Report No. 12

G-Partition.

181. Assessment after partition of a Hindu undivided family.-

(1) A Hindu family hitherto assessed as undivided shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu family.

[Section 25A(3)]

(2) Where, at the time of making an assessment under section 147 or 148 [23], it is claimed by or on behalf of any member of a Hindu family assessed as undivided that a partition, whether total or partial, has taken place among the members of such family, the Income-tax Officer shall make an inquiry thereinto after giving notice of the inquiry to all the members of the family.

[Section 25A(1), main para., earlier part] [Section 25A(1), proviso]

(3) On the completion of the inquiry, the Income-tax Officer shall record a finding as to whether there has been a total or partial partition of the joint family property, and, if there has been such a partition, the date on which it has taken place.

[Section 25A(1), main para., latter part]

(4) Where a finding of total or partial partition has been recorded by the Income-tax Officer under this section and the partition took place during the previous year,-

(a) the total income received by or on behalf of the joint family in respect of the period upto the date of partition shall be assessed as if no partition had taken place; and

[Section 25A(2), main para., part]

(b) each member or group of members shall, in addition to any tax for which he or it may be separately liable and notwithstanding anything contained in section 11, clause (2) [section 14(1)], be jointly and severally liable for the tax on the income so assessed......

[Section 25A(2), main para., part] [Section 25A(2), proviso]

(5) Where a finding of total or partial partition has been recorded by the Income-tax Officer under this section and the partition took place after the expiry of the previous year, the total income of the previous year of the joint family shall be assessed as if no partition had taken place, and the provisions of clause (b) of sub-section (4) shall mutatis mutandis, apply to the case.

(6) For the purposes of clause (b) of sub-section (4), the several liability of any member or group of members thereunder shall be computed according to the portion of the joint family property allotted to him or it at the partition.

[Section 25A(2), main para., part]

(7) After a finding of total partition has been recorded by the Income-tax Officer under this section in respect of any Hindu family, the Income-tax Officer having jurisdiction to assess the Hindu family shall, subject to the provisions of section 135(7.) [64(5)],-

(a) if the Hindu family carried on any business, profession or vocation, be the Income-tax Officer of the area in which its principal place of business, profession or vocation was situate immediately before the partition; and

(b) in other cases, be the Income-tax Officer of the area in which the person who was the last manager of the Hindu family was residing immediately before the partition.

(8) The provisions of this section shall, mutatis mutandis and so far as may be, apply in relation to the levy and collection of any penalty or other sum in respect of any period upto the date of the partition, whether total or partial, of a Hindu family as they apply in relation to the levy and collection of tax in respect of any such period.

Explanation.-In this section,-

(a) "partition" means-

(i) a physical division of the property, if the property admits of such division, or,

(ii) where the property does not admit of physical division, then such division as the property admits of and a mere severance of status shall not be deemed to be a partition;

(b) "partial partition" means a partition which is partial as regards the persons constituting the Hindu undivided family, or the properties belonging to the Hindu undivided family, or both.