TMI Blog1971 (8) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... to the expenditure incurred by the assessee's wife became available to him only on 5th May, 1962. Thus, the notices which were issued on that date relating to the assessment years 1959-60, 1960-61 and 1961-62 were within the period of four years which was the limit prescribed with regard to action under clause (b), the limit being more in respect of clause (a). In our judgment, this concludes the matter because it was nowhere controverted in the High Court that the requisite information came into the possession of the Expenditure-tax Officer only on 5th May, 1962. Appeal dismissed. - Civil Appeals Nos. 1794 to 1796 of 1967 - - - Dated:- 30-8-1971 - Judge(s) : A. N. GROVER., K. S. HEGDE JUDGMENT The judgment of the court was delivered by GROVER J.--- The points involved in all these appeals by certificate are common and relate primarily to the true scope and interpretation of certain provisions of the Expenditure-tax Act, 1957, as amended by the Finance Act, 1959, hereinafter called " the Act ". The facts in Civil Appeals Nos. 1794 to 1796 of 1967 may be stated. Prince Azam Jha Bahadur, the eldest son of the Nizam of Hyderabad, filed returns for the purpose of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parcener other than (a) every coparcener other than the the karta ; and karta ; and (b) any other member of the (b) any other member of the family family who under any law or order or who under any law or order or decree of a decree of a court is entitled to court is entitled to maintenance from the maintance from the joint family property. joint family property ; 2(h).................. 2(h) ........................ 3. Charge of expenditure-tax.--- 3. Charge of expenditure-tax.--- (i) Subject to the other provisions (i) Subject to the other provisions contained contained in this Act, there shall be in this Act, there shall be charged for charged for every financial year every financial year commencing on and commencing on and from the first day of from the first day of April, 1958, a tax April, 1958, a tax (hereinafter referred [hereinafter referred to as expenditure tax) to as expenditure tax) at the rate or rates at the rate or rates specified in the schedule the specified in the schedule in respect in respect of the expenditure incurred by any of the expenditure incurred by any individual or Hindu undivided family in the individual or Hindu undivided family in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 4(ii) for computing the expenditure of the assessee for the purpose of assessing his liability to tax under the Act. In other words, even after the amendment made in 1959, " dependant " meant where the assessee was an individual, his or her spouse or child wholly or mainly dependent on the assessee for support and maintenance. Now, after the amendment, the language underwent a complete change and sufficiently clear language was employed according to which " dependant " meant where the assessee was an individual his or her spouse or minor child and included any person wholly or mainly dependent on the assessee for support and maintenance. But the Madras and the Madhya Pradesh High Courts have given decisions which support the view advanced on behalf of the assessee. It will be best to examine the reasoning in these decisions because the arguments which have been addressed to us are based mainly on the same grounds. In Commissioner of Expenditure-tax v. T. S. Krishna the Madras High Court referred to the decision of the Madhya Pradesh High Court in Rajkumarsinghji v. Commissioner of Expenditure-tax, which is the subject-matter of the other set of appeals, i.e., Civil Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en a spouse or minor child of an individual or minor child of a coparcener in a Hindu undivided family. Such a discrimination could not have been intended. Another argument which was employed in the Madhya Pradesh case, and which appealed to the High Court was that as the unit of assessment was the individual and not the individual together with his or her spouse and the minor children, the result would be that the expenditure incurred by the husband and the wife separately from their independent sources would be subject to double taxation once with the husband as an assessee and the wife as the dependant and again with the wife as the assessee and the husband as the dependant. This result would follow if section 2(g)(i) is to be interpreted to mean that where the assessee is an individual his or her spouse or minor child would be a dependant irrespective of the fact whether such spouse or minor child was wholly independent of the assessee for support and maintenance. As such an absurd result could not be contemplated by the Act it must be held that it was only that spouse or minor child who was wholly or mainly dependant on the assessee for support and maintenance who would fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure incurred by his dependant is to be included in the computation of the expenditure to be subjected to tax. The other is where the assessee is a Hindu undivided family. Any expenditure incurred by any dependant from out of the income or property transferred directly or indirectly to the dependant by the assessee is to be included in computation of the assessee's liability. Thus the two cases are dealt with separately both in section 2(g) and section 4(ii). In other words, where the assessee is an individual one has to look for his dependant to clause (g)(i) and where the assessee is a Hindu undivided family the dependant has to be found in clause (g)(ii) of section 2. The argument that has been pressed on behalf of the assessee is that the use of the common word to " assessee " in the concluding part of section 4(ii) which can take in both the individual as well as the Hindu undivided family shows that the words preceding it apply to both the cases. It is true that the words " Hindu undivided family " have not been used instead of the word " assessee " towards the concluding part of section 4(ii). But that will not alter the true import of the aforesaid provision read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily. Once the expenditure incurred by both the assessee as an individual and the spouse has been included in his or her assessment of expenditure tax, it cannot be again subjected to tax in the assessment of the other spouse. The learned Solicitor-General agrees to this being the true position. A good deal of reliance has been placed on the decisions which are in favour of the assessee that there is no reasonable basis for making a distinction between an assessee who is an individual and an assessee, that is, a Hindu undivided family, which would justify a different treatment. It was and has been suggested that the relevant provisions of the Act should not be so interpreted as to give rise to discrimination between the two cases, there being no reasonable basis for such discrimination. We find no force or substance in this argument. Firstly, it is not disputed that the case of an individual and that of a Hindu undivided family fall into two different classes. The challenge is based only on there being no nexus between the differentia and the object sought to be achieved by the legislation, the suggestion being that favourable treatment has been accorded to the Hindu undivided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and according to him that word as defined in the first part of section 2(g)(i) of the Act cannot lose its natural signification and import even though the language of the statutory provision seems to confine its meaning to the spouse or minor child of the assessee without any further qualification. The contention of Mr. Chagla cannot be acceded to. In the absence of any ambiguity in the language employed in the first part of section 2(g)(i), we have to go by the plain meaning and that is confined to the spouse or minor child of the assessee when he is an individual irrespective of such spouse or minor child being dependent on, or independent of, the assessee for support and maintenance. As a matter of fact, the whole construction of that clause leaves no room for doubt that in the first part, no question of dependence in fact arises and the spouse or the minor child simpliciter has to be treated as a dependant. The conjunctive word " and " appearing between the two parts makes the intention of the legislature still clearer. The second part or any words in that part do not qualify the first part. We may conclude the discussion on this point by referring to a decision of the Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly all material facts necessary for his assessment, expenditure of his dependant chargeable to tax had escaped assessment. In paragraph 6 also, reliance was placed mainly on the provisions of section 16(a) of the Act but, in paragraph 9, the Expenditure-tax Officer went on to say that the actual expenditure incurred by the assessee's wife was disclosed by her returns filed before him and in consequence of the aforesaid information available to him on 5th May, 1962, he had reason to believe that the expenditure of the assessee chargable to tax had escaped assessment. It was pointed out that the notices which had been issued were within the four years limit applicable to section 16(b) of the Act. It was reiterated that, as the notices had been issued within four years, reassessment proceedings could be sustained either under section 16(a) or section 16(b) of the Act. Section 16 of the Act is in the following terms : " 16. If the Expenditure-tax Officer--- (a) has reason to believe that by reason of the omission or failure on the part of the assessee to make a return of his expenditure under section 13 for any assessment year, or to disclose fully and truly all material fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es which had been issued were confined only to the terms of section 16(a). It is not disputed on behalf of the assessee that if the matter was covered by section 16(b), they would be perfectly valid. The pleadings in the writ petitions covered both clauses of section 16 and, in any case, the Expenditure-tax Officer had made a positive averment that the information with regard to the expenditure incurred by the assessee's wife became available to him only on 5th May, 1962. Thus, the notices which were issued on that date relating to the assessment years 1959-60, 1960-61 and 1961-62 were within the period of four years which was the limit prescribed with regard to action under clause (b), the limit being more in respect of clause (a). In our judgment, this concludes the matter because it was nowhere controverted in the High Court that the requisite information came into the possession of the Expenditure-tax Officer only on 5th May, 1962. In the result, Civil Appeals Nos. 1794 to 1796 of 1967 fail and are hereby dismissed. The other set of appeals, i.e., Civil Appeals Nos. 2389 to 2391 of 1968, of the Commissioner of Expenditure-tax succeed and are hereby allowed. The answer given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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