COMMISSIONER OF INCOME-TAX Vs. RAGHUNANDAN PRASAD

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, Allahabad, has referred the following questions for the opinion of this court:

(2.) Whether, on the facts and in the circumstances of the case, the Department is justified in law in raising (the question of) the applicability of Section 171(8) (in an) application filed Under Sections 256(1) and 256(2) 7"

(3.) In the appeal against the order imposing the penalty the stand taken by the assessee was that the assessee became non-existent after August 1, 1969, the date on which the partition took place and in any case on June21, 1971, when the ITO passed the order under Section 171 accepting the assessee's claim of disruption and, consequently, no penalty could be imposed on the assessee. The AAC upheld the contention of the assessee and cancelled the penalty. The appeal preferred by the Revenue was dismissed by the Tribunal on the reasoning that the date on which the penalty order was passed, i.e., 30th March, 1974, the HUF on which the penalty had been imposed, was no longer in existence. It had ceased to exist with effect from August 1, 1969, when the partition took place and the fact of partition was accepted by order dated June 21, 1971. Section 171 deals with assessment after partition of an HUF. Sub-section (1) provided that a Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be an HUF, except where and in so far as a finding of partition has been given under this section in respect of the HUF. Sub-section (4) provides :