Under the Income Tax Act, 1961, the Hindu Undivided Family (HUF) is considered a separate tax entity, distinct from its members. As such, the HUF is responsible for filing its tax returns and paying taxes on any income earned by the family. However, if the HUF is found to have committed any offence under the Income Tax Act, such as tax evasion or providing false information, the question arises as to who will be held liable for prosecution.
In such cases, the Karta of the HUF is usually held liable for prosecution. The Karta is the head of the family and is responsible for managing the affairs of the HUF. The Karta is also responsible for filing the HUF’s tax returns and paying taxes on its behalf. As such, the Karta is held accountable for any offence committed by the HUF under the Income Tax Act.
It is important to note that the liability of the Karta for prosecution does not absolve the other members of the HUF of their responsibility. The other members of the HUF may also be held liable for prosecution if they are found to have aided or abetted the offence committed by the HUF. For example, if a member of the HUF knowingly provides false information in the tax return filed by the Karta, they may also be held liable for prosecution.
The Income Tax Act also provides for the prosecution of the HUF as a separate legal entity. In such cases, the HUF is held liable for the offence committed and can be prosecuted accordingly. However, it is important to note that the HUF can only be prosecuted if it is found to have committed the offence on its own and not merely as a result of the actions of its members.
In cases where the HUF is found to have committed an offence under the Income Tax Act, the tax authorities may initiate prosecution proceedings against the Karta and/or other members of the family. The prosecution proceedings are initiated by filing a complaint with the appropriate court or tribunal.
the liability for prosecution for offences committed by the Hindu Undivided Family under the Income Tax Act rests primarily with the Karta. However, the other members of the family may also be held liable if they are found to have aided or abetted the offence committed by the HUF. The Income Tax Act also provides for the prosecution of the HUF as a separate legal entity in certain cases. It is important for members of the HUF to ensure compliance with the provisions of the Income Tax Act to avoid any liability for prosecution.