1986 (12) TMI 30 - HC - Income Tax

Summary

Issues:
Whether the status of an individual assessee governed by Hindu law would change to that of a Hindu undivided family under the Income-tax Act merely on his marriage (as yet without issue).

Analysis:
The case involved a respondent-assessee who was originally a member of a larger Hindu undivided family and had a partial partition in 1956. After his marriage in 1966, he filed returns both as an individual and as a Hindu undivided family. The Income-tax Officer maintained his status as an individual, leading to appeals and subsequent Tribunal decision in favor of the assessee, considering him as a Hindu undivided family post-marriage. The Commissioner of Income-tax sought reference from the Tribunal, which was declined, leading to the matter being brought before the High Court.

The High Court analyzed the concept of Hindu undivided family under the Income-tax Act and the basic rule of Hindu law regarding the revolution of shares acquired on partition. The court highlighted that the respondent held his share as separate property post-partition and marriage did not automatically convert his status to that of a Hindu undivided family. The court referred to precedents like C. Krishna Prasad v. CIT and Surjit Lal Chhabda v. CIT to support the argument that marriage without any issue does not change the individual status for income tax purposes.

The court emphasized that even in cases where an unmarried daughter was involved, the status of the assessee as an individual would not change post-marriage. Referring to the Madhya Pradesh High Court case of CIT v. Vishnukumar Bhaiya, the court reiterated that marriage without issue does not alter the individual status for income tax assessment. The court also addressed the argument of variance between different judgments, clarifying that the cases of C. Krishna Prasad and Surjit Lal Chhabda were complementary and supported the Revenue's position.

Ultimately, the court held that the status of an individual assessee governed by Hindu law does not automatically change to that of a Hindu undivided family under the Income-tax Act upon marriage. The Tribunal's decision in considering the assessee as a Hindu undivided family post-marriage was deemed incorrect in law, and the answer to the referred question was given in favor of the Revenue.