No law prevents Bengali’s right to be in Hindu Joint Family (HUF) – ITAT

Under Dayabhag law there is nothing to prevent Bengalis to be in Hindu Joint Family (HUF)

In a recent judgment, ITAT has held that Bengali have right to be in Hindu Joint Family (HUF) against the Assessing Officer (AO) holding that under Dayabhag law there is no concept of HUF.

ABCAUS Case Law Citation:
5182 (2026) (07) abacus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A)/NFAC in confirming the addition of rental income in individual hands than in the hands of HUF..

The return filed by the assessee was selected for scrutiny by CASS. It was noticed that as per Form 26AS, the rental income declared by the assesse was less that what was reported in Form 26AS.

The assessee explained that he held properties in his individual capacity as well as status of HUF and the gross rent reported in Form 26AS was partly declared as income in the status of HUF and the balance amount of rent had been offered to tax in the individual hands of the assesse

The Assessing Officer concluded that as assesse belonged to Bengali community where there is no concept of HUF being governed by Dayabhaga School of Law. Therefore, assessee was not entitled to the benefit of income reported in HUF.

Accordingly, the AO added the whole rental income in the hands of the assessee as income from house property. Penalty proceeding u/s. 270A r.w.s. 274 of the Income Tax Act, 1961 (the Act) was also initiated separately on account of under-reporting of income in consequence misreported thereof.

The CIT(A) also sustained the same but primarily for the reason that assesse had failed to produce any details/documents or submissions at the appellate stage.

Before the Tribunal, the assessee contended that after death of their father all sons including assessee voluntarily blended and had thrown the properties acquired on the death of their father in common stock both in term of possession and ownership. Further by subsequent partitions, a smaller Hindu Undivided Family came into existence and separate income tax and wealth tax assessments of the aforesaid Hindu Undivided Families, were made thereafter.

It was submitted that 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 Assessing Officer, was based on a misconception of law and mis appreciation of the legal position.

The Tribunal observed that the controversy was ao to whether the 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?

The Tribunal noted that in order to assert their proposition, the Tax authorities had not relied any judicial precedent. However, Hon’ble Calcutta High Court has recognized the existence of Hindu Undivided Family as an accessible unit by relying the decision of Hon’ble Supreme Court.

Accordingly, the Tribunal allowed the appeal and the Assessing Officer was directed to delete the additions with a liberty to make additions in the hands of HUF as per law.

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