Commissioner of Income-tax Vs. Mulchand Sukmal Jain - Court Judgment

Excerpt:
- u.l. bhat, c.j. 1. this reference under section 256(1) of the income-tax act, 1961 (for short, 'the act'), has been made at the instance of the revenue. the following is the question referred to the high court : 'whether, on the facts and in the circumstances of the case, the tribunal was justified in holding that there was a valid partition for purposes of section 171 of the income-tax act, 1961, in the hindu undivided family consisting of son and mother only ?' 2. the assessment in question relates to the assessment year 1979-80. the assessee is a hindu undivided family consisting of a son and his mother only. the assessee contended before the income-tax officer that there was an oral partition or family arrangement which took effect from april 4, 1979, and, in confirmation of the same, the parties executed a document on may 18, 1979, and, under the partition, immovable properties described in schedule 'b' were allotted to the son and movable properties described in schedule 'c' were allotted to the mother and thereafter they have been enjoying the properties separately. on these averments, it was contended that the hindu undivided family cannot be assessed and the individuals may be assessed. the income-tax officer overruled this contention on the ground that the mother, though she is a member of the hindu undivided family, is not a coparcener and there cannot be a partition between the only male member of the hindu undivided family and a female member and the partition, therefore, is not valid and cannot be recognised for the purpose of section 171 of the act. in appeal by the assessee, the appellate assistant commissioner reversed the finding of the income-tax officer and upheld the partition and directed the income-tax officer to pass consequential orders. in appeal by the revenue, the tribunal upheld the order of the appellate assistant commissioner. 3. sub-section (1) of section 171 of the act states that a hindu family hitherto assessed as undivided shall be deemed for the purposes of this act to continue to be a hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the hindu undivided family. sub-section (2) requires that, when a claim is made in regard to a partition by any member of the hindu undivided family, the assessing officer shall make an inquiry thereinto after giving notice of the inquiry to all the members of the family. on completion of the inquiry, sub-section (3) requires the officer to record a finding as to whether there has been a total or partial partition of the joint family property, and, if there has been such a partition, the date on which it has taken place. according to sub-section (4) where a finding of total or partial partition has been recorded by the assessing officer and the partition took place during the previous year, the total income of the joint family in respect of the period up to the date of partition shall be assessed as if no partition had taken place. some of the sub-sections deal with partial partition and are not relevant for the purpose of this case since we are dealing with the case of a complete partition. 4. learned counsel for the revenue contended that if there is only one male member in the hindu undivided family, the female member of the hindu undivided family cannot claim partition and relied on the decisions of the rajasthan high court in dalichand tejraj v. cit of the madras high court in v.v.s. natarajan v. cit : [1978]111itr539(mad) and of the gujarat high court in cit v. shantikumar jagabhai : [1976]105itr795(sc) . on behalf of the assessee, reliance is placed on the decisions of the punjab and haryana high court in cit v. narain dass wadhwa and ram narain paliwal v. cit . 5. a joint hindu family consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. it may consist of a single member and widows of deceased m.ale members or unmarried daughters. the property of a joint family does not cease to be joint family property merely because the family is represented by a single male member who possesses rights which an absolute owner of property may possess or by temporary reduction of the coparcenary unit to a single individual. a hindu coparcenary is a much narrower body than a joint family and includes only those persons who acquire by birth an interest in the joint or coparcenary property, that is, sons, grandsons and great grandsons of the holder of the joint property for the time being. no female can be a coparcener although a female can be a member of a joint hindu family. in mitakshara law, coparcenary property is that in which every coparcener has a joint interest and joint possession and it devolves by survivorship and not by succession. it is property in which male issue of the coparcenary acquires an interest by birth. the incident of survivorship has been modified by the provisions of the hindu women's rights to property act, 1937, and the provisions of the hindu succession act, 1956. 6. under the mitakshara law, on the death of a coparcener his interest in the coparcenary property does not pass by succession to his heirs ; it passes by survivorship to other coparceners. this rule has been modified by the proviso to section 6 of the hindu succession act, 1956. according to section 6, when a male hindu dies after the commencement of this act, having at the time of his death an interest in mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this act. this, of course, is a reiteration of the principle of mitakshara law. the proviso to section 6 states that, if the deceased had left him surviving a female relative specified in class i of the schedule (i.e.,daughter, widow, mother, son of a pre-deceased son, daughter of a predeceased son, son of a pre-deceased daughter, daughter of a pre-deceased daughter, widow of a pre-deceased son) or a male relative specified in that class (i.e., son, son of a pre-deceased son, son of a pre-deceased daughter, son of a pre-deceased son of a pre-deceased son), who claims through such female relative, the interest of the deceased in the mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this act and not by survivorship. according to explanation 1, for the purposes of this section, the interest of a hindu mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not. according to the explanation to section 30, the interest of a male hindu in a mitakshara coparcenary property may be disposed of by him by will or other testamentary disposition. section 8 lays down the general rule of succession in the case of males. the most preferential heirs are the relatives classified in class i of the schedule, who include son, daughter, widow, mother, etc. section 10 lays down the rule of distribution of property among heirs specified in class i of the schedule. the intestate's widow shall take one share, the surviving sons and daughters and the mother of the intestate shall each take one share. 7. in the present case, admittedly, the father died after the coming into force of the hindu succession act, 1956, leaving only the son and the son's mother. therefore, the undivided share of the father did not pass by survivorship but passed by succession to the two heirs, namely, the son and the widow. 8. under the pristine mitakshara law, though every coparcener is entitled to a share on partition, every coparcener may not have an unqualified right to enforce or sue for partition. the wife cannot herself demand partition but, if a partition takes place between the husband and the son, she may be entitled to receive a share equal to that of the son in lieu of maintenance and hold it separately from her husband. the argument on behalf of the revenue is based on this principle. the argument ignores the changes brought about in the mitakshara law by various statutes including the hindu succession act, 1956. under the provisions of the hindu succession act, 1956, even where a coparcener, that is, a male member of the joint family dies undivided, his interest, namely, the share that would have been allotted to him if a partition had taken place immediately before his death, would devolve by successionon the heirs as stipulated therein. in the present case, the undivided share of the father devolved on the widow and the son by succession in moities. the heirs, on intestate succession or inheritance, take the share of the deceased coparcener as tenants-in-common and not as joint tenants, as is made clear in section 19(b) of the hindu succession act. on the death of a coparcener leaving such heirs as is contemplated in the proviso to section 6, the status of the family does not become disrupted. it is only for the purpose of quantifying the interest of the deceased coparcener for the purpose of inheritance that a calculation is made as to what he would have obtained had there been a partition immediately before his death. however, there can be no legal fiction by which the family would become disrupted. but so far as the interest of the deceased coparcener which devolves by inheritance on his heirs is concerned, the heirs take the same as tenants-in-common. in other words, on the death of a coparcener, his share would devolve on his heirs and the balance share would continue to be the asset of the coparcenary. the rule of pristine mitakshara law that when, in a family consisting of father, mother and son, partition takes place between the male members, the mother may be entitled to a share equal to that of the son in lieu of her claim for maintenance, but she herself cannot demand partition, cannot apply to a state of affairs reached on the death of her husband. the widow as an heir of her husband would certainly be entitled to claim the share inherited by her and, for that purpose, compel a partition. the high courts which have taken a contrary view have not considered the impact of the provisions of the hindu succession act on the principles of mitakshara law in this regard and we, therefore, respectfully disagree from the view taken by these courts. 9. the only ground on which it is argued that the partition is not valid is that there cannot be partition in a joint family consisting only of a male and a female and we have held that this principle of mitakshara law stands modified to the extent indicated above in view of the provisions of the hindu succession act. we, therefore, answer the question in the affirmative, that is, in favour of the assessee and against the revenue. 10. copies of the order under the signature of the registrar and seal of the court will be transmitted to the tribunal. n.g. das, j. 11. i agree.

Judgment:

U.L. Bhat, C.J.

1. This reference under Section 256(1) of the Income-tax Act, 1961 (for short, 'the Act'), has been made at the instance of the Revenue. The following is the question referred to the High Court :

'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was a valid partition for purposes of Section 171 of the Income-tax Act, 1961, in the Hindu undivided family consisting of son and mother only ?'

2.

The assessment in question relates to the assessment year 1979-80. The assessee is a Hindu undivided family consisting of a son and his mother only. The assessee contended before the Income-tax Officer that there was an oral partition or family arrangement which took effect from April 4, 1979, and, in confirmation of the same, the parties executed a document on May 18, 1979, and, under the partition, immovable properties described in Schedule 'B' were allotted to the son and movable properties described in Schedule 'C' were allotted to the mother and thereafter they have been enjoying the properties separately. On these averments, it was contended that the Hindu undivided family cannot be assessed and the individuals may be assessed. The Income-tax Officer overruled this contention on the ground that the mother, though she is a member of the Hindu undivided family, is not a coparcener and there cannot be a partition between the only male member of the Hindu undivided family and a female member and the partition, therefore, is not valid and cannot be recognised for the purpose of Section 171 of the Act. In appeal by the assessee, the Appellate Assistant Commissioner reversed the finding of the Income-tax Officer and upheld the partition and directed the Income-tax Officer to pass consequential orders. In appeal by the Revenue, the Tribunal upheld the order of the Appellate Assistant Commissioner.

3. Sub-section (1) of Section 171 of the Act states that a Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family. Sub-section (2) requires that, when a claim is made in regard to a partition by any member of the Hindu undivided family, the Assessing Officer shall make an inquiry thereinto after giving notice of the inquiry to all the members of the family. On completion of the inquiry, Sub-section (3) requires the officer to record a finding as to whether there has been a total or partial partition of the joint family property, and, if there has been such a partition, the date on which it has taken place. According to Sub-section (4) where a finding of total or partial partition has been recorded by the Assessing Officer and the partition took place during the previous year, the total income of the joint family in respect of the period up to the date of partition shall be assessed as if no partition had taken place. Some of the sub-sections deal with partial partition and are not relevant for the purpose of this case since we are dealing with the case of a complete partition.

4.

Learned counsel for the Revenue contended that if there is only one male member in the Hindu undivided family, the female member of the Hindu undivided family cannot claim partition and relied on the decisions of the Rajasthan High Court in Dalichand Tejraj v. CIT of the Madras High Court in V.V.S. Natarajan v. CIT : [1978]111ITR539(Mad) and of the Gujarat High Court in CIT v. Shantikumar Jagabhai : [1976]105ITR795(SC) . On behalf of the assessee, reliance is placed on the decisions of the Punjab and Haryana High Court in CIT v. Narain Dass Wadhwa and Ram Narain Paliwal v. CIT .

5. A joint Hindu family consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. It may consist of a single member and widows of deceased m.ale members or unmarried daughters. The property of a joint family does not cease to be joint family property merely because the family is represented by a single male member who possesses rights which an absolute owner of property may possess or by temporary reduction of the coparcenary unit to a single individual. A Hindu coparcenary is a much narrower body than a joint family and includes only those persons who acquire by birth an interest in the joint or coparcenary property, that is, sons, grandsons and great grandsons of the holder of the joint property for the time being. No female can be a coparcener although a female can be a member of a joint Hindu family. In Mitakshara law, coparcenary property is that in which every coparcener has a joint interest and joint possession and it devolves by survivorship and not by succession. It is property in which male issue of the coparcenary acquires an interest by birth. The incident of survivorship has been modified by the provisions of the Hindu Women's Rights to Property Act, 1937, and the provisions of the Hindu Succession Act, 1956.

6. Under the Mitakshara law, on the death of a coparcener his interest in the coparcenary property does not pass by succession to his heirs ; it passes by survivorship to other coparceners. This rule has been modified by the proviso to Section 6 of the Hindu Succession Act, 1956. According to Section 6, when a male Hindu dies after the commencement of this Act, having at the time of his death an interest in Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act. This, of course, is a reiteration of the principle of Mitakshara law. The proviso to Section 6 states that, if the deceased had left him surviving a female relative specified in class I of the Schedule (i.e.,

daughter, widow, mother, son of a pre-deceased son, daughter of a predeceased son, son of a pre-deceased daughter, daughter of a pre-deceased daughter, widow of a pre-deceased son) or a male relative specified in that class (i.e., son, son of a pre-deceased son, son of a pre-deceased daughter, son of a pre-deceased son of a pre-deceased son), who claims through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship. According to Explanation 1, for the purposes of this section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not. According to the Explanation to Section 30, the interest of a male Hindu in a Mitakshara coparcenary property may be disposed of by him by will or other testamentary disposition. Section 8 lays down the general rule of succession in the case of males. The most preferential heirs are the relatives classified in class I of the Schedule, who include son, daughter, widow, mother, etc. Section 10 lays down the rule of distribution of property among heirs specified in class I of the Schedule. The intestate's widow shall take one share, the surviving sons and daughters and the mother of the intestate shall each take one share.

7. In the present case, admittedly, the father died after the coming into force of the Hindu Succession Act, 1956, leaving only the son and the son's mother. Therefore, the undivided share of the father did not pass by survivorship but passed by succession to the two heirs, namely, the son and the widow.

8. Under the pristine Mitakshara law, though every coparcener is entitled to a share on partition, every coparcener may not have an unqualified right to enforce or sue for partition. The wife cannot herself demand partition but, if a partition takes place between the husband and the son, she may be entitled to receive a share equal to that of the son in lieu of maintenance and hold it separately from her husband. The argument on behalf of the Revenue is based on this principle. The argument ignores the changes brought about in the Mitakshara law by various statutes including the Hindu Succession Act, 1956. Under the provisions of the Hindu Succession Act, 1956, even where a coparcener, that is, a male member of the joint family dies undivided, his interest, namely, the share that would have been allotted to him if a partition had taken place immediately before his death, would devolve by succession

on the heirs as stipulated therein. In the present case, the undivided share of the father devolved on the widow and the son by succession in moities. The heirs, on intestate succession or inheritance, take the share of the deceased coparcener as tenants-in-common and not as joint tenants, as is made clear in Section 19(b) of the Hindu Succession Act. On the death of a coparcener leaving such heirs as is contemplated in the proviso to Section 6, the status of the family does not become disrupted. It is only for the purpose of quantifying the interest of the deceased coparcener for the purpose of inheritance that a calculation is made as to what he would have obtained had there been a partition immediately before his death. However, there can be no legal fiction by which the family would become disrupted. But so far as the interest of the deceased coparcener which devolves by inheritance on his heirs is concerned, the heirs take the same as tenants-in-common. In other words, on the death of a coparcener, his share would devolve on his heirs and the balance share would continue to be the asset of the coparcenary. The rule of pristine Mitakshara law that when, in a family consisting of father, mother and son, partition takes place between the male members, the mother may be entitled to a share equal to that of the son in lieu of her claim for maintenance, but she herself cannot demand partition, cannot apply to a state of affairs reached on the death of her husband. The widow as an heir of her husband would certainly be entitled to claim the share inherited by her and, for that purpose, compel a partition. The High Courts which have taken a contrary view have not considered the impact of the provisions of the Hindu Succession Act on the principles of Mitakshara law in this regard and we, therefore, respectfully disagree from the view taken by these courts.

9. The only ground on which it is argued that the partition is not valid is that there cannot be partition in a joint family consisting only of a male and a female and we have held that this principle of Mitakshara law stands modified to the extent indicated above in view of the provisions of the Hindu Succession Act. We, therefore, answer the question in the affirmative, that is, in favour of the assessee and against the Revenue.

10. Copies of the order under the signature of the Registrar and seal of the court will be transmitted to the Tribunal.

N.G. Das, J.

11. I agree.