Case Law Details
Shri S. Krishnappa (HUF) Vs DCIT (ITAT Bangalore)
The issue raised by the assessee that the HUF was not in existence when the assessment proceedings have been conducted and the Assessment Order has been passed on HUF and therefore, the entire proceedings are rendered null and void and it should be held that the Assessment Order is bad in law on the facts and circumstances of the present case.
It comes out that it was held by Hon’ble Karnataka High Court that no assessment can be made on a HUF if at the time of assessment, it has become divided because at that point of time, there was no undivided family in existence which could be taxed though when the income was received in the year of accounts, the family was joint. In the present case also, the Assessment Order is dated 31.012.2010 and as per the Assessment Order, survey under section 133A of the Income Tax Act, 1961 was carried out on 10.09.2009 and notice under section 148 of the IT Act, 1961 was issued and served on the assessee on 22.09.2009. As per para 9 reproduced from the order of CIT(A), it is noted by learned CIT(A) that HUF was disrupted by partition on 22.08.2009. Hence, it is seen from the facts of the present case that on 10.09.2009, when the survey action was conducted under section 133A of the IT Act and also on 22.09.2009 when notice under section 148 of the IT Act, 1961 was issued by the AO and on dated 31.12.2010 when the Assessment Order was passed by AO under section 143 r.w.s. 147 of the IT Act, 1961 for Assessment Year 2005-06, the HUF was not in existence because the same was already partitioned on 22.08.2009. This is the basis of the order of the learned CIT(A) that the Assessment Year involved is 2005-06 and at that point of time, HUF was in existence but as per the judgment of Hon’ble Karnataka High Court rendered in the case of CIT Vs. CIT Vs. Puttaranga Naika (HUF) (supra), this situation is also considered and it is held that if on the date of assessment, the HUF is not in existence, then such HUF cannot be taxed even for an earlier year when the income was received and the HUF was in existence. Respectfully following this judgment of Hon’ble Karnataka High Court, we hold that the present Assessment Order is bad in law and the same is accordingly quashed. In view of this decision, no other ground requires any adjudication. In the result, assessee’s appeal is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is filed by the assessee and the same is directed against the order of learned CIT(A)-4, Bengaluru, dated 20.01.2011 for the Assessment Year 2005-06.
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