with the income of the assessee even though the partial partition had taken place on March 31, 1979. It was considered that, in view of the specific language used in the amended section, a Hindu family which was being assessed as an undivided family shall be continued to be assessed, as such there is no question of charging any section in the matter (sic). The provisions of Sub-section (9) of Section 171 of the Finance (No. 2) Act, 1980, are as under : " Notwithstanding anything contained in the foregoing provisions of this section, where a partial partition has taken place after the 31st day of December, 1978, among the members of a Hindu undivided family hitherto assessed as undivided, -- (a) no claim that such partial partition has taken place shall be inquired into under Sub-section (2) and no finding shall be recorded under Sub-section (3) that such partial partition had taken place and any finding recorded under Sub-section (3) to that effect whether before or after the 18th day of June, 1980, being the date of introduction of the Finance (No. 2) Bill, 1980, shall be null and void ; (b) such family shall continue to be liable fo be assessed under this Act as if no such partial partition had taken place ; (c) each member or group of members of such family immediately before such partial partition and the family shall be jointly and severally liable for any tax, penalty, interest, fine or other sum payable under this Act by the family in respect of any period, whether before or after such partial partition ; (d) the several liability of any member or group of members aforesaid shall be computed according to the portion of the joint family property allotted to him or it at such partial partition, and the provisions of this Act shall apply accordingly. " It was considered that in view of the amendment the income arising from a partitioned property after the relevant date shall be taxed in the hands of the Hindu undivided family, but wherefrom the Hindu undivided family is to discharge the tax liability, the provision for fixing several liabilities upon the individual members who had obtained portions of the property in the partial partition has been fastened. A deeming fiction has been created by this provision that where a partial partition of a Hindu undivided family had taken place after December 31, 1978, such family shall be continued to be assessed as if no such partial partition has taken place. In other words, the income from the assets partitioned is deemed to continue to belong to the Hindu undivided family. Neither the members nor the property shall be deemed to have been separated from the family. The Income-tax Officer is not competent to enquire into the claim of such partition and is forbidden to record a finding as to whether such a partial partition has taken place or not. Any finding regarding partial partition, recorded under Sub-section (3) of Section 171 has to be considered as null and void. It has also been made clear that the finding recorded before or after June 18, 1980, being the date of introduction of the Finance Bill, 1980, shall be null and void. When by such a provision even the amendment with retrospective effect has been brought on the statute book, the order which has been passed by the Income-tax Officer under Section 171(3) has to be considered as null and void. Before this date, there could have been any partial or total partition of the joint family property. The partial partition could be with regard to the persons constituting the joint family or could be with regard to the properties belonging to the joint family. In view of this specific provision of law, the Income-tax Officer had no option but to treat the order passed under Section 171(3) as null and void. Even the validity of the provisions could not have been considered by the Income-tax-Officer or the Tribunal or even the High Court in the reference proceedings. In these circumstances, we are of the view that the income of Rs. 7,126 derived by the members of the Hindu undivided family from funds allotted to them as a result of partial partition on March 31, 1979, should be added to the income of the assessee, namely, the Hindu undivided family. With regard to the second question, the Tribunal found that the return was not filed in time. The amendment was introduced by the Finance (No. 2) Act, 1980, by which the liability of the assessee in respect of the above income arose. Since the matter related to the assessment year 1980-81, the return could have been filed by June 30, 1980, but it was filed on September 14, 1981, and, thus was inordinately delayed. The liability to interest under Section 139(8) is for not furnishing of return or late furnishing of the return. The Income-tax Officer had the power to reduce or waive the interest, but that power was not exercised. The Tribunal came to the conclusion that it was only under exceptional circumstances to waive the interest which were not existing and that power has not been exercised. The exceptional circumstances have to be proved by the assessee and, on that basis, it was found that even the appellate authority without making a proper cause by the assessee cannot delete the interest under Section 139(8). The finding which has been recorded and the discretion which has been exercised by the Tribunal in not deleting the interest cannot be said to be unreasonable. The return was admittedly filed late after the amendment, when the liability of tax was crystallised. It was the duty of the assessee to submit the return in accordance with law as amended retrospectively. We do not feel that it is a fit case for waiving the interest. The Income-tax Appellate Tribunal, therefore, was justified in sustaining the levy of interest under Section 139(8) of the Act. Both the above questions, therefore, are answered in favour of the Revenue and against the assessee. No order as to costs.;