1976 (4) TMI 3 - SC - Wealth-tax

A divided member of HUF married a Christian lady - a son was born - Whether father and son form a Hindu undivided family - Legitimate children of a Hindu father by a Christian mother who are brought up as Hindus would be governed by Hindu law - discretion vested in a Hindu assessee to treat his properties is joint family properties by taking into his fold his Hindu sons so as to constitute, joint family properties

Summary

Issues Involved:

1. Status of Sridharan and his son as a Hindu Undivided Family (HUF) for tax purposes.
2. Applicability of Hindu law to the son born out of a marriage under the Special Marriage Act, 1954.
3. Interpretation of Section 21 of the Special Marriage Act, 1954.
4. Definition and scope of the term "Hindu" in the context of personal law.

Issue-wise Detailed Analysis:

1. Status of Sridharan and His Son as a Hindu Undivided Family (HUF) for Tax Purposes:

The primary question was whether Sridharan and his son, Nicolas Sundaram, constituted a Hindu Undivided Family (HUF) for assessment under the Income-tax, Wealth-tax, and Expenditure-tax Acts. The High Court, following the decision in *Gowli Buddanna v. Commissioner of Income-tax*, affirmed that Sridharan's claim to be assessed as an HUF was valid. The Supreme Court upheld this view, noting that the property obtained by Sridharan on partition could become ancestral property for his descendants under Mitakshara law.

2. Applicability of Hindu Law to the Son Born Out of a Marriage Under the Special Marriage Act, 1954:

The Supreme Court examined whether Nicolas Sundaram, born to Sridharan and Rosa Maria Steinbchler (a Christian), could be considered a Hindu governed by Hindu law. The Court emphasized that Hinduism's diverse beliefs and practices make it difficult to define precisely. The Court concluded that since Sridharan did not renounce Hinduism and Nicolas was brought up as a Hindu, he could be governed by Hindu law, thus forming an HUF with his father.

3. Interpretation of Section 21 of the Special Marriage Act, 1954:

Section 21 of the Special Marriage Act, 1954, stipulates that succession to the property of a person whose marriage is solemnized under the Act shall be governed by the Indian Succession Act, 1925. The revenue argued that this section precluded Nicolas from being part of an HUF. However, the Supreme Court clarified that Section 21 only provides a statutory right of succession and does not affect the joint family structure or the discretion of a Hindu assessee to treat his properties as joint family properties.

4. Definition and Scope of the Term "Hindu" in the Context of Personal Law:

The Court discussed the broad and inclusive nature of Hinduism, citing various definitions and interpretations from legal texts and scholarly works. It noted that Hindu law applies to a wide range of individuals, including those born to Hindu parents, converts to Hinduism, and children brought up as Hindus. The Court referenced Mulla's Principles of Hindu Law and other cases to support its conclusion that Nicolas, being brought up as a Hindu, could be considered a Hindu under personal law.

Conclusion:

The Supreme Court upheld the High Court's decision, affirming that Sridharan and his son constituted an HUF for tax purposes. The appeals were dismissed with costs, and the Court reiterated that Section 21 of the Special Marriage Act does not impair the joint family structure or the application of Hindu law to Nicolas Sundaram.