1976 (7) TMI 42 - HC - Income Tax

Summary

Issues:
1. Inclusion of minor children's income in mother's total income under section 64 of the Income-tax Act, 1961.
2. Interpretation of the term "individual" in section 64 of the Income-tax Act, 1961.

Analysis:

Issue 1: Inclusion of minor children's income in mother's total income under section 64 of the Income-tax Act, 1961:
The case involved the question of whether the shares of income of minor children admitted to the benefits of a partnership should be included in the total income of the mother under section 64 of the Income-tax Act, 1961. The partnership in question was formed between the widow of the deceased and the major daughter, with the minor children admitted to its benefits. The assessing authorities and the Tribunal held that the income of the minors should be included in the mother's income. The Tribunal also set aside protective assessments made against the minors themselves. The key issue was the correctness of including the minors' income in the mother's total income under section 64.

Issue 2: Interpretation of the term "individual" in section 64 of the Income-tax Act, 1961:
The interpretation of the term "individual" in section 64 was crucial in determining whether the provision applied to both males and females or only to males. The Supreme Court's decision in Commissioner of Income-tax v. Sodra Devi clarified that in the context of the Indian Income-tax Act, 1922, "individual" referred only to males. However, the structure and language of section 64 of the Income-tax Act, 1961, differed significantly. The opening part of section 64 did not specify the sex of the individual, allowing for a neutral interpretation. The argument that section 64 applied only when both spouses were alive was rejected, as the provision did not limit its application based on the marital status of the individual. The judgment in Smt. Priti Lata Samanta v. Commissioner of Income-tax supported this interpretation, emphasizing the neutral application of section 64 to both widows and widowers. Consequently, the court affirmed that the income of the minor children could be included in the mother's total income under section 64.

In conclusion, the court upheld the inclusion of the minor children's income in the mother's total income under section 64 of the Income-tax Act, 1961, based on the interpretation of the term "individual" and the neutral application of the provision to both males and females. The judgment clarified the application of section 64 in cases involving partnerships and the admission of minors to partnership benefits.