1974 Supreme(Cal) 160

HIGH COURT OF CALCUTTA
A. N. Sen, R. N. Pyne
BHUPATRAI HIRACHAND - Appellant
Versus
COMMISSIONER OF INCOME-TAX - Respondent
Income-Tax Reference 167  Of  1963
Decided On : JUNE 18, 1974

The share of the assessee's widowed mother in the property is definite and ascertainable and, therefore, Section 9 (3) of the Indian Income-tax Act, 1922, is applicable.

Headnote:

INCOME TAX - Hindu undivided family - Status - Whether the assessee's widowed mother is a member of the Hindu undivided family of which the assessee is the karta - Whether the income from business and house property could be assessed in the hands of such Hindu undivided family - Whether the half share of the property income (representing the interest of assessee's widowed mother) should be excluded from the total income of the Hindu undivided family under Section 9 (3) of the Indian Income-tax Act, 1922 - Whether Tribunal could, in law, sustain the validity of assessments for the assessment years 1955-56, 1956-57 and 1957-58, with reference to the provisions of Section 34 (1) (b) though the Income-tax Officer purported to initiate proceedings for these years under Section 34 (1) (a) of the Indian Income-tax Act, 1922.

Fact of the Case:

Liladhar, a Hindu governed by the Mitakshara school of law, died on March 31, 1943, leaving behind his widow, Smt. Kankubai, and a son, the applicant, Bhupatrai Hirachand, who at the time was near about 18 years of age. Liladhar carried on business under the style of "liladhar Hirachand" and also had acquired house property. The business was his individual business. The house property was also his self-acquired property. In respect of income from the said business and also the house property Liladhar was assessed to income-tax in the status of individual up to the assessment year 1943-44. From the assessment year 1944-45, Bhupatrai Hirachand, the assessee, was assessed as individual in respect of the income from the said two sources right up to the assessment year 1952-53. For the assessment year 1953-54, the business income as well as the property income had been clubbed together as before. But, on appeal preferred by the assessee against the order of the Income-tax Officer for the said year, the Appellate Assistant Commissioner held that under the Hindu Women's Rights to Property Act, 1937, the assessee's widowed mother had half share and so only the half share of the income should be assessed in the hands of the assessee. Thereafter, assessments were made for the assessment years 1954-55, 1955-56, 1956-57 and 1957-58, on the assessee in the status of individual including therein income from business and half share of income from property. Such assessments for 1955-56, 1956-57 and 1957-58 were made on November 1, 1957, December 7, 1957, and July 31, 1957. In course of the assessment proceedings for the assessment year 1958-59, the Income-tax Officer went into the question of status and came to the conclusion that the correct status of the assessee should be that of Hindu undivided family and not individual. In that assessment year he held that the income from the business as well as the entire, income from house property were assessable in the hands of the assessee in the status of Hindu undivided family. The assessment for the assessment year 1958-59 was completed on July 11, 1959.

Finding of the Court:

1. The widowed mother of the assessee is a member of the Hindu undivided family of which the assessee is the karta. 2. The income from the business and the house property should be assessed in the hands of the Hindu undivided family subject to this qualification that in respect of the income from house property only half share thereof should be so assessed in view of the answer to question No. (iii). 3. The share of the assessee's widowed mother in the property is definite and ascertainable and, therefore, Section 9 (3) of the Indian Income-tax Act, 1922, is applicable. 4. The Tribunal was competent to deal with the point and was justified in upholding the assessment under Section 34 (1) (b) of the Indian Income-tax Act, 1922.

Issues: 1. Whether the assessee's widowed mother is a member of the Hindu undivided family of which the assessee is the karta? 2. Whether the income from business and house property could be assessed in the hands of such Hindu undivided family? 3. Whether the half share of the property income (representing the interest of assessee's widowed mother) should be excluded from the total income of the Hindu undivided family under Section 9 (3) of the Indian Income-tax Act, 1922? 4. Whether Tribunal could, in law, sustain the validity of assessments for the assessment years 1955-56, 1956-57 and 1957-58, with reference to the provisions of Section 34 (1) (b) though the Income-tax Officer purported to initiate proceedings for these years under Section 34 (1) (a) of the Indian Income-tax Act, 1922?

Ratio Decidendi: 1. A Hindu undivided family consists of all persons lineally descended from a common ancestor, and include their wives and unmarried daughters. 2. A widow can be a member of a joint Hindu family. 3. The share of the assessee's widowed mother in the property is definite and ascertainable and, therefore, Section 9 (3) of the Indian Income-tax Act, 1922, is applicable. 4. Where proceedings are taken under Section 34 (1) (a) by the Income-tax Officer the same can be upheld by the Tribunal under Section 34 (1) (b) even though relevant conditions for taking action under that sub-section are fulfilled.

Final Decision: 1. The question "Whether, in the facts and circumstances of the case, Bhupatrai Hirachand constituted a Hindu undivided family consisting of himself and his widowed mother?" is answered in the affirmative. 2. The question "If the answer to question No. (i) is in the affirmative whether the income from properly and from business could be assessed in the hands of such Hindu undivided family?" is answered in the affirmative subject to the qualification that in respect of the income from house property only half share thereof should be so assessed in view of the answer to question No. (iii). 3. The question "Whether, in the facts and circumstances of the case, the half share of the property income (representing the interest of Bhupatrai Hirachand's widowed mother) should be excluded from the total income of the Hindu undivided family under Section 9 (3) of the Indian Income-tax Act, 1922?" is answered in the affirmative. 4. The question "Whether Tribunal could, in law, sustain the validity of assessments for the assessment years 1955-56, 1956-57 and 1957-58, with reference to the provisions of Section 34 (1) (b) though the Income-tax Officer purported to initiate proceedings for these years under Section 34 (1) (a) of the Indian Income-tax Act, 1922?" is answered in the affirmative.