1974 (11) TMI 2 - SC - Income Tax

Status of an individual for the assessment - Expression Hindu undivided family - Whether an unmarried male Hindu on partition of a joint Hindu family can be assessed in the status of a Hindu undivided family even though no other person besides him is a member of the alleged family - HELD THAT - It is well-settled that a Hindu joint family consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. A Hindu coparcenary is a much narrower body than the joint family it includes only those persons who acquire by birth an interest in the joint or coparcenary property these being the sons grandsons and great-grandsons of the holder of the joint property for the time being. The plea that there must be at least two male members to form a Hindu undivided family as a taxable entity has no force. Under Hindu law a joint family may consist of a single male member and widows of deceased male members. The expression Hindu undivided family in the Income-tax Act is used in the sense in which a Hindu joint family is under stood under the various schools of Hindu law (see Attorney-General of Ceylon v. Ar. Arunachalam Chettiar 1957 (7) TMI 36 - PRIVY COUNCIL and Gowli Buddanna 1966 (1) TMI 22 - SUPREME COURT ). In the case of Commissioner of Income-tax v. Rm. Ar. Ar. Veerappa Chettiar 1969 (12) TMI 1 - SUPREME COURT this court observed that under the Hindu law it is not predicated of a Hindu joint family that there must be a male member. It was accordingly held that so long as the property which was originally of the joint Hindu family remains in the hands of the widows of the members of the family and is not divided among them the joint family continues. One thing significant which follows from the above is that the assessment in the status of a Hindu undivided family can be made only when there are two or more members of the Hindu undivided family. There is admittedly no female member in existence who is entitled to maintenance from the above-mentioned property or who is capable of adopting a son to a deceased coparcener. Even if the assessee-appellant in future introduces a new member into the family by adoption or otherwise his present full ownership of the property cannot be affected. Such a new member on becoming a member of the coparcenary would be entitled to such share in the property as would remain undisposed of by the assessee. In order to determine the status of the assessee for the purpose of income-tax we have to look to the relatives as they exist at present and it would not be correct to project into the matter future possibilities which might or might not materialise. This would indeed amount to speculation and the same is not permissible. Excursions to the realm of speculation may be legitimate and justified when one is engaged in the study of philosophy and metaphysics; they are wholly unwarranted when one is dealing with the mundane subject of the status of the assessee for the purpose of the income-tax assessment. For this purpose we have to look to facts as they exist and emerge from the record and not to what they may or may not be in future. As things are at present in the instant case there can in our view be hardly any doubt that the assessee is an individual and not a family. In conclusion the court dismissed the appeal affirming that the appellant should be assessed as an individual rather than a Hindu undivided family for the specified assessment year.

Summary

The Supreme Court considered an appeal against the judgment of the Mysore High Court regarding the assessment status of an individual for the assessment year 1964-65. The appellant, C. Krishna Prasad, had previously been assessed as an individual but later claimed to be assessed as a Hindu undivided family. The key issue was whether an unmarried male Hindu could be assessed as a Hindu undivided family when no other member besides him existed.The Court analyzed the definition of "person" under section 2(31) of the Income-tax Act, which includes individuals and Hindu undivided families. It emphasized that a family inherently consists of multiple persons related by blood or marriage, and a single individual cannot constitute a family. The Court cited various definitions of "family" to support its interpretation that a family requires a group of individuals. It concluded that a Hindu undivided family is distinct from an individual, and the appellant could not be assessed as a family when he was the sole member.The Court also discussed the concept of a Hindu joint family and coparcenary, highlighting that a Hindu joint family includes all descendants from a common ancestor and can even consist of a single male member and widows. It clarified that the expression "Hindu undivided family" in the Income-tax Act aligns with Hindu law principles and requires at least two members for assessment as a family entity.Furthermore, the Court addressed the appellant's claim to be the absolute owner of the property obtained through partition and the potential introduction of new family members in the future. It emphasized that the assessment should be based on existing facts and not speculative future scenarios. The Court rejected the appellant's reliance on a previous case involving watan lands, stating that the adoption in that case did not establish a joint Hindu family with a single member.Ultimately, the Court found no merit in the appeal and dismissed it with costs, affirming that the appellant should be assessed as an individual and not as a Hindu undivided family.In conclusion, the Supreme Court clarified the distinction between an individual and a Hindu undivided family for income tax assessment purposes, emphasizing the requirement of multiple members for the latter. The judgment reaffirmed that a single individual cannot be considered a family entity under the Income-tax Act.