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Issues:
- Assessment on Hindu undivided families post the Kerala Joint Hindu Family System (Abolition) Act, 1975. Analysis: The Supreme Court addressed the issue of whether the Income-tax Department can assess respondents as Hindu undivided families after the enactment of the Kerala Joint Hindu Family System (Abolition) Act, 1975. The Act abolished the joint family system among Hindus in Kerala from December 1, 1976. The Kerala High Court consistently held that post the Act, assessments on Hindu undivided families are impermissible. The Court referred to a judgment under the Wealth-tax Act stating that assessments on Hindu undivided families post the Act are invalid due to the statutory extinction of joint families. The Act deems coparcenary property holders as tenants-in-common, eliminating the existence of Hindu undivided families. The Court emphasized that no proceedings can be valid for assessing non-existing families post the Act. The Court further discussed the relationship between section 20 of the Wealth-tax Act and the Kerala Act. It was concluded that section 20 cannot be applied to treat Hindu undivided families as existing for assessment purposes post the Act. Several judgments by Division Benches and a single judge supported this view, except for one dissenting judgment. The dissenting judgment opined that the Kerala Act only disrupts the family status and does not prevent assessments until a specific finding is made as per section 20 of the Wealth-tax Act. Acknowledging the possibility of differing views, the Supreme Court upheld the consistent line of authority by the Kerala High Court since 1981, except for the one dissenting judgment. The Court highlighted that since the Act is a State enactment, consistency in interpretation is crucial. Consequently, the appeals were dismissed without costs.
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