TMI Blog1975 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ner filed the return on March 13, 1972. The petitioner in his return mentioned that the deceased owned land in three villages, namely, Dharampura Taraf Saidan Ludhiana, Resubra and Agwar Gujran. This was claimed to be ancestral property belonging to the joint Hindu family constituted by the deceased, Gurbachan Singh, and his sons, Pritam Singh and another. It was stated in the return that the deceased, Gurbachan Singh, and his sons constituted joint Hindu family and the land and the movable property mentioned below belonged to the said Hindu undivided family : Rs. (1) Deposits in the Post Office Account No. 606657 ... 4,906 (2) Cash in hand ... 1,000 (3) Standing crops estimated (the deceased died when winter crops were maturing) ... 5,000 (4) Milch cattle estimated ... 1,000 (5) Household goods/agricultural implements estimated at ... 2,500 (exempt) The Assistant Controller of Estate Duty, after hearing the petitioner, held that the total value of the movable and immovable property owned by the joint Hindu family was Rs. 4,95,539, wherein the deceased had one-third share amounting to Rs. 1,65,180. After deducting the funeral and other expenses, he ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Mitakshara Hindu law and this writ petition is misconceived. The contents of the assessment order dated May 1, 1973, copy whereof is annexure " P-1 " to the writ petition of the Assistant Controller of Estate Duty have been given in the earlier part of the judgment and need not be repeated here. Annexure " P-2 " is the copy of the impugned notice dated October 8, 1974, issued by the respondent to the petitioner, and it reads as follows : " In the matter of estate of late Shri Gurbachan Singh. Whereas I have reason to believe that property chargeable to estate duty has : (a) escaped assessment. (b) been under-assessed. (c) been assessed at too low a rate. You are requested to deliver to me not later than 30 days an account of all property in respect of which duty is payable." The first submission made by the counsel for the petitioner is that the impugned notice is illegal and could not be issued under section 59 of the Estate Duty Act, and that the judgment reported as Controller of Estate Duty v. Harbans Singh did not constitute any information for the purpose of taking proceedings under section 59 of the Act, that no reasons were given in the said j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary governed by the Mitakshara school of law dies, then the provisions of sub-section (1) shall apply with respect to the interest of the deceased in the coparcenary property only-- (a) if the deceased had completed his eighteenth year at the time of his death, or (b) where he had not completed his eighteenth year at the time of his death, if his father or other male ascendant in the male line was not a coparcener of the same family at the time of his death. Explanation.--Where the deceased was also a member of a sub-coparcenary (within the coparcenary) possessing separate property of its own, the provisions of this sub-section shall have effect separately in respect of the coparcenary and the sub-coparcenary........" Section 39 : " (1) The value of the benefit accruing or arising from the cesser of a coparcenary interest in any joint family property governed by the Mitakshara school of Hindu law which ceases on the death of a member thereof shall be the principal value of the share in the joint family property which would have been allotted to the deceased had there been a partition immediately before his death... (3) For the purpose of estimating the principal v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice, annexure " P-2 " of to the writ petition, are vague and indefinite. It is simply stated therein that the property chargeable to estate duty escaped assessment, that it has been under-assessed and had been assessed at too low a rate. There is no mention in this notice as to what was the information, much less its details, in possession of the department regarding the property of Gurbachan Singh, deceased, and how it was under-assessed or it escaped assessment or the assessment was made at too low a rate. The department did not rise any objection at the time of the passing of the order, annexure " P-1 ", that the deceased was governed by agricultural custom and was the owner of the property and, therefore, his property was not entitled to be assessed under section 7 read with section 39 of the Act. This was a question of fact which was to be alleged and proved by the department, but they did not do so. In his return the respondent has pleaded that the notice has been issued on the basis of the judgment in Harbans Singh's case, which constituted " information " for the purpose of taking proceedings under section 59(b) of the Act. The facts of that case as found by the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was contended before the Tribunal that owing to the passing of the Hindu Succession Act, 1956, custom has been abrogated, that the Sikhs were Hindus, and, therefore, the assessees were governed by Mitakshara school of Hindu law, which was prevalent in Punjab, that the entire property vested in the Hindu undivided family constituted by the deceased, Udham Singh, and his three sons, who were the assessees, and the decisions of the two officers below were illegal. The Tribunal held that by the passing of the Hindu Succession Act, the custom in matters of succession has been abrogated, that the assessees being Hindus, i.e., Sikh Jats, they were governed by their personal law, which was Hindu law, in matters of succession, and that the property was joint Hindu family property and the appeal was allowed and it was ordered that the assessment should be made under section 7 read with section 39 of the Estate Duty Act. On a petition being made by the department, the Income-tax Appellate Tribunal referred the following question of law to this court for opinion under section 64(1) of the Act : " Whether, on the facts and in the circumstances of the case, the assessment was to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that it was for the other party to allege and prove the alleged custom after the passing of the Hindu Succession. Act, but no reference, much less discussion thereon, was made in the judgment. After reciting the facts of the case and setting out the relevant portions of sections 7 and 39 of the Estate Duty Act, Pandit J. observed as follows : " The point for determination in this case is whether Udham Singh and his sons formed a joint Hindu family governed by the Mitakshara school of Hindu law and whether, on the former's death, his interest in the property was that of a coparcener and the same had to be valued for the purpose of levying the estate duty. After hearing the counsel for the parties, we are of the view that merely on the enforcement of the Hindu Succession Act, it could not be held that custom had been abrogated and all the Jats started being governed by the Mitakshara school of Hindu law and they formed joint Hindu families with their sons and commenced having coparcenary interest in the joint family property, with the result that the assessment in their cases had to be made under section 7 read with section 39 of the Act. All these questions, e.g., whether : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law raised there by and in doing so, may, if it thinks fit, alter the form of the question of law and shall deliver judgment thereon containing the ground on which such decision is founded and shall send a copy of the judgment under the seal of the court and the signature of the Registrar to the Appellate Tribunal and the Appellate Tribunal shall pass such orders as are necessary to dispose of the case conformably to such judgment ..........." Sub-section (1) of section 64 of the Act simply empowers the Appellate Tribunal to make a reference to the High Court for its opinion on a question of law only. Sub-section (5) of this section says that if the High Court is not satisfied that the case as stated is sufficient to determine the question of law, then it may require the Tribunal to make such modification therein as it may direct. Sub-section (6) empowers the High Court to decide the question of law referred to it and in doing so it may alter the form of the question of law and shall deliver judgment thereon containing the ground on which such decision is founded. Under section 64 of the Act the High Court has no power to remand the case to the Appellate Tribunal for re-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d are governed by Hindu law, that the property in dispute was ancestral and was joint Hindu family property constituted by him, his brother and their father Gurbachan Singh, wherein the deceased had one third share and the assessment order dated May 1, 1973, annexure P-1 to the writ petition, is legal and valid and the impugned notice is illegal. Mr. D. N. Awasthy, the learned counsel for the respondents, conceded that if the petitioner and his family are held to be governed by Hindu law and the property in dispute is held to be the joint Hindu family property constituted by the deceased and his sons, then the order, annexure " P-1 " would be valid. Section 5 of the Punjab Laws Act, 1872, reads as follows : " In questions regarding succession, special property of females, betrothal and marriage, divorce, dower, adoption, guardianship, minority bastardy, family relations, wills, legacies, gifts, partition, or any religious usage or institution, the rule of decision shall be-- (a) any custom applicable to the parties concerned, which is not contrary to justice, equity or good conscience, and has not been by this or any other enactment altered or abolished, and has not been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjab Laws Act, 1872, does not raise any presumption in favour of the existence of custom to the exclusion of personal law and if any person alleges that he or any other person is governed by custom, then he must plead and prove the alleged custom by cogent and reliable evidence. It is undisputed that for purposes of the Hindu Succession Act the Sikhs are Hindus and their personal law is Hindu law. Consequently the personal law, i.e., Hindu law, will apply to the Sikh Jats in matters of succession unless a custom at variance with the Hindu law is alleged and proved. If the parties are governed by their personal law, from the mere fact that there has been a departure from personal law in one respect, it does not necessarily follow that the personal law has been abrogated. In Punjab, among the parties admittedly governed by Hindu law, the Hindu law had been modified by custom to this extent that the adoption of a daughter's son is valid, but apart from this modification of the personal law, the legal consequences that ensue from such an adoption must be looked for in the Hindu law : vide Baldeo Sahai v. Ram Chander. The fact that in the matter of succession, the parties follow custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cession Act, 1956, may now be noticed. There are two systems of inheritance among the Hindus in India, namely, the Mitakshara system and the Dayabhaga system. The Dayabhaga system prevails in Bengal, while the Mitakshara system recognizes two modes of devolution of property, namely, survivorship and succession. The rule of survivorship applies to joint Hindu family property, while the rule of succession applies to separate property of the members of the joint Hindu family. However, the Dayabhaga school recognizes only one rule of devolution of property, namely, succession, and it does not recognize the rule of survivorship even in the case of joint Hindu family property. Under the Mitakshara, law, every member of the joint Hindu family has only an undivided interest in the joint property, while a member of the Dayabhaga joint family holds a share in quasi-severalty, and his share passes on his death to his heirs as if he was absolutely seized thereof, and not the surviving coparceners as under the Mitakshara law. According to para. No. 96 of Mulla's Hindu Law, 1966 edition, a widow, who is unchaste at the time of her husband's death, is not entitled to his property. Change of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hindu from his father, father's father, or father's father's father. The essential features of ancestral property according to the Mitakshara school of Hindu law are that the sons, grandsons and great-grandsons of the person who inherits it acquire an interest in it by birth, and their rights attach to it at the moment of their birth. Property belonging to a joint Hindu family is ordinarily managed by the father or other senior member for the time being of the family. The manager of a joint family is called karta. The powers of the manager of a joint Hindu family to alienate joint family property are analogous to that of a manager of the estate of an infant. The manager of the joint Hindu family has power to alienate for value joint family property, so as to bind the interests of both adult and minor coparceners in the property, provided that the alienation is made for legal necessity or for the benefit of the estate. An alienation by a manager of the family made without legal necessity is not void, but voidable at the option of the other coparceners vide paras. Nos. 236 and 242 of Mulla's Hindu Law, 1966 edition. The Hindu Succession Act, 1956, which came into force with ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contained in this Act. (2) For the removal of doubts, it is hereby declared that nothing contained in this Act shall be deemed to affect the provisions of any law for the time being in force providing for the prevention of fragmentation of agricultural holdings or for the fixation of ceilings or for the devolution of tenancy rights in respect of such holdings." Sections 8 to 13 of the Hindu Succession Act lay down rules of succession to the property of a male Hindu dying intestate after the coming into force of the Act, including the rules relating to ascertainment of the shares and portions of the various heirs. The two systems of inheritance to the separate or self-acquired property of a male Hindu dying intestate hitherto prevailed under the Mitakshara and Dayabhaga schools are abolished and a uniform system comes into operation as propounded in section 8. The three classes of the heirs recognised by the Mitakshara school and three classes recognised by the Dayabhaga school cease to exist in the case of devolution of property taking place after the coming into force of the Act. Under this Act, the heirs are divided into four classes or categories and these are : (1) heir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uccession hitherto applicable to Hindus, whether by virtue of any text or rule of Hindu law or any custom or usage having the force of law in respect of all matters dealt with in the Act. This Act also supersedes any other law contained in any Central or State legislation in force immediately before it came into force in so far as such legislation is inconsistent with the provisions contained in the Act. In Mst. Taro v. Darshan Singh, it was held by a Division Bench of this court as under : "........ by virtue of sections 2 and 4 of the Hindu Succession Act, Punjab agricultural custom, so far as it was applicable to Hindus, is no longer in force so far as the matters of succession, etc., are concerned, which are now governed by the provisions of the Hindu Succession Act." To the same effect was laid down in Smt. Banso v. Charan Singh and Gopal Narain v. Durga Prasad Goenka . In Hans Raj v. Dhanwant Singh a Division Bench of this court held : " Section 4 of the Hindu Succession Act does away with the rule of custom so far as succession is concerned and therefore after the Hindu Succession Act came into force, no Hindu can be said to be governed by the rules of customa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties, that is to say, Jats in this State ? The Full Bench by majority held as follows : " The term 'coparcenary property' occurring in section 19(2) of the Hindu Adoptions and Maintenance Act, 1956, means the property which consists of ancestral property, or joint acquisitions, or property thrown into the common stock and accretions to such property." In para. No. 7 of the majority judgment written by P. C. Pandit J. (as he then was), it was observed that by virtue of the provisions of section 4 of this Act, any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the commencement of this Act shall cease to have effect with respect to any matter for which provision is made in this Act. It is, therefore, clear that when a case for maintenance is now brought in courts and provision for such maintenance has been made in this Act, then we are not to look to the fact whether the parties are governed by Hindu law or custom, because the provisions of this Act override the old Hindu law and custom, as the case may be. The legal position, therefore, that emerges is that prior to the passing of the Hindu Succession Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il Singh v. Naunihal Singh deal with powers of alienation of property by a sonless proprietor and Sundar v. Salig Ram deals with the powers of alienation of a widow governed by customary law. The decision in Joginder Singh v. Kehar Singh is also irrelevant as it deals with powers of alienation of a person governed by customary law and section 14 of the Hindu Successsion Act. No decision relating to the point in issue was cited by the counsel for the respondent. The contention of the counsel for the respondent that because once upon a time agricultural tribes in the State of Punjab were governed by custom, therefore, they could not be governed by Hindu law is absolutely wrong and is rejected. Even before the passing of the Hindu Succession Act the law was that the members of the agricultural tribes, who gave up agriculture and started living in cities and joined service or started business, were held to be governed by their personal law instead of custom. In this respect reference may be made to Raghbir Singh Sandhawalia v. Commissioner of Income-tax, Dr. Sardar Bahadur Sir Sundar Singh Majithia v. Commissioner of Income-tax and Sardar Babadur Sardar Indra Singh v. Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in Commissioner of Income-tax v. Bhanji Lavji. Both these decisions are not relevant. Section 341(1)(a)of the Indian Income-tax Act, 1922, dealt with cases of omission to disclose fully and truly all material facts necessary. This clause (a) of section 34(1) of that Act corresponds to clause (a) of section 59 of the Estate Duty Act, 1953. The present case falls under clause (b) of section 59, which has been reproduced above in the earlier part of the judgment. The question for decision in this case is whether the judgment in Harbans Singh's case is " information " within the meaning of clause (b) of section 59 of the Act. Mr. Gopi Chand then relied on Income-tax Officer v. Nawab Mir Barkat Ali Khan, wherein it was held by the Supreme Court as under : " Non-production of the documents at the time of the original assessments cannot be regarded as non-disclosure of any material facts necessary for the assessment of the respondent for the relevant assessment years, where such documents conform to the documents filed by the assessee in material particulars. Having second thoughts on the same material does not warrant the initiation of proceedings under section 147." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) that the word 'information' in section 34(1)(b) included information as to the true and correct state of the law, and so would cover information as to relevant judicial decisions ; (ii) that 'escape' in section 34(1)(b) was not confined to cases where no return had been submitted by the assessee or where income had not been assessed owing to inadvertence or oversight or other lacuna attributable to the assessing authorities ; even in a case where a return had been submitted, if the Income-tax Officer had erroneously failed to tax a part of the assessable income, it was a case where that part of the income had escaped assessment ; (iii) that, therefore, the decision of the Privy Council was 'information' within the meaning of section 34(1)(b) and that their decision justified the belief of the Income-tax Officer that part of the appellant's income had escaped assessment for the relevant year. Two conditions must be satisfied before the Income-tax Officer can act under section 34(1)(b) : he must have information which comes into his possession subsequent to the making of the original assessment order, and that information must lead to his belief that income chargeable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to these decisions, the word " information " in these sections, 34(1)(b) and 147(b), includes " information " as to the true and correct state of the law and so would cover information as to relevant judicial decisions relating to a matter bearing on the assessment of income-tax. In the instant case, it has been held above that the decision in Harbans Singh's case is not correct. As a matter of fact, no decision was given and, according to the statement made at the Bar by the counsel for the parties, the case was remanded to the Tribunal for re-decision of the appeal of the assessee. It has also been held that the directions given in that decision to the Tribunal are also not correct. Consequently, this decision, which did not lay down any correct law, cannot be said to be information within the meaning of clause (b) of section 59 of the Estate Duty Act. Therefore, there was no justification for the respondent to issue the impugned notice which must be quashed. In the instant case, the petitioner in his return dated March 13, 1972, in response to the notice issued to him under section 55 of the Estate Duty Act, had alleged that the deceased, Gurbachan Singh, constituted joint Hin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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