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TMI Blog2013 (7) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... t, in the income of the parents - Following decision of K. V. Kuppa Raju And Others Versus Government Of India And Others [1999 (9) TMI 47 - KARNATAKA High Court] - Decided against Assessee. Natural guardian - Whether income of minor should only be included in income of father to achieve object of Section 6 of Hindu Minority and Guardianship Act - Held that:- The expression natural guardian has been defined in Section 4(c) as noticed above to mean any of the guardians as mentioned in section 6 of the Act of 1956. This section refers to three classes of guardians viz., father, mother and in the case of a married girl the husband. The father and mother therefore, are natural guardians in terms of the provisions of Section 6 read with Section 4(c) - Under the Hindu Law both mother and father are the natural guardians of the minor sons or daughters. It cannot be said that the mother is not the natural guardian during the lifetime of the father or until he is disqualified from being the natural guardian - Following decision of Ms. Githa Hariharan & Anr. Versus Reserve Bank of India & Anr. [1999 (2) TMI 64 - SUPREME Court] - Decided against Assessee. When both mother and father are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 of 2005 are pending in this Court. However, she was advised to contest the validity of the provisions of Section 64 (1A) of the Act which provides for inclusion of income of the minor child in the total income of the parents whose total income is greater. Prior to the Assessment Year 1992-93, as per the provisions of Section 64(1)(v) of the Act, any income of the minor child, arising from the assets transferred directly or indirectly by the parents was to be clubbed in the hands of the parent who had made such direct or indirect transfer. Clause (v) of Section 64(1) of the Act reads as under:- subject to the provisions of Clause (i) of Section 27, in a case not falling under Clause (iii) of this sub-section, to a minor child of such individual, from assets transferred directly or indirectly to the minor child by such individual otherwise than for adequate consideration. Vide Finance Act, 1992, this Clause was omitted w.e.f. 1.4.1993. After deleting the aforesaid Clause, sub-section (1A) was introduced in Section 64 of the Act w.e.f. 1.4.1993, which reads as under:- (1A) In computing the total income of any individual, there shall be included all such income as aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r earned in his/her own right or not, are clubbed with the income of the father or mother, whose income is greater. It is the case of the petitioner that the provisions of clubbing the income of the minor child, which is earned by the said minor in his or her own right, in the income of the parents infringes the Right of Equality as enshrined by Article 14 of the Constitution of India and, thus, ultra vires. According to the learned counsel, the parent who pays tax on the income of the minor, is also in certain cases, charged at a higher rate on his own income due to the said clubbing, cannot recover the same from the said minor. It is further the case of the petitioner that Clause (a) of Explanation to Section 64(1A) which provides that for the purposes of this sub-section, the income of the minor child shall be included where the marriage of his parents subsists, in the income of that parent whose total income is greater, is violative of Section 6 of the Hindu Minority and Guardianship Act, 1956, according to which, the father is the natural guardian and after him the mother is the natural guardian. The learned counsel argued that the purpose of bringing the amendment was to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to avoid such evasion the clubbing of income earned by a minor through a particular source with the income of the father cannot be said to fall outside the legislative power to enact a law on income-tax. The main object behind the enactment of section 64(1A) is that all the income of a minor should be clubbed with the income of the parent (except that which has been excluded specifically), since for all practical purposes, the parent treats and uses the minor's income as part of his or her own income. If Section 64(1A) is at least partially an anti-avoidance measure, it would fall under entry 82 of List I of Schedule VII of the Constitution itself. If it is not an anti-avoidance measure, even then, Parliament will be entitled to enact such a provision in view of Article 248 and entry 97 of List I. xxx xxx xxx xxx xxx xxx xxx What is necessary in order to pass the test of permissible classification under Article 14 is that the classification must not be arbitrary, artificial or evasive but must be based on some real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved by the Legislature. There is no palpable arbitrariness i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, he or she has been subjected to a higher tax burden, it cannot be considered to be unconstitutional. There is no hostile discrimination between those minors whose income is not included in the income of their parent as they may not be assessable at all or may be assessable at a lower rate of tax as the individuals whose minor children have income have been considered a different class by themselves. If the Legislature has selected for the purpose of classification a group of persons who are in fact used as a cloak to perpetrate fraud on taxation the provisions cannot be considered to be violative of article 14 of the Constitution of India. In view of the aforesaid decisions, learned counsel for the petitioner has not pressed Point No.1 and could not point out any illegality to the provisions of clubbing the income of the minor child, earned by him in his own right, in the income of the parents, but the learned counsel questioned that such income can only be clubbed in the income of the father, who is the natural guardian of the minor child under Section 6 of the Hindu Minority and Guardianship Act. According to the learned counsel, the adding of such income in the income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore shall have to be read and interpreted in a manner so as not to defeat the true intent of the legislature. 24. Be it noted further, that gender equality is one of the basic principles of our Constitution and in the event the word Rs.after' is to be read to mean a disqualification of a mother to act as a guardian during the lifetime of the father, the same would definitely run counter to the basic requirement of the constitutional mandate and would lead to a differentiation between male and female. Normal rules of interpretation shall have to bow down to the requirement of the Constitution since the Constitution is supreme and the statute shall have to be in accordance therewith and not de hors the same. The father by reason of a dominant personality cannot be ascribed to have a preferential right over the mother in the matter of guardianship since both fall within the same category and in that view of the matter the word Rs.after' shall have to be interpreted in terms of the constitutional safe-guard and guarantee so as to give a proper and effective meaning to the words used. 25. In our opinion the word Rs.after' shall have to be given a meaning which would sub-serve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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