TMI Blog1961 (7) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... n which were of the face value of ₹ 1,00,068-8-0, and the particulars whereof were given in the schedule annexed to the deed, were set apart by way of trust in pursuance of a declaration to that effect made by the manager, Braham Dutt Bhargava, on the occasion of the Yagyopavit Sanskar of the three sons of Braham Dutt Bhargava and two sons of Mahesh Dutt Bhargava on July 6, 1951, the object of the trust being to meet the expenses of the education of the said sons of the two brothers and of such other son or sons of them who were in existence already, or who may hereafter be born, after their Yagyopavit Sanskar had been performed. The first trustees appointed under the trust were Braham Dutt Bhargava and Mahesh Dutt Bhargava. While assessing the assessee family to income-tax for the year 1952-53, the Income-tax Officer negatived the contention of the assessee that this income no longer belonged to the Hindu undivided family and included it in the total income of the assessee. In the opinion of the Income-tax Officer: this transfer of assets is defective in view of section 16(3) inasmuch as assets have been transferred for no consideration except probably for love and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e family? The Tribunal by its order dated May 18, 1956, dismissed this application. It may be pointed out at this stage that in the statement of facts accompanying the application under section 66(1), the Commissioner of Income-tax submitted that the position at which the Tribunal had arrived, namely, that the sum of ₹ 1,00,068-8-0 no longer belonged to the family, and did not belong to it during the relevant year of account, could be correct of the family, all of them being sui juris which they were not. It was pointed out that the purported settlement by trust could not take effect according to Hindu law, and the assets, therefore, covered by the trust, or the income therefrom, continued to belong to the family. This submission was opposed by the assessee, and it was contended that the points sought to be raised by the Income-tax Commissioner at that stage had not been raised earlier at all. In other words, the assessee's contention was that it had never been challenged by the department up to the time of the appellate order of the Tribunal under section 33(4) of the Act that the trust was bad because it had not been created by all the members of the Hindu undiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trust sought to be created was valid so as to lead to a conclusion that the assets comprised no longer belonged to the assessee family. The Tribunal was quite right when it went on to observe that the trusts are to be regarded as gifts but did not appreciate the contention that a gift could not be made in a joint Hindu family by the karta alone. The same principle applied for the creation of the trust. In this view of the matter, the learned judges came to the conclusion that the first question as well as the second arose out of the decision of the Tribunal dated November 29, 1954. This is how the present reference has arisen before us for answer. Even so, it has been strenuously argued on behalf of the respondent assessee, once again, that we had no jurisdiction to hear and dispose of the reference on the merits as the questions sought to be raised before us did not and do not arise out of the order of the Tribunal. We were taken through the entire history of the case with particular reference to the contentions which had prevailed with the Income-tax Officer and the most probable course which the case thereafter took, and it has been forcefully borne in upon us that at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n imperfect or incomplete form, such a question cannot be held to arise out of the order of the Tribunal within the meaning of section 66(1) of the Act. And on a rational and harmonious interpretation of section 66(2), it is only to such a question that the provisions of this sub-section could be attracted. The indisputable position in law therefore is and must be that where a question of law is sought to be raised before the High Court and a reference compelled under section 66(2) from the Appellate Tribunal, the question must conform to the test set out above, and if so it does not, then the High Court would have no authority or jurisdiction in law to requisition a reference by the Tribunal. In this connection, it cannot be over-stressed that, properly speaking, a question of law not so raised before the Tribunal cannot be said to arise out of its order even though on the facts of the case appearing from the order the question may seem to arise therefrom. This is the true character of the jurisdiction of the High Court under section 66 of the Income-tax Act. That being so, if the further contention which arises in this case, and complicates the issue, and which is pressed on u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal before the Appellate Tribunal. The ground of appeal was a single one, namely, that in the facts and circumstances of the case, the Appellate Assistant Commissioner was not justified in directing that the dividend income settled in trust by the assessee be excluded from the income of the Hindu undivided family. It is obvious that this ground was couched in a language which was delightfully vague and at large. And as we look at it, it seems to us to be a model of what a ground of appeal ought not to be according to any reputable principles of pleadings. Each ground of objection must be separately mentioned and must be clear, precise and specific, so as not to cause surprise to the opposite party. But all that apart, we find it extremely difficult to accept that, since the ground was not limited, therefore, the question of the validity of the trust because of the want of competency of the karta of a joint Hindu family to make one would be necessarily covered by it and consequently it was or must have been raised before the Tribunal. The learned members of the Tribunal have themselves categorically repudiated that any such question was raised before them and, so far as we can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court, but which another bench hearing the reference refused to answer. Their Lordships, however, declined to make any pronouncement on the procedural point raised before them and observed that whether the High Court was precluded or not from answering a reference having directed the Tribunal to state a case under section 66 (2) the Supreme Court surely could entertain the question of the competency of the reference, and in this view of the matter the question was left undecided. The point, however, is not without significance that their Lordships were not prepared to hold that the High Court had acted erroneously in rejecting the reference. If it may be permissible for us to venture any opinion on this vexed matter, we should like to say, with all deference, that though, as a broad rule, the bench called upon to decide a reference under section 66 (2) should respect the opinion of the previous bench compelling the reference as to whether the question or questions of law did arise out of the appellate order of the Tribunal, and ordinarily decline to reopen the matter, nevertheless it may become its duty to re-examine the issue in an appropriate or extreme case when called up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. He may, however, make a gift of his interest with the consent of the other coparceners. It was, therefore, contended that Braham Dutt Bhargava, the author of the trust, being a member of a Hindu coparcenary, had no authority whatsoever in law to make the impugned gift. We have carefully examined this. argument and have not felt persuaded to accept it as correct. It seems to us that, accepting the law which has been quoted above as correct, it only deals with the power of a coparcener to make a gift. Surely, the powers of a father or other manager of a coparcenary or a joint Hindu family cannot be said to rest on the same footing as that of an ordinary member of the coparcenary or a joint Hindu family. In this connection we may refer to paragraphs 225 and 226 of Mulla's book. According to the law set out in paragraph 225, it is open to a father to make gifts even of ancestral movable property without the consent of his sons for the purpose of performing indispensable acts of duty, and for purposes like gifts through affection, support of the family and relief from distress: see Bachoo Hurkisondas v. Mankorebai [1907] ITR 31 Bom. 373 (PC). Then in paragraph 226, it is laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s property. This contention was repelled by the High Court and it was held that, under the Mitakshara law, it was true that the manager of a joint Hindu family could not alienate joint family property except for family necessity or with the consent of the coparceners if they were adults, but it was held to be equally well-settled that an alienation by him was not unlawful or void ab initio but was merely voidable at the option of the other coparceners who alone were affected by his unauthorised act. It was further observed that the well-known rule of Hindu law that the karta of a joint Hindu family may make gifts of small portions of joint family property for religious purposes could not be accepted to be a legitimate foundation for the inference that all other gifts by the karta were null and void, and that what the rule properly means is that the karta is authorised to make a gift of a reasonable portion of the joint family property for religious purposes without the consent of the other coparceners and under certain circumstances even despite their objection-the foundation of the rule being that the gift would be binding because the object underlying it is pious, and that to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise. It may also be permissible to point out in this connection that, if the contention as to the validity of the gift had been raised by the department, assuming but not conceding that they could raise it, they should have themselves brought or elicited from the assessee family the requisite information surrounding the impugned transaction. This they signally failed to do. We also wish to point out that we cannot be oblivious of the fact that what the managing member or the karta of the Hindu undivided family did in this case with the consent of the only other adult member of the family was to set apart a portion of the family assets for the education of their respective sons existing or to be born, and the savings, if any, were to be accumulated as a reserve, eventually to be distributed among all the beneficiaries on the youngest of them attaining majority. Ex facie this is an arrangement which is entirely for the benefit of the minors and we are not at all satisfied on any authority or principle that such a transaction should be held to be necessarily void ab initio. It only remains for us to mention in passing that it was not the case of the department before us that this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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