6 days ago
Tribunal Backs Bengali HUF Claim in ₹1.89-Crore Rental Case
Devranjan Mittra earned rent from properties held personally and through his family entity.
He reported most of the rent in the HUF’s tax return and the rest in his own return.
The tax department said all the money should be taxed as his personal income.
It relied on the Dayabhaga school of Hindu law, followed by Bengali Hindus.
Mittra’s family said their HUF had existed for decades and had previously been accepted by the tax department.
They also said taxing the same rent again personally could result in double taxation.
After Mittra died, his wife Sagorika continued the case.
The tribunal ruled in the family’s favor but allowed further examination of the HUF’s assessment if legally necessary.
Devranjan Mittra reported ₹1.45 crore of ₹1.89 crore rental income through his HUF and the remainder in his individual return for AY 2023-24.
The tax department scrutinized the return after Form 26AS showed higher rental receipts than reported.
The assessing officer rejected the HUF claim, arguing that Bengali Hindus follow the Dayabhaga school, which he said does not recognize HUFs.
The Commissioner of Appeals upheld the decision, while noting that Mittra had not submitted details or documents during the appeal.
On July 10, 2026, ITAT Delhi deleted the addition and allowed the department to examine the income in the HUF’s assessment if required.
- Who
- Devranjan Mittra, later represented by his wife Sagorika Mittra, and the income tax authorities.
- What
- A dispute over whether ₹1.45 crore of rental income could be reported through Mittra’s HUF rather than entirely in his individual tax return.
- Where
- The case was decided by ITAT Delhi and involved a taxpayer residing in South Delhi.
- When
- The dispute concerned AY 2023-24; ITAT Delhi issued its decision on July 10, 2026.
- Why
- The tax department rejected the HUF reporting because the assessing officer said Bengali Hindus follow the Dayabhaga school, which does not recognize HUFs.
Tax Department’s Position
Taxpayer’s Position
Whether a Bengali HUF could be recognized
Tax Department’s Position
The assessing officer argued that Bengali Hindus follow the Dayabhaga school and therefore Mittra could not report rental income through an HUF.
Taxpayer’s Position
Sagorika Mittra argued that their Bengali HUF had existed for decades and had repeatedly been recognized and assessed separately by the tax department.
Treatment of the rental income
Tax Department’s Position
The assessing officer said the entire rental income should be treated as Mittra’s individual income; the Commissioner of Appeals upheld the decision.
Taxpayer’s Position
The family argued that taxing the same income again in Mittra’s individual assessment would result in double taxation.
Tribunal’s reasoning
Tax Department’s Position
The tax department had not cited judicial precedent supporting its conclusion that a Bengali governed by the Dayabhaga school cannot constitute an HUF.
Taxpayer’s Position
ITAT Delhi relied on earlier judgments, deleted the addition in Mittra’s hands, and allowed the department to examine the HUF’s assessment if required by law.
Key facts
- Total rental income
- ₹1.89 crore
- Income reported through HUF
- ₹1.45 crore
- Assessment year
- AY 2023-24
- Scrutiny trigger
- Form 26AS reflected higher rental receipts than those reported
- Taxpayer
- Devranjan Mittra
- Legal representative
- Sagorika Mittra, Mittra’s wife
- Decision
- ITAT Delhi deleted the addition on July 10, 2026
Sources
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