HIRDAY NARAIN vs INCOME-TAX OFFICER, BAREILLY

The Supreme Court held that Section 16(3)(a)(ii) of the Income-tax Act, 1922 does not apply to the income of a Hindu Undivided Family (H.U.F.) post-partition. The Court ruled that the Income-tax Officer (I.T.O.) must rectify the assessment as the income from November 19, 1949, onwards should not be assessed as that of the H.U.F. The High Court's view that the rectification under Section 35 was discretionary was incorrect, establishing that the I.T.O. is obligated to exercise his authority when the conditions for rectification are met.