9911796707
TMI Blog1982 (5) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... nto force on 1st December 1976. The Act in its preamble says that it is being enacted as it is expedient to abolish the joint family system among Hindus in the State of Kerala. Under section 3 of the Act, on and after the commencement of the Act, no right to claim any interest in any property of an ancestor during his or her life time which is founded on the mere fact that the claimant was born in the family of the ancestor shall be recognised in any Court. Under section 4 of the Act, all members of an HUF governed by the Mitakshara Law holding any coparcenary property on the day the Act came into force, shall, with effect from that day, be deemed to hold it as tenants-in-common as if a partition had taken place among all the members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wealth from tax for the assessment year 1970-71, after the coming into force of the Kerala Joint Hindu Family System (Abolition) Act. The Single Judge who decided the case on 28th January, 1981 held that if there had been no prior assessment on a HUF, no proceedings could be initiated under theWealth-taxAct against the family as such after the family has become disrupted by partition. The decision of the Single Judge was attacked by the Revenue in Writ Appeal No. 159 of 1981. A Division Bench of the Kerala High Court vide judgment dated 18th August, 1981 agreed with the Single Judge in quashing the notice though for reasons which are not quite the same as the learned Single Judge found. The division Bench in the judgment dated. 18th August, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the family can be deemed to continue for the purposes of assessment under the fiction of continuance in sub-s (2) of section 20 and in that view the assessment is sustainable. It has also been contended that the assessee has not objected to the assessment on any such ground before the WTO and the ground has been raised for the first time in the second appeal only. 5. The question that falls for consideration is whether there had been disruption of the HUF before the relevant valuation date under the provisions of the Kerala Act 30 of 1976 and therefore the assessment on that family is not valid. Where an HUF is disrupted and the erstwhile family property is distributed in specific shares or definite portion, the property comes into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been disrupted before the relevant valuation date and the family cannot be considered to be an HUF coming within the ambit of section 3. There can be no assessment on that family under the provisions of section 20(1) of the Wealth-tax Act. 6. The Kerala High Court in considering the scope of section 20 of theWealth-taxAct in the case of WTO v. K. Madhavan Nambiar in WTA No. 159 of 1981 has also observed thus : "Legislature has made provision in section 20 of the Wealth-tax Act to assess a Hindu joint family even after its extinction by a partition. So despite a partition the provision could be used to assess the family. Evidently the situation arising by reason of extinction by a statutory enactment was not concerned at that time. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly as tenants-in-common as if on that day there was a partition of the joint family. Thus on 31st March, 1977, the relevant valuation date for the assessment year 1977-78, this HUF did not exist as a distinct taxable entity or unit for taxation. The properties of the erstwhile family were not owned by the HUF as such on the relevant valuation date. The members have merely unity of possession pending physical division. Applying the ratio of the decision in the case of K. Madhavan Nambiar, we have to hold that the HUF was extinct by statute and after its extinction there would be no charge to tax. It follows that no assessment could be made on the family as such for assessment year 1977-78. The assessment against the assessee HUF as such is u ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
