TMI Blog1960 (10) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... on, the assessee moved this court to remove those orders on certiorari. The principle contention urged on behalf of the petitioner is that section 3 of the Act, which enables the Revenue to tax a Hindu undivided family is beyond the legislative competence of the Union Parliament and, consequently, the proceedings started by the proper Wealth-tax Officer under section 14 read with section 3 are invalid. The point for consideration is whether it was competent for the Parliament to make a taxing law as respects Hindu undivided families. It is convenient at this stage to advert to the relevant sections of the Act, which was passed by the Union Parliament in 1957 and which came into force on April 1, 1957. Section 2(c) defines an assessee as a person by whom wealth-tax or any other sum of money is payable under this Act, and includes every person in respect of whom any proceedings under this Act has been taken for the assessment of the value of his assets. Section 3, which is the charging section and which mainly falls to be interpreted here, recites: Subject to the other provisions contained in this act, there shall be charged for every financial year commencing on and from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies. The argument pressed upon us on the language of the entry is that it does not empower the Parliament to make a taxing law in respect of a Hindu undivided family and that the word individual occurring in that entry cannot take in a joint Hindu family. It is urged by Sri Bhujanga Rao, learned counsel for the petitioner, that a Hindu undivided family being a corporation and not a mere association of individuals, cannot fall within the connotation of individuals . To substantiate this theory of his, the learned counsel calls our attention to some observations in the judgment of the Bombay High Court in Apaji Narhar Kulkarni v. Ramchandra Ravji Kulkarni [1891] I.L.R. 16 Bom. 29 . The statement which has given rise to this argument is found at page 39 of the report and is in these terms: 'the family property' to borrow the language of Mr. Mayne, is owned by the whole coparcenary as a sort of corporation. To the same effect are the following remarks at page 78: No doubt the joint family is a corporate body, a sort o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be brought about in a specific manner. In our judgment a joint Hindu family cannot be regarded as a legal person or a juristic entity with independent existence. This proposition finds support in Sokkanadha Vannimundar v. Sokkanadha Vannimundar [1904] I.L.R. 28 Mad. 344. It was ruled there that a joint Hindu family cannot be taken as a legal person in the strict sense of the term so as to constitute a partnership. The learned judges stated that the legal relation subsisting between the members of a family carrying on business may have some sort of resemblance to that of partners but it is not identical with it. They added that a joint Hindu family, though at time spoken of by the judges as a sort of corporation, cannot strictly be described as corporation or a equivalent to a legal person. The next question for consideration is whether the expression individual occurring in entry 86 is comprehensive enough to include a joint Hindu family. When once we reach the conclusion that a joint Hindu family is nothing more than a group of individuals, no doubt with certain special features, the problem does not present much difficulty. That the expression individuals cannot mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an association of people. It is a natural as distinct from an artificial association. A Full Bench of the Madras High Court in Commissioner of Income- tax v. Salem District Urban Bank Ltd., Salem [1940] 8 I.T.R. 269 ruled that a co-operative central bank composing certain shareholders some of whom were individual persons and the rest co-operative societies, was an association of individuals within the meaning of section 3 of the Indian Income-tax Act. Likewise a Bench of the Madras High Court consisting of Lionel Leach C.J. and Lakshman Rao J. decided that a bar council is an individual within the words of section 3 of the Indian Income-tax Act (vide Commissioner of Income-tax v. Bar Council, Madras [1943] 11 I.T.R. 1 ). The principle enunciated by the Bombay High Court in Commissioner of Income- tax v. Currimbhoy Ebrahim Sons [1933] 1 I.T.R. 341 is that a corporation is an individual within the purview of section 3 of the Indian Income-tax Act. This was confirmed by the Judicial Committee of the Privy Council in Trustees of Sir Currimbhoy Ibrahim Baronetcy Trust v. Commissioner of Income-tax [1934] 2 I.T.R. 148 . We may now refer to a recent judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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