Bengali Hindu landlord’s Rs 1.89-crore rental income faced tax dispute over HUF status: Why ITAT Delhi gave relief

You may have heard that Indian Hindus primarily follow two schools of law- Mitakshara and Dayabhaga. In West Bengal and Assam, Hindus follow the Dayabhaga school of law, while the rest of India follows the Mitakshara. But what about Bengali individuals living in Delhi? This is the exact dilemma that Late Mr Mittra from Greater Kailash-1 faced during a dispute with the Income Tax Department.

Mr Mittra, a landlord, had filed his income tax return (ITR) declaring rental income, but it was flagged by the Computer-Assisted Scrutiny Selection (CASS) system of the Income Tax Department. CASS picked Mittra’s ITR as his Form 26AS showed that he had earned Rs 1.89 crore as rent from properties owned personally. However, Mittra declared Rs 1.45 crore of that rental income under his Hindu Undivided Family’s (HUF) name and the rest under his individual ITR. This discrepancy in reporting led to a tax dispute between him and the Income Tax Department.

The Income Tax Assessing Officer (AO) from the South Delhi unit decided that since Mittra belonged to the Bengali community, where the concept of HUF does not exist due to the Dayabhaga School of Law governing Bengal, he couldn’t benefit from income reported in HUF’s ITR. Therefore, the AO decided that the entire Rs 1.89 crore rental income had to be disclosed in Mittra’s personal individual ITR.


The Commissioner of Appeals CIT(A) agreed with the tax officer’s view and upheld the decision, but mainly because Mittra had failed to produce any details/ documents or submissions at the appellate stage.

Sadly, Mittra died before this judgement could be delivered, so his wife, Mrs Mittra, continued her husband’s tax case, and emerged victorious on July 10, 2026, in ITAT Delhi. Chartered Accountant R.K. Kapoor represented her before a bench of ITAT Delhi comprising Anubhav Sharma, Judicial Member and Amitabh Shukla, Accountant Member.

Mihir Tanna, associate director, S.K Patodia LLP says that as per the law, HUF has as a separate taxable entity. It is the same thing as “Joint Hindu Family”. It has not been defined under the Income Tax Act.

Tann highlights that in the case of CWT v. Smt. Champa Kumari Singhi , the expression "Hindu undivided family" appearing in Section 3 of the W.T. Act, 1957, fell for consideration before the Supreme Court who observed that the expression included a "Jain undivided family".

Tanna says: “The Supreme Court reiterated that the words "Hindu undivided family" were not used in the context of statutes with reference to one school of Hindu law only, but to all schools of law.”

Keep reading to understand why Mrs Mittra won the case and what the Hindus following the Dayabhaga system need to know.

Why did the taxpayer win the case in ITAT Delhi?

Surana says that Mr Mittra succeeded in this case because ITAT Delhi found that the Income Tax Department’s case was based on an incorrect legal premise that a Bengali governed by the Dayabhaga School of Hindu Law cannot have an HUF.

Surana says: “ITAT Delhi held that this view was contrary to settled judicial precedents of the Supreme Court and the Calcutta High Court recognising the validity of HUFs under the Dayabhaga School.”

Surana says that ITAT Delhi also noted that Mr Mittra’s HUF had been consistently recognised and separately assessed by the Income-tax Department for decades, with its partition duly accepted under Section 171 of the Income Tax Act, 1961.

Surana says: “Since the rental income had already been assessed in the hands of the HUF, taxing it again in the individual's hands would amount to impermissible double taxation.”

Summary of the judgement

Chartered Accountant Suresh Surana explained to ET Wealth Online that in this case, the AO rejected the explanation on the ground that allegedly under the Dayabhaga School of Hindu Law, there is no concept of an HUF and, therefore, the rental income reported under the HUF’s ITR should be assessed in Late Mr Mittra’s hands.

Based on this reasoning, the AO made an addition of approximately Rs 27.40 lakh under the head "Income from House Property".

When the case reached ITAT Delhi’s G Bench, Mrs Mittra demonstrated that their Bengali HUF had existed for many decades and the same was recognised by the Income-tax Department for several decades as well.

Mrs Mittra also gave an overview of how their Bengali HUF came into existence. She told ITAT Delhi that their Bengali HUF had originated pursuant to a family partition. This partition was also accepted under Section 171 of the Income Tax Act, 1961, and since then, their Bengali HUF had consistently been assessed as a separate taxable entity.

So, Mrs Mittra argued that if the Income Tax Department taxed the same rental income again in Mr Mittra’s individual assessment, it would amount to double taxation.

ITAT Delhi observed that the Income Tax department had not cited any judicial precedent to support its conclusion that a Bengali governed by the Dayabhaga School cannot constitute an HUF.

On the contrary, it relied on the judgments of the Hon’ble Calcutta High Court in CIT v. P.N. Talukdar (135 ITR 628) case and the CIT v. Dr. A.K. Basu (91 CTR 155) case, following the Hon’ble Supreme Court's decision in CWT v. Smt. Champa Kumari Singhi (1972) case.

Accordingly, ITAT Delhi deleted the addition made in Mr Mittra's hands while granting liberty to the AO to examine the matter in the HUF's assessment, if required under law.