TMI Blog1990 (8) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... and his wife as member came into being on that day. For the assessment years 1981-82, 1982-83 and 1983-84, he filed two sets of returns initially. The first set claimed the status as an individual in respect of his salary income and interest on the gift amount which he had deposited in the firm and the other claimed the status of a Hindu undivided family in respect of the interest income from the share which he obtained in partial partition. During the course of assessment, he filed revised returns on October 25, 1982, claiming the status of individual in respect of all the three items of income as mentioned above. He appeared before the Income-tax Officer on August 16, 1983 and filed a letter consenting to be assessed in the status of an individual, in respect of the income earned on the three items. The Income-tax Officer assessed the petitioner in the status of an individual in respect of the above three items for three years in his order dated November 14, 1983. The petitioner had second thoughts and claimed the status of a Hindu undivided family consisting of himself and his wife in so far as interest income from the firm was concerned. He, therefore, filed an application und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the property as he wished. But when he married, a Hindu undivided family came into being and the joint family character of the property revived. He relied on a decision of this court in Prem Chand v. CIT [1984] 148 ITR 440 and decisions of the Supreme Court in Gowli Buddanna v. CIT [1966] 60 ITR 293, N. V. Narendranath v. CWT [1969] 74 ITR 190, C. Krishna Prasad v. CIT [1974] 97 ITR 493 and Surjit Lal Chhabda v. CIT [1975] 101 ITR 776. According to counsel, these decisions clearly lay down that the property of a Hindu undivided family in the hands of a sole coparcener will not shed its character as joint family property and will revive the moment Hindu undivided family comes into being by marriage or a coparcener comes into existence by birth or adoption. He submits that the same principle applies to the share which a coparcener obtains on partition and that that is what has happened in this case. Counsel also sought to distinguish the decision in Seth Tulsidas Bolumal v. CIT [1988] 170 ITR 1 of this court. Sri M. Suryanarayana Murthy, counsel for the respondent, submitted that what the petitioner got in partition was his separate and absolute property and that his marriag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to distinguish the decision in Prem Chand v. CIT [1984] 148 ITR 440 (AP) for the reason that it rested entirely on the continuance of the Hindu undivided family by reason of the subsistence of the marriage, notwithstanding the fact that the wife had been granted a share in partition according to the Benaras School of Mitakshara Hindu law. He submits that the decision cannot be an authority for the proposition that the separate and absolute property which a coparcener obtained in a partition at the time when he was unmarried would automatically transform itself into joint family property on his marriage : That is the question which we have to tackle in the three writ petitions. The precedents which counsel on either side have referred to us are conflicting. The task of reconciliation of those conflicting precedents is not easy. We have to undertake the difficult exercise in view of the rival contentions. The first of the decisions which we have to notice is that of the Privy Council in Kalyanji Vithaldas v. CIT [1937] 5 ITR 90 and CIT v. A. P. Swamy Gomedalli [1937] 5 ITR 416 (PC). In the former case, the Privy Council held (at page 94) : "A man's wife and daughter are entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty might possess, and the income received therefrom was taxable as income of the Hindu undivided family." In T. S. Srinivasan v. CIT [1966] 60 ITR 36 (SC), the question that arose for consideration was whether the birth of a son towards the end of the accounting year would convert the individual income of a Hindu male from the share which he received in partition, from his larger Hindu undivided family ? The court held that (headnote): "till the child was born, the income which accrued or arose to, or was received by, the appellant was his income, as no Hindu undivided family was then in existence, and this position could not be displaced by the birth of the son, which brought into existence a Hindu undivided family." The court did not consider the decision in Kalyanji's case [1937] 5 ITR 90 (PC). It is interesting to note that in Gowli Buddanna's case [1966] 60 ITR 293 (SC), which was decided on January 10, 1966, there was no reference to T. S. Srinivasan's case [1966] 60 ITR 36 (SC), which was decided on November 29,1965. The same point arose for consideration before the Supreme Court in N. V. Narendranath v. C WT [1969] 74 ITR 190. The assessee there was member of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being. In C. Krishna Prasad v. CIT [1974] 97 ITR 493, the Supreme Court had to deal with the question of a divided coparcener who had obtained share from the Hindu undivided family on partition, on October 30, 1958. He continued to be a bachelor till March 31, 1964. During the entire period, he was assessed as an individual. For the assessment year 1964-65, he claimed that he should be assessed in the status of a Hindu undivided family. The authorities rejected that claim. On a reference, the High Court agreed with the departmental authorities and held against the assessee. The Supreme Court held (headnote): " 'Family' always signifies a group. Plurality of persons is an essential attribute of a family. A single person, male or female, does not constitute family. A family consisting of a single individual is a contradiction in terms. Section 2(31) of the Income-tax Act, 1961, treats a Hindu undivided family as an entity distinct and different from an individual. Assessment in the status of a Hindu undivided family can be made only when there are two or more members of the Hindu undivided family." The court noticed that in Gowli Buddanna's case [1966] 60 ITR 293 (SC), it had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was thrown into the family hotchpot and that the income was chargeable to income-tax as his individual income and not that of his family. The court virtually reinstated the decision of the Privy Council in Kalyanji's case [1937] 5 ITR 90, as applying to separate and self-acquired properties of Hindu males having only female members in their families in which case, such properties would be their own and income therefrom only their individual income. The Supreme Court concluded that (at page 795) : " The property which the appellant has put into the common stock may change its legal incidents on the birth of a son ; but until that event happens the property, in the eye of Hindu law, is really his. He can deal with it as a full owner, unrestrained by consideration of legal necessity or benefit of the estate. He may sell it, mortgage it or make a gift of it. Even son born or adopted after the alienation shall have to take the family hotchpot as he finds it. A son born, begotten or adopted after the alienation has no right to challenge the alienation." The question which arose for consideration before the Supreme Court in CWT v. Chander Sen [1986] 161 ITR 370, was as to whether a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of the separate property of a Hindu male which he obtained on partition or the income therefrom. He submits that the share of a Hindu male in ancestral property is his personal, individual, separate and absolute property, and does not get converted into property of the undivided family the moment he marries. A question almost the, same as in the present case arose for the consideration of the Madhya Pradesh High Court in CIT v. Vishnukumar Bhaiya [1983] 142 ITR 357. The facts were that the assessee had received a share in the Hindu undivided family on partition. He was then single and married some time later. He claimed the status of an individual for periods prior to his marriage and of a Hindu undivided family for the period subsequent to his marriage. The court following the decision in Gowli Buddanna [1966] 60 ITR 293 (SC), Surjit Lal Chhabda [1975] 101 ITR 776 (SC) and C. Krishna Prasad [1974] 97 ITR 493 (SC), held that (headnote) : "When the property was received by the assessee on partition, he was a single member and did not constitute an Hindu undivided family. His status was that of an individual. The fact of his marriage did not alter the position and, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee who was the karta of joint Hindu family consisting of himself, his wife and major son. He converted some of his individual properties as joint family property by a declaration on June 25, 1970. All these properties were assessed as income of the Hindu undivided family. The joint family properties were partitioned on March 10, 1976, between the assessee and his son, each taking a half share. For the assessment year subsequent to the above partition, the assessee claimed that the amounts which he paid to the smaller joint family was not his individual income, but that of the smaller Hindu undivided family. This court repelled that contention and held that the portion of the converted asset which fell to the share of the assessee after partition was his individual property, notwithstanding the fact that the karta and his wife formed a Hindu undivided family. Reliance was placed on the observations of the Supreme Court in Surjit Lal Chhabda's case [1975] 101 ITR 776. The reasoning of the court was that, in the absence of a son, the property belonged to the Hindu male (karta) absolutely and, therefore, the joint family had no right in the property or the income arising therefrom. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arate maintenance, does not form a charge upon her husband's property, ancestral or self-acquired, yet when it, becomes necessary to enforce or preserve such a right effectively, it could be made a specific charge on a reasonable portion of the property. If the right of maintenance is imperilled or jeopardised by the conduct and dealings of the husband or father with reference to his properties, the court can create a charge on a suitable portion thereof, securing the payment of maintenance to the wife or children." That decision was approved in Chandramma v. Maniyam Venkatareddy, AIR 1958 AP 396, wherein this court held that the wife was entitled to be maintained out of the profits of her husband's property and to enforce her rights against the properties even in the hands of the alienee with notice of her claim. The court observed (at page 401) : "(39) To summarise: The Hindu law texts and the important commentaries impose a legal personal obligation on a husband to maintain his wife irrespective of his possession of any property, whether joint or self-acquired. They recognise the subordinate interest of the wife in her husband's property arising out of her married status. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er as joint property of the smaller unit consisting of himself and his wife. In that limited sense, the income therefrom may be the income of the Hindu undivided family consisting of himself and his wife. We draw sustenance for this view from Hindu Law and Usage (12th edition) by Mayne, Para 725 (at page 1009) : "The Hindu law texts impose a legal personal obligation on a husband to maintain his wife irrespective of possession of any property whether joint or self-acquired. She is entitled to enforce this personal obligation by creating a charge on his property either acquired or ancestral. She is, therefore, entitled to be maintained out of the profits of her husband's property within the meaning of section 39 of the Transfer of Property Act and can enforce her rights against the properties in the hands of the alienee with notice of her claim." (Chandramma's case, AIR 1958 AP 396). Hindu Law, Principles and Precedents, by Raghavachariar (8th edition) Para 208 : "Her right is undoubtedly a pre-existing right in property, a jus ad rem not jus in rem and it can be enforced by her who can get a charge created for her maintenance on the property either by agreement or decree fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he obtained on partition. The result is that the orders of the Income-tax Officer as confirmed by the Commissioner of Income-tax are illegal and unsustainable. We note that the Revenue did not refuse relief to the petitioner on the ground of acquiescence or any such similar ground. They based themselves entirely on the view that a Hindu wife has no right or interest in the separate property of her husband and, therefore, in respect of such property and income therefrom the assessee can be assigned only the status of an individual. Since we hold that the Assessing Officer and the Commissioner erred in law in taking that view, we do not feel persuaded to refuse relief on any technical ground. We are of the opinion that the question which the Division Bench has referred to the Full Bench in R. C. No. 96 of 1986, namely, whether a Hindu wife is entitled to renounce her membership of a Hindu undivided family during the subsistence of the marriage has no relation to the questions which we have to decide in this case, except that the conclusion which we have reached is in accordance with Prem Chand [1984] 148 ITR 440 (AP), nor are we persuaded to hold that section 8 of the Hindu Succe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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