TMI Blog1967 (1) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... t Commissioner as well as the further appeal to the Income-tax Appellate Tribunal failed. Thereafter, at his instance, the Tribunal has referred the following question for the opinion of this court : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee was not entitled to be assessed in the status of a Hindu undivided family ? " The facts and circumstances of the case, in which, or on the basis of which, the above controversy between the assessee and the department arose, were briefly these : The assessee is an Indian Christian professing the Roman Catholic faith. His ancestors were originally Hindus and later converted to Christianity. They are described as Konkani-speaking Roman Catholics. The ancestors of the assessee were at one time residents of South Kanara. It appears that the assessee's grandfather's grandfather migrated to Coorg and settled down there. On the information available, the first or almost the first person to acquire property in Coorg appears to have been the assessee's paternal grandfather called Salvadore. He acquired certain property and developed it as a coffee estate. He l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or cannot thereby constitute themselves into a Hindu undivided family under the Mitakshara law. By the time the Income-tax Appellate Tribunal came to hear the assessee's second appeal, an appeal presented by the plaintiff in the above-mentioned Original Suit No. 327 of 1950 to this court, viz., Regular Appeal No. 91 of 1957, had been decided by this court. By its judgment in that appeal pronounced on 13th July, 1964, this court confirmed the view taken by the subordinate judge. The reason why it was claimed by the assessee that the Indian Succession Act did not apply was that by virtue of a notification made by the Governor-General in Council under section 332 of the Succession Act of 1865, all native Christians in the Province of Coorg were exempted from the provisions of the said Act retrospectively from the date of the commencement of the Act itself ; rejecting various arguments stated against the applicability or availability of the said notification, this court held that the parties to the litigation, the descendants of Salvadore mentioned above, clearly came within the expression " native Christians in the Province of Coorg " and that, therefore, at no point of time were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t does not of necessity involve any change of the rights or relations of the convert in matters with which Christianity has no concern, such as his rights and interests in, and his powers over, property. The convert, though not bound as to such matters, either by the Hindu law or by any other positive law, may by his course of conduct after his conversion have shown by what law he intended to be governed as to these matters. " The position so stated is that so far as the rights in property are concerned with which the Christian religion has no concern, it was open to converts to retain the Hindu law rules relating to rights and powers in respect of property or to renounce them. In this case, according to the argument, the clear decision of this court is that the family continues to be governed by the Hindu law which applied to them before their conversion and there is no case or proof of any abandonment or renunciation of that law at any time after the conversion, right down to the day of litigation which terminated in R. A. No. 91 of 1957 on the file of this court. In Tellis v. Saldanha, the litigation was between one brother and the widow and daughter of another brother as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a passage occurring in the judgment of the Privy Council in Abraham v. Abraham and on the view taken by some of the later decisions of the Bombay High Court in regard to Cutchi Memons and Kojas. The passage relied upon occurs at pages 244 and 245 of 9 Moore's Indian Appeals and reads as follows : " Their Lordships collect from the evidence that the class known in India as 'native Christians', using the term in its wide and extended sense as embracing all natives converted to Christianity, has subordinate divisions forming again distinct classes, of which some adhere to the Hindoo customs and usage as to property ; others retain those customs and usages in a modified form ; and others again have wholly abandoned those customs and usages, and adopted different rules and laws as to their property. " The difference between one sub-class and another referred to by their Lordships in this passage no doubt supports the view that the rules of Hindu law might have been in some cases retained with modifications but not in their entirety. But the same passage supports the view that there were some sub-classes which had retained or adhered to Hindu customs and usages as to property. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment recently pronounced in T.R.C. No. 3 of 1966 pointed out that in the original theory of Mitakshara, the doctrine of right by birth is not limited to kramagatha property only but also to father's self-acquired property subject to the doctrine of pitru prasada. Even in regard to cases of what may be regarded as pure self-acquired property, the principle of Hindu law is clear that when sons succeed to self-acquired property of their father, they take it as ancestral property subject to the right by birth of their sons and will together hold it as joint family property of themselves and their sons. Hence, even if one should hold in this case, or it is possible to hold in this case, that the properties in the hands of Salvadore were originally his own self acquired properties or that even in the case of Mathias, in addition to properties inherited from Salvadore, he had his own self-acquisitions, there can be no doubt whatever that in the hands of the present assessee both those categories of property would be impressed with the character of ancestral property subject to right by birth of his sons and, therefore, joint family property of himself and his sons. Nevertheless, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of individuals including undivided families other than Mitakshara Hindu families. The arguments relating to alleged violation of article 14 principally proceed on the basis that joint families which form one class have been subjected to discriminatory treatment by giving a certain larger benefit limited to Hindu undivided families while depriving other undivided families of that benefit. We are not concerned in this case with the questions relating to article 14 of the Constitution but only with the question of interpretation. We think that the interpretation above suggested, viz., the expression " Hindu undivided family " is limited to Mitakshara families or families of persons professing Hindu religion governed by Mitakshara law, is the correct view to take not only for the reason that the same view was taken in the decision of this court referred to above but also upon principle. In the ordinary circumstances and in view of the legislative history, particularly, with reference to taxing statutes like the Indian Income-tax Act, there would never have been any doubt that the expression " Hindu undivided family " is limited to Mitakshara Hindu families. The whole discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said consideration can have a material bearing on the construction of the word 'individuals' in Entry No. 86. The tax legislation may, for convenience or other valid reasons, have made a distinction between individuals and Hindu undivided families; but it would not be legitimate to suggest that the word 'individuals' occurring in an organic document like the Constitution must necessarily receive the same construction. " It would follow from this that the same extended meaning as was given by their Lordships to Entry No. 86 of the First List need not necessarily be given to the word " individual " occurring in section 3 of the Wealth-tax Act. It is open to a taxing statute to select persons or classes or categories of persons for purposes of taxation ; it is also open to it,--without of course violating any of the fundamental rights,--to leave, out of the category of assessable persons or groups of persons who do not answer the description of the category selected for taxation. Prima facie, therefore, it is not necessary to give such extended meaning as to hold that it would comprise groups of individuals also if they are so associated together as to form one integrated unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; the latter prohibits the inclusion in the case of an individual assessee of any amount representing the value of his interest in coparcenary property. The latter clearly is complementary to the charge under section 3 in respect of Hindu undivided families, and gives effect to the principle that an item of wealth taxed in the hands of a Hindu undivided family should not once again be made to bear any tax in the hands of an individual member. The same principle read in connection with section 4(1)(b) shows that where the interest of an individual in the property of an association of individuals of which he is a member is to bear tax, that interest cannot be made to bear tax as part of the wealth of the association itself. Hence, even on the general scheme and the effect of the Act and in the context of its relevant provisions, the only group or association of persons subjected to wealth-tax as a group or association is the Hindu undivided family. It is now necessary to see whether this view taken by us in any manner conflicts with any previous decision of this court. It was pointed out that in the case of Sarjerao Appa Saheb Shitole v. Wealth-tax Officer, this court, while dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Tribunal in support of its answer that the assessee is not a Hindu undivided family may be wrong, the answer will have to be the same on the view we have taken as to the meaning of the words " Hindu undivided family " occurring in section 3. It is in this view that the learned counsel for the assessee pressed on us the argument that the question as referred does not fully bring out the real points in controversy between the parties and that, therefore, we should act under sub-section (6) of section 27 which reads : " The High Court or the Supreme Court, upon hearing any such case, shall decide the question of law raised therein, and in doing so, may, if it thinks fit, alter the form of the question of law ..... " The circumstances in which and the extent to which it is open to a High Court hearing a tax reference to call for better statements of the case or recast or change the form of question have been discussed elaborately by the Supreme Court in the cases in New Jehangir Vakil Mills Ltd. v. Commissioner of Income-tax, Kusumben D. Mahadevia v. Commissioner of Income-tax, Zoraster Co. v. Commissioner of Income-tax, Commissioner of Income-tax v. Scindia Steam Nav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be assessed in the status of an individual or a Hindu undivided family." Thus, the question was not limited to the sustainability or otherwise of the claim of the assessee that he has the status of a Hindu undivided family. In the event of an answer against him, the further question did arise whether he was an individual as such or an association of persons and further in the event of his being made liable in his status as an individual, what the extent of his liability would be. The intermediate question mentioned above was necessary or inevitable according to the argument on behalf of the assessee, because the interpretation of the word " individual " in section 3 was a matter of some doubt. The liability of the assessee to tax or the quantum of such liability in his status as an individual would be or may be, it was pointed out, different from the liability or quantum of his liability if he is to be taxed in his capacity as a Hindu undivided family. The answer on behalf of the department before us to these contentions was that, although the question of the exact status in which the assessee was liable to tax may be regarded as a question within the framework of the quest ..... 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