1962 (6) TMI 58 - HC - Income Tax

Summary

Issues:
1. Whether a sole male surviving coparcener, his widowed mother, and sisters constitute a Hindu undivided family under the Income-tax Act?
2. Whether the assessment of income in the hands of the Hindu undivided family was correct?
3. Whether the Appellate Assistant Commissioner was entitled to correct the status?

Analysis:

Issue 1:
The case involved determining whether a sole male surviving coparcener, along with his widowed mother and sisters, constituted a Hindu undivided family (HUF) under the Income-tax Act. The absence of a specific definition of "Hindu undivided family" in the Act required reference to customary Hindu law. The argument was made that unless a family had more than one coparcener, assessment as an HUF was not valid. Reference was made to the Calcutta High Court case of In re Moolji Sicka, which supported this view. However, the Bombay High Court in Commissioner of Income-tax v. Gomedalli Lakshmi-narayan held that an HUF could include female members entitled to maintenance, supporting a broader interpretation. The Madras High Court in Commissioner of Income-tax v. Lakshmanan Chettiar also supported this broader view, emphasizing that the income of the HUF belonged to the family collectively.

Issue 2:
The correctness of the assessment of income in the hands of the Hindu undivided family was also questioned. The Judicial Committee in Kalyanji Vithaldas v. Commissioner of Income-tax disagreed with the Calcutta High Court's narrow interpretation of the term "Hindu undivided family." The Judicial Committee held that the phrase encompassed all schools of Hindu law and could include female members. The case at hand involved a sole male coparcener with a wife, adoptive mother, and sister, falling within the definition of an HUF. The Madras High Court decision in Commissioner of Income-tax v. Lakshmanan Chettiar further supported this interpretation, emphasizing the collective ownership of income within an HUF.

Issue 3:
Regarding the entitlement of the Appellate Assistant Commissioner to correct the status, the court affirmed the Commissioner's authority to do so. The Appellate Assistant Commissioner had the power to determine the correct status of the assessee for taxation purposes. The court upheld the decision of the Appellate Assistant Commissioner in this regard.

In conclusion, the court answered all questions in favor of the revenue department, confirming that the sole male surviving coparcener, along with his widowed mother and sisters, constituted a Hindu undivided family under the Income-tax Act. The assessment of income in the hands of the HUF was deemed correct, and the Appellate Assistant Commissioner was authorized to correct the status. The assessee was directed to pay the costs of the revenue.