The status accorded to the assessee under an order passed under Section 171 cannot be altered by having recourse to the provisions of Section 147.

D.V. Shylendra Kumar, J.

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 :

"(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that D. C. Basappa was assessable in the status of individual in respect of the income from properties retained to his share vide partition deed dated March 15, 1975 ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that D. C. Basappa was not assessable in the status of a Hindu undivided family even after the partition dated March 15, 1975 ?"

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.

It also transpires that the assessee's status as an individual had been recognised by effecting the said change as per the provisions of Section 171 of the Act accepting the claim of partition said to have been made on March 15, 1975, as regards the husband, wife and members of the family. Subsequent to the passing of the order under Section 171 regarding partition and effecting change in the status of the assessee from Hindu undivided family to individual, it appears that there was an attempt on the part of the Revenue to have the order passed under Section 171 rectified by having recourse to Section 154 of the Act. Though a rectification order was passed it did not last long as the assessee appealed against this order and the order of rectification was set aside by the appellate authority.

3. The Revenue having failed in its attempt to alter the status of the assessee, at least from the assessment year 1979-80 onwards wanted to bring about this change by having recourse to the provisions of Section 147 of the Act. Notice was issued under Section 148 of the Act calling upon the assessee to file a revised return on the premise that the income returned for the assessment year 1979-80 had been assessed at a lower rate resulting in loss to the Revenue. The assessee did not respond to this notice but filed a nil return indicating that the Hindu undivided family did not have any property or income and was not assessable.

4. 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.

The assessee appealed to the Appellate Commissioner and by an order dated November 3, 1998, the Appellate Commissioner allowed the appeal purporting to follow a decision of the Income-tax Appellate Tribunal, Hyderabad Bench in Pr