Devranjan Mittra Vs Assessment Unit (ITAT Delhi)
The appeal was filed by the assessee, Devranjan Mittra, through his wife Ms. Sagorika Mittra after his death, against the order dated 22.07.2025 passed by the National Faceless Appeal Centre (NFAC), Delhi. The appeal arose from the assessment order dated 12.03.2025 passed under Section 143(3) read with Section 144 of the Income Tax Act, 1961, for Assessment Year 2023-24. The assessment had followed scrutiny under CASS after a difference was noticed between the rental income declared by the assessee and the rental receipts reflected in Form 26AS.
The assessee had explained that he held properties both in his individual capacity and in the status of HUF. Against gross rent receipts of ₹1,89,54,186, ₹1,45,92,690 was declared as income in the HUF status, while the balance rental income was offered to tax in the assessee’s individual hands. The Assessing Officer rejected this treatment, reasoning that the assessee belonged to the Bengali community and that there was no concept of HUF under the Dayabhaga School of Law. The Assessing Officer accordingly treated the relevant rental income as belonging to the assessee and made an addition of ₹27,40,147 under the head “House Property”. Penalty proceedings under Section 270A read with Section 274 were also initiated separately. The CIT(A) sustained the addition, primarily observing that the assessee had failed to produce details, documents or submissions at the appellate stage.
Before the ITAT, the assessee reiterated the factual and legal position relied upon before the lower authorities. The Tribunal noted that the grounds raised before the First Appellate Authority contained detailed assertions regarding the existence and recognition of the HUF entities. These included the history of the erstwhile HUF of Dr. A.P. Mittra and Brothers, the alleged formation of separate HUFs following partition, earlier income-tax and wealth-tax assessments of the HUFs, the final decree of partition in Suit No. 259 of 1970, and an order dated 30.03.1974 under Section 171(3) of the Income Tax Act accepting the claim for partition in the case of Shri K.P. Mittra (HUF). The assessee also contended that the rental income belonged to Shri DevRanjanMittra (HUF), a separately assessed entity, and that its inclusion in the individual’s income resulted in taxation of income belonging to the HUF.
The ITAT identified the central controversy as whether the tax authorities were correct in holding that, because the assessee was Bengali, he could not have a joint Hindu family on the premise that the Dayabhaga School of Law did not recognise the concept of HUF. The Tribunal observed that the tax authorities had not relied upon any judicial precedent to support that proposition. It noted that the Calcutta High Court, in CIT Vs. PN Talukdar (1982) 135 ITR 628 (Cal) and CIT Vs. Dr. A.K. Basu (1991) (91) CTR (Cal 155), had recognised the existence of a Hindu Undivided Family as an assessable unit while relying upon the Supreme Court decision in CWT Vs. Smt. Champa Kumari Singhi & Others (1972) AIR 2119. On that basis, the Tribunal set aside the findings of the tax authorities below, sustained the grounds raised by the assessee, and allowed the appeal. The Assessing Officer was directed to delete the additions, with liberty to make additions in the hands of the HUF as per law.
Cases Discussed
- CIT Vs. Dr. A.K. Basu (Calcutta High Court), (1991) (91) CTR (Cal 155)
- CIT Vs. PN Talukdar (Calcutta High Court), (1982) 135 ITR 628 (Cal)
- CWT Vs. Smt. Champa Kumari Singhi & Others (Supreme Court), (1972) AIR 2119
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the order dated 22.07.2025 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No: ITBA/NFAC/S/250/2025-26/1078787545(1) arising out of the assessment order dated 12.03.2025 u/s 143(3) r.w.s 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed Assessment Unit, Income Tax Department, for AY: 2023-24.
2. Heard and perused the record. The assesse Devranjan Mittra now deceased contesting through his wife Ms. Sagorika Mittra filed return of income which was picked up for scrutiny by CASS. It was noticed as per Form 26AS that the rental income declared by the assesse was less that what was being depicted in Form 26AS. Assessee had explained that assesse held properties in individual capacity as well as status of HUF and the gross rent of Rs.1,89,54,186/- were received in the year of which amount of Rs.1,45,92,690/- was declared as income in the status of HUF and the balance amount of rent has been offered to tax in the individual hands of the assesse. Assessing Officer has concluded that as assesse belongs to Bengali community where there is no concept of HUF being governed by Dayabhaga School of Law. Assessee is not entitled to the benefit of income reported in HUF and the whole rental income deserves to be considered to be of assesse, as for completeness we reproduce the conclusions drawn by assessing officer.
“4.6 Conclusion drawn
With the discussion held in preceding paras, it is concluded that the proposed variation is held to be indisputable. Variation on account of additional rent receipts under the head House Property: Accordingly, the net income from the House property as derived in para 2.4 of the SCN comes at Rs.49,65,213/- out of which the assessee has shown income under the head house property to the extent of Rs.22,25,066/- only. Therefore, the balance amounting to Rs.49,65,213/- minus Rs.22,25,066/- i.e. Rs.27,40,147/- is treated as additional income under the head House Property and the same is added to the total income of the assessee during the year in question relevant to A.Y.-2023-24. Penalty proceeding u/s. 270A r.w.s. 274 of the Act is initiated separately on account of under-reporting of income which is in consequence misreported thereof.”
3. Ld. CIT(A) has also sustained the same but primarily for the reason that assesse has failed to produce any details/documents or submissions at the appellate stage.
4. The ld. AR has reasserted the fact as cited before ld. Tax authorities below.
5. Ld. DR has submitted that assesse has been non-compliant
6. After considering the facts and circumstances we find that while raising grounds before ld. First Appellate Authority assesse had given a complete reasoning based on facts and documents including the assertion that how the HUF entities came into existence and continued to be recognized of the ld. Tax authorities below. As for completeness we reproduce para 2.1 of the impugned order.
“2.1 Aggrieved by the order of the Assessing Officer, the appellant filed appeal by taking following grounds of appeal:- “
(1) THAT the assessment order passed by the learned Assessing Officer, in the Appellant’s case, being ab initio void and ultra vires, without jurisdiction, as envisaged by law, was against all cannons of law, justice and equity and the skipping over the submissions made by the appellant in this behalf is without any legal sanction or justification.
(2) THAT the above assessment order passed by the learned Assessing Officer has been passed without appreciating the legal and factual position of the case in its true and proper perspective.
(3) THAT having regard to the acceptance of the status of the Hindu Undivided Family of D.r A P Mittra and Brothers since 1936-37, on the death of Late Dr. I T Mittra in 1935, his three sons voluntarily blended and had thrown the properties acquired on the death of their father in common stock both in term of possession and ownership and there was nothing under DayaBhaga School of Law by which they could be prevented from forming joint family, in as much as the finding of the learned Assessing Officer, is based on a misconception of law and mis appreciation of the legal position as well as against the findings already determined in favour of the appellant.
(4) THAT the learned Assessing Officer failed to visualize that after the partition of the erstwhile Hindu Undivided Family of Dr. A P Mittra and Brothers, there came in to existence two separate Hindu Undivided Families, namely Dr. A P Mittra and Sons and Shri K P Mittra (HUF). The properties that Shri K P Mittra received on partition became the properties of the smaller Hindu Undivided Family of Shri K P Mittra (HUF). Shri K P Mittra was the Karta of the HUF constituted by himself and his family members. Separate income tax and wealth tax assessments of the aforesaid Hindu Undivided Families, were made thereafter.
(5) THAT the learned Assessing Officer has miserably failed to weigh the evidence in its proper perspective and has otherwise misconstrued evidence in as much as in a final decree of partition passed in Suit No. 259 of 1970, by Hon’ble Justice B CMishra in the High Court of Delhi, by virtue of which Shri DevranjanMittra, Shri K P Mittra and Shrimati Kamala Mittra, were declared to be one third share each of the Hindu Undivided family of Shri K P Mittra (HUF).
(6) THAT an order was passed under section 171(3) of the Income Tax Act, 1961, dated 30th March, 1974, by the Income Tax Officer, District III (28), New Delhi, in the case of Shri K P Mittra (HUF), in which the claim for partition was duly accepted. As per an assessment order dated 30th March, 1974, passed under section 143 (3) of the Act, for the assessment year 1971- 72, wherein the claim for partition was also accepted, have been disregarded without any rhyme or reason.
(7) THAT in view of facts and circumstances of the case, the remarks given, reasons advanced and inferences drawn by the learned Assessing Officer, there was no warrant at all in including income of Rs. 27,40,147/-, belonging to Shri DevranjanMittra (HUF), when there was no or new material for holding otherwise.
(8) THAT the assessment framed by the learned Assessing Officer, in the Appellants case is against the legal provisions as well as contrary to the factual aspects of the case, which has been wholly misunderstood by him, while resorting to a huge addition of Rs. 27,40,147/-, from additional income from house property, when the said income wholly and exclusively belonged to Shri DevRanjanMittra (HUF), a regular income tax assessee, in respect of Flat No. 405 and 412 and Flat No. 204, 205 and Loft No. 1, Kailash Building, 26, Kasturba Gandhi Marg, New Delhi, which were let out, in-asmuch as his findings are based on mere surmises, conjectures and irrelevant consideration.
(9) THAT the learned Assessing Officer, failed to appreciate that the alleged additional income from property of Rs. 27,40,147/-, belonged to Shri DevRanjanMittra (HUF), who is a separate and distinct legal entity, which filed its return of income and has been duly assessed, in as much as the said addition to the total income is arbitrary, wholly uncalled for and tantamount to double taxation of the same income and as such is liable to be deleted.
(10) The learned Assessing Officer, has grossly erred in considering the claim of House Tax at Rs. 11,82,830/-, as against aggregate payments of Rs. 46,33,650/-, made towards House Tax.
(11) THAT the learned Assessing Officer, grossly erred in restricting the claim of tax deducted at source amounting to Rs. 198,44,892/-, to only Rs. 48,258/-, without any rhyme or reason.
(12) THAT relief as per grounds of appeal may be allowed and the appellant be permitted to add, amend, delete or substitute any ground of appeal before or at the time of hearing.”
7. After given thoughtful consideration to the material on record and submissions we find that only controversy to determine is if the ld. Tax authorities were correct to hold that the assesse being a Bengali does not have right to be in joint hindu family as allegedly under Dayabhag law there is no concept of HUF. We find that in order to assert this proposition ld. Tax authorities have not relied any judicial precedent. However, we find that Hon’ble Calcutta High Court in CIT Vs. PN Talukdar (1982) 135 ITR 628 (Cal) and in CIT Vs. Dr. A.K. Basu (1991) (91) CTR (Cal 155) recognized the existence of hindu undivided family as an accessible unit by relying the decision of Hon’ble Supreme Court in CWT Vs. Smt. Champa Kumari Singhi & Others (1972) AIR 2119. Thus, we are inclined to set aside the findings of ld. Tax authorities below. The grounds raised are sustained. The appeal is allowed. The ld. Assessing Officer is directed to delete the additions with a liberty to make additions in the hands of HUF as per law.
Order pronounced in the open court on 10.07.2026
