Section 171(1) — the law in short
What the courts have decided on section 171(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.171: the fiction that a family assessed as undivided continues until a finding of partition is recorded, the s.171(3) order, and what the Explanation means by "partition"
CBDT Circulars & InstructionsCuts both ways
Our family divided years ago and each of us has been showing his own income since. The Assessing Officer has issued a notice to the HUF for those very years and says the HUF is still alive. Can he do that when we have actually separated?
Yes, unless and until a finding of partition has been recorded under s.171. Section 171(1) creates a fiction: a Hindu family hitherto assessed as undivided is deemed for the purposes of the Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under the section. The machinery is s.171(2) and (3) — a claim made at the time of an assessment under s.143 or s.144, an inquiry after notice to all the members, and a finding recorded by the Assessing Officer as to whether there has been a total or partial partition and the date on which it took place. Severance of status is not enough: the Explanation defines "partition" as a physical division of the property where the property admits of a physical division, and expressly provides that a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.