SooperKanoon Citation | sooperkanoon.com/358716 |
Subject | Direct Taxation |
Court | Mumbai High Court |
Decided On | Jun-09-1999 |
Case Number | Income-tax Reference No. 395 of 1987 |
Judge | B.P. Saraf and ;Ranjana Desai, JJ. |
Reported in | (1999)156CTR(Bom)559; [1999]239ITR382(Bom) |
Acts | Hindu Succession Act, 1956 - Sections 8 |
Appellant | Commissioner of Income-tax |
Respondent | S.R. Kirloskar (ind.) |
Appellant Advocate | P.S. Jetley and ;R.V. Desai, Advs., i/b., L.S. Shetty |
Respondent Advocate | None |
Excerpt:
- code of criminal procedure, 1973 [c.a. no. 2/1974]. section 41: [ swatanter kumar, cj, smt ranjana desai & d.b. bhosale, jj] arrest of accused - held, a police officer or a person empowered to arrest may arrest a person without intervention of the court subject to the limitations specified under the provisions of the code. the provisions of section 41 of the code provides for arrest by a police officer without an order from a magistrate and without a warrant. a distinct and different power under section 44 of the code empowers the magistrate to arrest or order any person to arrest the offender. under section 44 of the code, that power is vested in the court of the magistrate when an offence is committed in his presence. if the legislature has taken care of providing such specific power under section 44 of the code, then there could be no reason for such a power not to be specified under the provisions of chapter xii of the code. in terms of section 41, a police officer may arrest a person without a warrant or order from the magistrate for any or all of the conditions specified in that provision. language of this provision clearly suggested that the police officer can arrest a person without an order from the magistrate. thus, there appears to be no reason why on the strength of section 156(3) of the code, any restriction should be read into the power specifically granted by the legislature to the police officer. of course, freedom of investigation is the essence of these provisions but in order to suppress the mischief it is sufficiently indicated under different provisions of the code that the arresting officer should exercise his power or discretion judiciously and should be free of motive. some kind of inbuilt safeguard is available to the accused in the cases where the magistrate directs investigation under section 156 (3) of the code by taking recourse to the provisions of section 438 of the code by approaching the court of session or the high court for such relief. thus, during the course of investigation of a criminal case, an accused is not remediless and that would further buttress the above view. [jagannath singh v dr. ajay upadyay & anr 2006 cri lj 4274; 2006 (5) air bom r held per incuriam].b.p. saraf, j.1. by this reference under section 256(1) of the income-tax act, 1961, the income-tax appellate tribunal has referred the following question of law to this court for opinion at the instance of the revenue :'whether, on the facts and in the circumstances of the case, the tribunal was right in holding that income derived from intestate self-acquired property received from the assessee's father was taxable in the status of the hindu undivided family ?'2. the material facts giving rise to this reference are as follows :during the assessment year 1978-79, the assessee derived income from house property and business. the assessee claimed that the above incomeshould be assessed in the hands of the assessee's hindu undivided family as the above properties had been received by him from his father who died intestate. the income-tax officer rejected the assessee's claim for being assessed as a hindu undivided family in respect of the above income on the ground that the properties were the self-acquired properties of his father and the assessee received them on the death of his father intestate. he, therefore, assessed the income in the hands of the assessee in his individual status. the assessee appealed to the commissioner of income-tax (appeals). the case of the assessee before the commissioner of income-tax (appeals) was that, income received by the assessee from the self-acquired properties of his deceased father must be assessed in the hands of his hindu undivided family and not in his hands as an individual. the commissioner of income-tax (appeals) accepted the above contention of the assessee and allowed the appeal. against the above order, the revenue appealed to the income-tax appellate tribunal ('the tribunal'). the tribunal followed its own special bench decision in the case of the assessee himself wherein it had been held that income received by the assessee from the self-acquired property of the father inherited by the assessee on his death under section 8 of the hindu succession act should be assessed in his hands in the capacity of a karta of his hindu undivided family and not in his individual capacity. hence, this reference at the instance of the revenue.we have heard mr. p. s. jetly, learned counsel for the revenue. the uncontroverted factual position in this case is that the property in question was the self-acquired property of the assessee's father. the assessee received the same on the death of his father intestate. the property was not coparcenary property or hindu undivided family property in the hands of the deceased father of the assessee. admittedly, it was his self-acquired property. the assessee got the property as his share under section 8 of the hindu succession act.3. the question that arises for consideration is whether the property inherited by the assessee as share of the self-acquired property of his father on his death intestate under section 8 of the hindu succession act, 1956, belongs to the assessee in his individual capacity or it constitutes an asset of the hindu undivided family of the assessee and his sons. there was a divergence of opinion between different high courts at the time when the issue was decided by the special bench of the tribunal on february 8, 1988, which decision has been followed by the tribunal in the present case. the allahabad high court in cit v. ram rakshpal ashok kumar : [1968]67itr164(all) , the madras high court in addl cit v. p. l karuppan chettiar : [1978]114itr523(mad) , the madhya pradesh high court in shrivallabhdas modani v. cit : [1982]138itr673(mp) and the andhra pradesh high court in cwt v. mukundgirji : [1983]144itr18(ap) , had held that the property inherited by a male hindu under section 8 of the hindu succession act would be his separate property and his sons would not acquire any interest by birth in the said property. the gujarat high court in cwt v. harshadlal manilal : [1974]97itr86(guj) and cit v. dr. babubhai mansukhbhai : [1977]108itr417(guj) took a contrary view. in view of the divergence of opinion between different high courts on the issue, the special bench of the tribunal followed the view of the gujarat high court which was favourable to the assessee.4. this controversy, however, now stands concluded by the decision of the supreme court in cwt v. chander sen : [1986]161itr370(sc) whereby the decisions of the allahabad high court, madras high court and the andhra pradesh high court have been approved and the contrary decision of the gujarat high court has been overruled. the supreme court has held in that case that property devolved on a male hindu under section 8 of the hindu succession act, 1956, would not be hindu undivided family property but would be individual property and assessable in his hands. in that case, one chander sen inherited an amount standing to the credit of his father, rangi lal, from whom he had separated by partition in relation to that asset on the death of the father intestate on july 17, 1965. the controversy was whether the amount inherited by chander sen would constitute the asset of the hindu undivided family of chander sen. the case of the assessee before the supreme court was that under the hindu law he inherited the property of his father as a karta of his hindu undivided family. the supreme court considered the above submission of the assessee and observed (page 376) :'there is no dispute among the commentators on hindu law nor in the decisions of the courts that, under the hindu law, as it is, the son would inherit the same as karta of his own family. but the question is, what is the effect of section 8 of the hindu succession act, 1956 ?'5. the supreme court noted the divergent views expressed in this aspect by the allahabad high court, madhya pradesh high court and the andhra pradesh high court on the one side and the gujarat high court on the other side. the supreme court on consideration of the effect of section 8 of the hindu succession act, 1956, on the position that prevailed under the hindu law prior to the enactment of the said act, observed (page 381):'it is necessary to bear in mind the preamble to the hindu succession act, 1956. the preamble states that it was an act to amend and codify the law relating to intestate succession among hindus. in view of the preamble to the act, i.e., to modify where necessary and to codify the law, in our opinion it is not possible when the schedule indicates heirs in class i and only includes son and does not include son's son but does include son of a predeceased son, to say that when a son inherits the property in the situation contemplated by section 8, he takes it as karta of his own undivided family. the gujarat high court's view noted above, if accepted, would mean that though the son of a predeceased son and not the son of a son is intended to be included under section 8 to inherit, the latter would, by applying the old hindu law, get a right by birth to the said property contrary to the scheme outlined in section 8. furthermore, as noted by the andhra pradesh high court, the act makes it clear by section 4 that one should look to the act in case of doubt and not to the pre-existing hindu law. it would be difficult to hold today that property which devolved on a hindu under section 8 of the hindu succession act would be hindu undivided family property in his hands vis-a-vis his own son ; that would amount to creating two classes among the heirs mentioned in class i, the male heirs in whose hands it will be joint hindu family property vis-a-vis their sons and female heirs with respect to whom no such concept could be applied or contemplated. it may be mentioned that heirs, in class i of the schedule under section 8 of the act included widow, mother, daughter of a predeceased son, etc. . . . the express words of section 8 of the hindu succession act, 1956, cannot be ignored and must prevail. the preamble to the act reiterates that the act is, inter alia, to 'amend' the law. with that background, the express language which excludes son's son but includes son of a predeceased son cannot be ignored.' the supreme court approved the decisions of the allahabad high court, madras high court, high court of madhya pradesh and the andhra pradesh high court and overruled the decision of the gujarat high court which has been relied upon by the tribunal in the instant case. in view of the above, the supreme court held that the sums inherited by chander sen in that case belonged to him in his individual capacity and not as the joint hindu family.6. the law is thus clear that after the coming into force of the hindu succession act, 1956, when a son inherits the property of his father in the situation contemplated by section 8 of that act, he takes it in his individual capacity and not as karta of his own hindu undivided family. in other words, the property devolves on him in his individual capacity. in view of the above, in our opinion, the tribunal was not right in holding that the income derived by the assessee from the self-acquired property of his father who died intestate was taxable in the status of the hindu undivided family. the question referred to us is, therefore, answered in the negative, i.e., in favour of the revenue and against the assessee.7. the reference stands disposed of accordingly with no order as to costs.
Judgment:B.P. Saraf, J.
1. By this reference under Section 256(1) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal has referred the following question of law to this court for opinion at the instance of the Revenue :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that income derived from intestate self-acquired property received from the assessee's father was taxable in the status of the Hindu undivided family ?'
2. The material facts giving rise to this reference are as follows :
During the assessment year 1978-79, the assessee derived income from house property and business. The assessee claimed that the above incomeshould be assessed in the hands of the assessee's Hindu undivided family as the above properties had been received by him from his father who died intestate. The Income-tax Officer rejected the assessee's claim for being assessed as a Hindu undivided family in respect of the above income on the ground that the properties were the self-acquired properties of his father and the assessee received them on the death of his father intestate. He, therefore, assessed the income in the hands of the assessee in his individual status. The assessee appealed to the Commissioner of Income-tax (Appeals). The case of the assessee before the Commissioner of Income-tax (Appeals) was that, income received by the assessee from the self-acquired properties of his deceased father must be assessed in the hands of his Hindu undivided family and not in his hands as an individual. The Commissioner of Income-tax (Appeals) accepted the above contention of the assessee and allowed the appeal. Against the above order, the Revenue appealed to the Income-tax Appellate Tribunal ('the Tribunal'). The Tribunal followed its own Special Bench decision in the case of the assessee himself wherein it had been held that income received by the assessee from the self-acquired property of the father inherited by the assessee on his death under Section 8 of the Hindu Succession Act should be assessed in his hands in the capacity of a karta of his Hindu undivided family and not in his individual capacity. Hence, this reference at the instance of the Revenue.
We have heard Mr. P. S. Jetly, learned counsel for the Revenue. The uncontroverted factual position in this case is that the property in question was the self-acquired property of the assessee's father. The assessee received the same on the death of his father intestate. The property was not coparcenary property or Hindu undivided family property in the hands of the deceased father of the assessee. Admittedly, it was his self-acquired property. The assessee got the property as his share under Section 8 of the Hindu Succession Act.
3. The question that arises for consideration is whether the property inherited by the assessee as share of the self-acquired property of his father on his death intestate under Section 8 of the Hindu Succession Act, 1956, belongs to the assessee in his individual capacity or it constitutes an asset of the Hindu undivided family of the assessee and his sons. There was a divergence of opinion between different High Courts at the time when the issue was decided by the Special Bench of the Tribunal on February 8, 1988, which decision has been followed by the Tribunal in the present case. The Allahabad High Court in CIT v. Ram Rakshpal Ashok Kumar : [1968]67ITR164(All) , the Madras High Court in Addl CIT v. P. L Karuppan Chettiar : [1978]114ITR523(Mad) , the Madhya Pradesh High Court in Shrivallabhdas Modani v. CIT : [1982]138ITR673(MP) and the Andhra Pradesh High Court in CWT v. Mukundgirji : [1983]144ITR18(AP) , had held that the property inherited by a male Hindu under Section 8 of the Hindu Succession Act would be his separate property and his sons would not acquire any interest by birth in the said property. The Gujarat High Court in CWT v. Harshadlal Manilal : [1974]97ITR86(Guj) and CIT v. Dr. Babubhai Mansukhbhai : [1977]108ITR417(Guj) took a contrary view. In view of the divergence of opinion between different High Courts on the issue, the Special Bench of the Tribunal followed the view of the Gujarat High Court which was favourable to the assessee.
4. This controversy, however, now stands concluded by the decision of the Supreme Court in CWT v. Chander Sen : [1986]161ITR370(SC) whereby the decisions of the Allahabad High Court, Madras High Court and the Andhra Pradesh High Court have been approved and the contrary decision of the Gujarat High Court has been overruled. The Supreme Court has held in that case that property devolved on a male Hindu under Section 8 of the Hindu Succession Act, 1956, would not be Hindu undivided family property but would be individual property and assessable in his hands. In that case, one Chander Sen inherited an amount standing to the credit of his father, Rangi Lal, from whom he had separated by partition in relation to that asset on the death of the father intestate on July 17, 1965. The controversy was whether the amount inherited by Chander Sen would constitute the asset of the Hindu undivided family of Chander Sen. The case of the assessee before the Supreme Court was that under the Hindu law he inherited the property of his father as a karta of his Hindu undivided family. The Supreme Court considered the above submission of the assessee and observed (page 376) :
'There is no dispute among the commentators on Hindu law nor in the decisions of the courts that, under the Hindu law, as it is, the son would inherit the same as karta of his own family. But the question is, what is the effect of Section 8 of the Hindu Succession Act, 1956 ?'
5. The Supreme Court noted the divergent views expressed in this aspect by the Allahabad High Court, Madhya Pradesh High Court and the Andhra Pradesh High Court on the one side and the Gujarat High Court on the other side. The Supreme Court on consideration of the effect of Section 8 of the Hindu Succession Act, 1956, on the position that prevailed under the Hindu law prior to the enactment of the said Act, observed (page 381):
'It is necessary to bear in mind the preamble to the Hindu Succession Act, 1956. The preamble states that it was an Act to amend and codify the law relating to intestate succession among Hindus.
In view of the preamble to the Act, i.e., to modify where necessary and to codify the law, in our opinion it is not possible when the Schedule indicates heirs in Class I and only includes son and does not include son's son but does include son of a predeceased son, to say that when a son inherits the property in the situation contemplated by Section 8, he takes it as karta of his own undivided family. The Gujarat High Court's view noted above, if accepted, would mean that though the son of a predeceased son and not the son of a son is intended to be included under Section 8 to inherit, the latter would, by applying the old Hindu law, get a right by birth to the said property contrary to the scheme outlined in Section 8. Furthermore, as noted by the Andhra Pradesh High Court, the Act makes it clear by Section 4 that one should look to the Act in case of doubt and not to the pre-existing Hindu law. It would be difficult to hold today that property which devolved on a Hindu under Section 8 of the Hindu Succession Act would be Hindu undivided family property in his hands vis-a-vis his own son ; that would amount to creating two classes among the heirs mentioned in Class I, the male heirs in whose hands it will be joint Hindu family property vis-a-vis their sons and female heirs with respect to whom no such concept could be applied or contemplated. It may be mentioned that heirs, in Class I of the Schedule under Section 8 of the Act included widow, mother, daughter of a predeceased son, etc. . . .
The express words of Section 8 of the Hindu Succession Act, 1956, cannot be ignored and must prevail. The preamble to the Act reiterates that the Act is, inter alia, to 'amend' the law. With that background, the express language which excludes son's son but includes son of a predeceased son cannot be ignored.'
The Supreme Court approved the decisions of the Allahabad High Court, Madras High Court, High Court of Madhya Pradesh and the Andhra Pradesh High Court and overruled the decision of the Gujarat High Court which has been relied upon by the Tribunal in the instant case. In view of the above, the Supreme Court held that the sums inherited by Chander Sen in that case belonged to him in his individual capacity and not as the joint Hindu family.
6. The law is thus clear that after the coming into force of the Hindu Succession Act, 1956, when a son inherits the property of his father in the situation contemplated by Section 8 of that Act, he takes it in his individual capacity and not as karta of his own Hindu undivided family. In other words, the property devolves on him in his individual capacity. In view of the above, in our opinion, the Tribunal was not right in holding that the income derived by the assessee from the self-acquired property of his father who died intestate was taxable in the status of the Hindu undivided family. The question referred to us is, therefore, answered in the negative, i.e., in favour of the Revenue and against the assessee.
7. The reference stands disposed of accordingly with no order as to costs.