TMI Blog1966 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... d. - C.A. 328 OF 1965 - - - Dated:- 10-1-1966 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SHAH J.---One Buddappa, his wife, his two unmarried daughters and his adopted son Buddanna were members of a Hindu undivided family. Buddappa died on July 9, 1952. In respect of the business dealings of the family, Buddappa was assessed during his lifetime in the status of a manager of the Hindu undivided family. For the assessment year 1951-52 the Additional Income-tax Officer, Raichur, assessed Buddanna in respect of the income of the previous year which ended on November 8, 1950, as a Hindu undivided family under the title "Sri Gowli Buddappa (deceased) represented by his legal successor Sri Gowli Buddanna, Oil Mills Owner, Raichur." The order of assessment was confirmed in appeal by the Appellate Assistant Commissioner, subject to the variation that the assessment was made under the title " Buddanna---a Hindu undivided family ". The Income-tax Appellate Tribunal confirmed the order of the Appellate Assistant Commissioner. The Tribunal then referred the following questions of law to the High Court of Mysor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are entitled to the benefit of the Hindu Women's Rights to Property Act, 1937, or the Hindu Succession Act, 1956. The first contention is plainly unsustainable. Under section 3 of the Income-tax Act, not a Hindu coparcenary but a Hindu undivided family is one of the assessable entities. A Hindu joint family consists of all persons' lineally descended from a common ancestor, and includes their wives and unmarried daughters. A Hindu coparcenary is a much narrower body than the joint family: it includes only those persons who acquire by birth an interest in the joint or coparcenary property, these being the sons, grandsons and great-grandsons of the holder of the joint property for the time being. Therefore, there may be a joint Hindu family consisting of a single male member and widows of deceased coparceners. In Kalyanji Vithaldas v. Commissioner of Income-tax, delivering the judgment of the judicial Committee, Sir George Rankin observed : "The phrase 'Hindu undivided family' is used in the statute with reference, not to one school only of Hindu law, but to all schools; and their Lordships think it a mistake in method to begin by pasting over the wider phrase of the Act the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary. Reliance was also placed upon the form of "Return" prescribed under the Rules, which by section 59 of the Income-tax Act, 1922, have effect as if enacted in the Act. Part IIIA of the form prescribes certain particulars to be incorporated in the case of a Hindu undivided family, viz., names of members of the family at the end of the previous year who were entitled to claim partition, relationship, age at the end of the previous year and remarks, but thereby it is not intended that a Hindu undivided family as an assessable entity does not exist so long as there are not at least two or more members entitled to claim partition. The information is required to be given in Part IIIA of the form merely to enable the Income-tax Officer to consider which of the two parts of the proviso in the First Schedule to the relevant Finance Act prescribing the limit of exemption in respect of the Hindu undivided family applies. Sub-section (1) of section 25A on which reliance was placed also does not imply that a Hindu undivided family must consist of more male members than one. The sub-section only prescribes the procedure whereby the members of a family which has hitherto been assessed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived too readily at the conclusion that the income was the income of the family." The Judicial Committee further observed : " ... under section 3 or section 55 income is not to be attributed to any one of the five classes of persons mentioned by any loose or extended interpretation of the words, but only where the application of the words is warranted by their ordinary legal meaning.... In an extra legal sense, and even for some purposes of legal theory, ancestral property may perhaps be described, and usefully described, as family property; but it does not follow that in the eye of the Hindu law it belongs, save in certain circumstances, to the family as distinct from the individual. By reason of its origin a man's property may be liable to be divested wholly or in part on the happening of a particular event, or may be answerable for particular obligations, or may pass at his death in a particular way; but if, in spite of all such facts, his personal law regards him as the owner, the property as his property and the income therefrom as his income, it is chargeable to income-tax as his, i.e., as the income of an individual. In their Lordships' view it would not be in consonan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the source was held by a member who had received it from his father and was on that account ancestral, the income could not be deemed for purposes of assessment to be income of a Hindu undivided family, even though Kanji had a wife and a daughter, and Sewdas had a wife who had rights to be maintained under the Hindu law. In Gomedalli Lakshminarayan's case the property was ancestral in the hands of the father, and the son had acquired by birth an interest therein. There was a subsisting Hindu undivided family during the lifetime of the father and that family did not come to an end on his death. On these facts the High Court of Bombay held that the income received from the property was liable to super-tax in the hands of the son who was the surviving male member of the Hindu undivided family in the year of assessment. This distinction in the facts in the case then under discussion and the facts in Gomedalli Lakshminarayan's case was not adverted to and the Board observed in Kalyanji Vithaldas's case that the Bombay High Court "arrived too readily at the conclusion that the income was the income of the family". When Gomedalli Lakshminarayan's case was carried in appeal to the Judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u undivided family was exempt from payment of estate duty. At all material times, the female members of the family had the right of maintenance and other rights which belonged to them as such members. The widows in the family including the widow of the pre-deceased son had also the power to introduce coparceners in the family by adoption, and that power was exercised after the death of Arunachalam. On a claim to estate duty in respect of Arunachalam's estate in Ceylon, it was held that Arunachalam was at his death a member of a Hindu undivided family, the same undivided family of which his son, when alive, was a member, and of which the continuity was preserved after Arunachalam's death by adoptions by the widows of the family. The Judicial Committee observed at page 543 : " . . . though it may be correct to speak of him (the sole surviving coparcener) as the 'owner', yet it is still correct to describe that which he owns as the joint family property. For his ownership is such that upon the adoption of a son it assumes a different quality : it is such, too, that female members of the family (whose members may increase) have a right to maintenance out of it and in some circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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