1967 (3) TMI 38 - HC - Income Tax

Whether petitioner was entitled to be assessed as a HUF - held, yes - fact that the assessees were being assessed as individuals up to the asst. yr. 1963-64, would not make any difference in so far as their present claim to be assessed as a HUF is concerned

Issues Involved:
1. Maintainability of the writ petitions under Article 226 of the Constitution of India.
2. Determination of the status of the petitioners for assessment purposes under the Income-tax Act and the Wealth-tax Act.
3. Interpretation of the settlement deed and whether it constituted a partition or a series of individual gifts.
4. The effect of the declarations made by the petitioners and their father on the character of the properties.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petitions:
The first submission by the learned Advocate-General was that the order passed by the Commissioner in the exercise of his revisional jurisdiction under the relevant taxing statute was a quasi-judicial order and was amenable to the jurisdiction of the court under Article 226 of the Constitution of India. The Supreme Court's decision in Dwarka Nath v. Income-tax Officer was cited, where it was held that the Commissioner exercising revisional jurisdiction under section 33A(2) of the Income-tax Act does not function in an administrative capacity, and a writ of certiorari is maintainable to quash his orders. The court concluded that the writ petitions were maintainable and the reliefs sought could be granted under Article 226.

2. Determination of the Status of the Petitioners for Assessment Purposes:
The primary issue was whether the petitioners should be assessed as individuals or as members of a Hindu undivided family (HUF) for the assessment year 1963-64. The petitioners contended that by virtue of a settlement deed executed on March 30, 1952, the properties allotted to them should be treated as joint family properties, and they should be assessed as a Hindu undivided family. The Income-tax Officer and the Wealth-tax Officer had rejected this contention, and the Commissioner affirmed these orders in revision.

3. Interpretation of the Settlement Deed:
The court examined the settlement deed to determine whether it constituted a partition of the self-acquired properties of the father or a series of individual gifts. The Commissioner had relied on the use of the words "him" and "absolutely" in the deed to conclude that the properties were allotted to the assessee as his absolute property. However, the court noted that the settlement deed contained recitals indicating a division in status and estate among the family members, suggesting an intention to treat the properties as joint family properties. The court referenced the decision in Kisansing Mohansing Balwar v. Vishnu Balkrishna Jogalekar, which held that a division of self-acquired property by a Hindu father could imply an intention to treat the property as joint family property.

4. Effect of the Declarations:
The petitioners had produced declarations by their father and themselves stating that the properties were intended to be enjoyed as joint family properties. The Commissioner did not take these declarations at face value, but the court held that such declarations, though made long after the execution of the settlement deed, could not modify the operation of the deed's terms. The court emphasized that the intention of the father, as evidenced by the recitals in the settlement deed, was to effect a partition of the self-acquired properties, thereby impressing them with the characteristics of joint family properties.

Conclusion:
The court concluded that the settlement deed was an instrument of partition and that the properties received by the sons were joint family properties in which their male issue would acquire a right by birth. The orders of the assessing authorities and the Commissioner, which treated the petitioners as individuals, were quashed. The court directed the assessing authorities to assess the petitioners in the status of a Hindu undivided family. The writ petitions were allowed, and no order as to costs was made.

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