TMI Blog1947 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... of the High Court was whether the sum of ₹ 1,000 per month received by the petitioner (meaning the respondent) in the account year 1934-35 was received by her as a member of a Hindu undivided family within the meaning of Section 14 (1) of the Act. That section reads as follows:― The tax shall not be payable by an assessee in respect of any sum which he receives as a member of a Hindu undivided family. The Income-tax Officer answered the question in the negative, and on appeal, his decision was confirmed by the Assistant Commissioner of Income-tax. The appellant also was of opinion that the question should be answered in the negative. The High Court, however, answered the question in the affirmative. Kalyan Singh, the husband of the assessee, along with his brothers. nephews and cousins formed a Hindu undivided family governed by the Mitakshara law. The genealogical tree of the family is as follows:― Lala Shiam Sunder Das Badio Das Ram Chandra (Adopted) Kalyan Singh-Bhagwati Sagar Prasad Kalyan Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, a deceased brother of Kalyan Singh and Govind Das. (4) Gokul Das. (5) Lachhman Das. At the disruption, Hanuman Prasad and Ram Gopal on the one side (group 1), and Govind Das on the other side (group 2), each agreed to contribute ₹ 500 to the respondent towards the monthly allowance of ₹ 1,000 that was being paid to her. Thus, at the material period the respondent was in receipt of a maintenance allowance of ₹ 1,000 a month, partly from the first group and partly from the second group. It should be stated here that to none of the disruption proceedings was the respondent a party. In the above circumstances, the Income-tax Officer assessed the respondent on her allowance of ₹ 12,000 received by her during the account year 1934-35, overruling the objections raised on her behalf that she was receiving the amount as a member of a Hindu undivided family within the meaning of Section 14(1) of the Act, holding that after the disruption of the family in 1923 owing to the fact of the payment of the allowance to Musammat Bhagwati (respondent) by these persons the Musammat cannot be said to be a member of the family of either of them. It is clear that sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, and on this, they came to the conclusion that after the disruption of the family on 9th April, 1923, the assessee continued to be a member of a Hindu undivided family with each of the entities into which the family disrupted irrespective of whether any such entity consisted of one male member or of several male members. Upon this view of the mater they held that the respondent was entitled to claim exemption under Section 14(1) of the Act. The learned Judges answered the reference, as expressly stated by them, on the assumption that up to 9th April, 1923, the respondent was receiving her allowance as a widow of a Hindu undivided family. To show that the decision of the High Court cannot be supported, Mr. Tucker, the learned counsel for the appellant, submitted two arguments for their Lordships' consideration, viz.:―(1) Assuming that the respondent was receiving the maintenance allowance as a member of a Hindu undivided family till the disruption of the family into 5 groups in 1923, she is not entitled to claim the benefit of Section 14(1) of the Indian Income- tax Act, as according to the learned counsel's reading of the section the three following condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a different question which their Lordships will consider later. The argument on the part of the respondent is that the allowance is being received by her in her capacity or status as a widow of a Hindu undivided family and the capacity in which she was receiving it, is not affected by the severance in joint status that took place subsequently in 1923, in the family, to which she was not a party; and it is therefore exempt from taxation under Section 14(1) of the Act, as the only requisite to be proved under the section is that she was receiving the allowance in question in her capacity as a member of the Hindu undivided family. As already stated this was the first argument put before the High Court which the learned Judges did not consider. Under the Act, a Hindu undivided family is treated as a unit of taxation. Section 14(1) of the Act exempts an assessee from payment of the tax in respect of any sum which he receives as a member of a Hindu undivided family. It is clear that the object of the section is to avoid double taxation. The question in the present case is what has the respondent to prove in order to claim the benefit of the section. In support of his contention, Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of some right whether based on custom or law, or is in the nature of a gift or indulgence. The learned Chief Justice followed the previous decision of his own Court, Commissioner of Income-tax, Bihar and Orissa v. Visheswar (supra) [1935] I.L.R. 14 Pat. 785; 3 I.T.R. 216 , and various other decisions of other Courts including one of the Madras High Court, viz., Commissioner of Income-tax v. Zamindar of Chemudu I.L.R. 57 Mad. 1023; 2 I.T.R. 288 , where it was held by Ramesam, J., with reference to the facts of the case that, the question in the case is not whether the income belongs to the zemindar or whether it belongs to the joint family of which the assessee is a member, but whether the assessee received his payment as a member of a Hindu undivided family. Agarwala, J., in the second decision of the Patna High Court referred to above, thought that the principle was stated too widely in that case. A few other decisions were also referred to by the learned counsel. Their Lordships do not propose to discuss these decisions in detail, as it appears to them that the test to be applied when exemption is claimed under the section is clear and is what they have already stated, viz., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovable and immovable became liable. It is clear that by the creation of a charge, this provision in the deed made her right of maintenance safe and secure. The deed ended with the statement that the respondent will have no rights or interests in the family property excepting as aforesaid, which means as correctly described by the Income-tax Commissioner, whereby the petitioner (respondent) acknowledged her status to be that of a widow in a Hindu undivided family and declared that as such, she was not entitled to the estate of Kalyan Singh, her husband. Their Lordships fail to see how by the above provisions the respondent has surrendered her rights to maintenance from the family properties. It was argued by Mr. Tucker that, even though the respondent technically remained a member of the family, she ceased to receive the income by her title as a member of the family, but began to receive it by virtue of the deed which fixed a liability on the people concerned, irrespective of the land which belonged to them. Their Lordships cannot accept this view. As they read the deed, the respondent by virtue of it effectively secured her maintenance right which was an inchoate one, b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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