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Issues: Interpretation of the term "member" in the context of higher tax rates for Hindu undivided families.
The judgment delivered by the High Court of Andhra Pradesh pertains to a reference made by the Income-tax Appellate Tribunal regarding the interpretation of the term "member" in relation to the higher tax rates applicable to Hindu undivided families under the Income-tax Act, 1961. The specific question referred to the court was whether the word "member" includes a female member of a Mitakshara Hindu undivided family, thereby justifying the assessment of the family at the higher tax rates prescribed in the Finance Act. The assessee, a Hindu undivided family, objected to the application of higher tax rates on the grounds that the term "member" should be construed as referring only to a male member and not a female member. However, both the Revenue and the appellate authorities upheld the assessment at the higher rates, leading to the present reference before the High Court. The court analyzed the relevant provisions of the Finance Act and the Income-tax Act to interpret the term "member" in the context of Hindu undivided families. The court noted that the provision clearly states that if any member of the family, whether male or female, earns income exceeding the specified limit, the higher tax rates are applicable. The court rejected the contention that the term "member" should be restricted to male members only, emphasizing that the Legislature intentionally used the term "member" to encompass both male and female members of a joint family. The court highlighted that if the Legislature intended to refer specifically to male members, it would have used the term "coparcener" instead. Therefore, the court concluded that the Revenue did not err in taxing the income of the joint family at the higher rates specified in the Finance Act. Additionally, the court referred to a previous decision by a Division Bench of the same court in Prem Chand v. CIT [1984] 148 ITR 440 (AP), where a similar issue was considered, and the application of higher tax rates to Hindu undivided families with female members was upheld. In light of the above analysis and the precedent set by the Division Bench, the court answered the question referred in the affirmative, ruling in favor of the Revenue and against the assessee. The court also decided that no costs would be awarded, with the advocate's fee set at Rs. 300.
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