COMMISSIONER OF INCOME TAX Vs. D C BASAPPA

JUDGEMENT

(1.) THIS reference is at the instance of the Revenue under Section 256(1) of the Income-tax Act, 1961, seeking for an answer to the following two questions :

(2.) THE statement of case drawn up in the context of reference to this court by the Income-tax Appellate Tribunal indicates that for the assessment year 1979-80, the assessee had filed a return of income claiming the status of an individual based on a partition dated March 15, 1975, which had taken place amongst the husband, wife and daughters who constituted a joint Hindu family up to that point of time. THE assessee who had been assessed in the status of a Hindu undivided family hitherto pursuant to the said partition dated March 15, 1975, and for the assessment years 1975-76 onwards, claimed the status of an individual and was filing the return in that capacity and accordingly, for the assessment year 1979-80 also.

(3.) THE Assessing Officer being of the view that a partition amongst the husband, wife and daughters of a Hindu undivided family was not recognised under the Hindu law nor was permissible and further by recognising or allowing the claim of the assessee on the basis of such a partition and by effecting change in the status of the assessee from Hindu undivided family to individual, the Revenue having been put to loss by the fact that the tax liability of the assessee if assessed in the status of an individual being less than the liability if it is assessed as a Hindu undivided family proceeded to pass an order holding that the assessee should have been assessed only as a Hindu undivided family and not in the capacity of an individual and on such premise called upon the assessee to pay the difference of tax and issued a demand notice for payment of a sum of Rs. 4,041 in respect of the assessment year in question.