1. only point involved in this appeal pertains to assessee's claim for partial partition. 2. assessee is HUF and is assessed as such since assessment year 1968-69. members of HUF are Shri S. C. Mehta, his wife Smt. K. S. Mehta and their minor son Master C. S. Mehta and mother of karta, Smt. R. C. Mehta. assessment year is 1980-81 and relevant previous year ended on 31-3-1980. 3. On 30-5-1979, members of assessee-HUF made partial partition. Under this partition, out of Rs. 50,000, Rs. 40,000 was allotted to Shri S. C. Mehta as karta of HUF consisting of Shri S. C. Mehta and minor son C. S. Mehta and Smt. K. S. Mehta. balance of Rs. 10,000 was allotted to Smt. R. C. Mehta. assessee-HUF filed its return of income on 26-1-1980 along with deed of partial partition dated 30-5-1979 with request to ITO to recognise partial partition as per provisions of section 171(3) of Income-tax Act, 1961 ('the Act'). ITO, however, declined to recognise partial partition with following remarks: "2. During year of account assessee has claimed partial partition which has taken place on 30-5-1979. partial partition was made by assessee after 31-12-1978 and hence it is not recognised as per section 171(9) of Income-tax Act, 1961 and therefore assessee's claim is rejected and income from partition amount of Rs. 50,000 is added in total income of assessee." Consequently, he included interest income arising from Rs. 50,000 in total income of assessee-HUF. 4. Being aggrieved by order of ITO non-recognizing partial partition, assessee went up in appeal before AAC. AAC, however, upheld action of ITO, in following manner: "It is contended by appellant that retrospective amendment of section 171(9) is ultra vires. It is held by Supreme Court in case of Kanpur Vanaspati Stores v. CST AIR 1973 SC 2373 that none can challenge validity of provisions of Act before authorities constituted under Act. Therefore no challenge can be made before ITO/AAC regarding vires of section 171. Since partial partition has taken place in this case after 31-12-1978, ITO was justified in refusing to recognise same." 5. Being aggrieved by order of AAC, assessee has come up in appeal before Tribunal. learned counsel for assessee vehemently argued that since partial partition had taken place on 30-5-1979, income- tax authorities were not justified in invoking provisions of section 171(9) , which was brought on statute by Finance (No. 2) Act, 1980 with effect from 1-4-1980. According to learned counsel for assessee, Parliament has no right to bring provisions regarding non-recognition of partial partition retrospectively from 31-12-1978. In support of his submission, learned counsel for assessee relied on decision of Hon'ble Supreme Court in case of D. Cawasji & Co. v. State of Mysore, Vol. 17, P. 167 of unreported judgments (Supreme Court). head notes of said case read as under: "Mysore Sales Tax (Amendment) Act, 1969 - Section 3 - Validity of - Enhancement of rate of duty from six and half per cent to 45 per cent with retrospective effect is arbitrary and unreasonable - Amendment not removing lacuna - Held, amendment is invalid and unconstitutional. enhancement of rate of duty from six and half per cent to 45 per cent with retrospective effect is in facts and circumstances of case clearly arbitrary and unreasonable. defect of lacuna is not even sought to e remedied and only justification for steep rise in rate of duty by amended provision is to nullify effect of binding judgment. vice of illegal collection in absence of removal of illegality which led to invalidation of earlier assessments of basis of illegal levy, continues to taint earlier levy. Section 2 of impugned amendment to extent that it imposes higher levy of 45 per cent with retrospective effect from 1st day of April, 1966 and section 3 of impugned Act seeking to nullify judgment and order of High Court are invalid and unconstitutional." He, therefore, urged that ITO should be directed to recognize p r t i l partition effected by members of assessee-HUF and, consequently, interest income arising on Rs. 50,000 should be deleted from total income of assessee. 6. learned representative for department, on other hand, kly relied on order of AAC. Apart from decision of Hon'ble Supreme Court mentioned in order of AAC, he also relied on decision of Hon'ble Supreme Court in case of K. S. Venkataraman & Co. (P.) Ltd. v. State of Madras [1966] 60 ITR 112, wherein, it has been held that Tribunal, which is creature of statute, cannot question vires of provisions under which it functions. He, therefore, urged that since Tribunal has no power to decide validity of provisions of section 171(9) , appeal filed by assessee should be dismissed. 7. I have carefully considered rival submissions of parties and I do not find any substance in appeal preferred by assessee in view of aforesaid decision of Hon'ble Supreme Court in cases of Kanpur Vanaspati Stores v. CST AIR 1973 SC 2373 and K. S. Venkataraman & Co. (P.) Ltd. (supra). However, since learned counsel for assessee was very vehement in stand taken on behalf of assessee, I would like to discuss some of aspects of point involved in present appeal. 8. At this state, it would be necessary to advert to circumstances in which provisions of section 171(9) were brought on statute. In Circular No. 281 dated 22-9-1980 (see TAXMANn's Direct Taxes Circulars, Vol. 2, 1985 edn., p. 830) issued by CBDT giving explanatory notes to proposals contained in Finance (No. 2) Bill, 1980, relevant portion concerning amendment brought in section 171 , reads as under: "Modification of provision relating to partial partition of Hindu undivided families - Section 171 - 31.1 Under Hindu law, Hindu undivided family is entitled to effect partition which may be total or partial. Where Hindu undivided family undergoes total partition, entire joint family property is divided among all coparceners and family ceases to exist as undivided family. partial partition, on other hand, may be partial as regards persons constituting joint family or as regards properties belonging to joint family or both. In partial partition as regards persons constituting family one or more coparceners may separate from others and remaining coparceners may continue to be joint. In partial partition as regards property joint family may make division and severance of interest in respect of part of joint estate while retaining their status as joint family and holding rest of properties as joint and undivided property. 31.2 While under Hindu law, joint family may make division and severance of interest in respect of joint estate while retaining their status as joint family, Income-tax Act does not recognise partial partition in status alone and where Hindu undivided family had been assessed to income as such, it continues to be regarded as Hindu undivided family unless property has been partitioned by metes and bounds. These provisions are contained in section 171 and apply equally in case of total as well as partial partition. In spite of measures taken in recent years, Hindu undivided family continues to be used as medium for reduction of proper tax liability. This appears to be specially rue in cases where multiple Hindu undivided families are created by effecting partial partitions as regards persons constituting joint family or as regards properties, belonging to joint family or both. 31.3 With view to curbing practice of creating multiple Hindu undivided families by making partial partitions, Finance Act has inserted new-sub-section (9) in section 171 whereunder partial partitions of Hindu undivided families effected after 31st December, 1978 will not be recognised for tax purposes. new sub-section (9) which will apply in cases of Hindu undivided families which have hitherto been assessed in status of Hindu undivided family, has made following provisions in this regard: 1. In case where partial partition of Hindu undivided family has taken place after 31st December 1978, no claim that such partial partition had actually taken place will be enquired into under sub-section (2) of section 171 and Income-tax Officer shall not record finding as to whether there has been total partition of joint family property under sub-section (3) of that section. further, any finding regarding partial partition recorded under said subsection (3) shall be null and void and of no legal effect. 2. Such family shall continue to be assessed as if no such partial partition has taken place, i. e., property or source of income shall be deemed to continue to belong to hindu undivided family and no member shall be deemed to have separated from family. 3. Each member or group of members of such family immediately before such partial partition and family shall be jointly and severally liable for any tax, penalty interest, fine or other sum payable under Income-tax Act by family in respect of period, whether before or after such partial partition. several liability of any member or group of members of such family shall be computed according to proportion of joint family property allotted to him or it on such partial partition. 31.4 This amendment has come into force with effect from 1st April, 1980 and is accordingly applicable in relation to assessment year 1980-81 and subsequent years. " (p. 859) It is also necessary to keep in mind law regarding amendment brought in Act. Based on case law, Kanga and Palkhivala, in their book Law and Practice of Income-tax, Seventh edn., Vol. 1 have summarised legal position as under: "Law to be applied is that in force in assessment year. - Though subject of charge is income of previous year, law to be applied is that in force in assessment year, unless otherwise stated or implied; and any amendment which is in force at beginning of relevant assessment year must govern case though amendment is made after income under assessment is earned. In other words, Income-tax Act as it stands amended on 1st April of financial year must apply to assessment for that year. Any amendments in Act which come into force after 1st April of financial year, would ITO apply made after amendments come into force. But any amendment of Act, though effected after close of assessment year but before assessment is made, would still be given retrospective effect and would apply to assessment, if amendment is purely procedural and affects machinery for collecting tax rather than tax itself. If after assessment order is passed but pending appeal or reference, legislation with retrospective effect, comes into operation, deciding Tribunal must give effect to such legislation... " (p. 83) 9. Keeping in mind aforesaid two extracts from circular issued by CBDT as well as book, it is quite apparent that stand taken on behalf of assessee is devoid of any merits. 9.1 Apart from this, under section 171(3) , ITO is not only required to record finding as to claim of partial partition/partition is true or not but he is also required to indicate on which date partition/partial partition has taken place - Kalloomal Tapeswari Prasad (HUF) v. CIT [1982] 133 ITR 690 (SC). It is partinent to note that in instant case, assessee had filed its return of income on 26-7-1980 along with application for recognition of partial partition which took place on 30-5-1979. Therefore, earliest date on which ITO could have applied his mind vis-a-vis assessee's application for partial partition would be 26-7-1980. Now by that date, provisions of section 171(9) were inserted in statute with effect from 1-4-1980. As ITO is required to pass orders under Act, on basis of law prevalent at beginning of relevant assessment year, he could not have ignored provisions of section 171(9). It is not in dispute that provisions of section 171(9) prohibits recognition of partial partition which has taken place after 31-12-1978. In this view of matter, I do not find any infirmity in orders of income-tax authorities. I would, therefore, uphold their action in this regard. 10. In result, appeal is dismissed. *** CHANDULAL GULABCHAND MEHTA (HUF) v. INCOME TAX OFFICER