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TMI Blog1966 (8) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... es article 14 of the Constitution of India. His second objection was that that provision was not attracted to the present case. These objections were overruled by the Income-tax Appellate Tribunal, Patna Bench ; and on the request of the assessee, the following questions have been referred by the Tribunal to this court. "(1) Whether the provisions of section 16(3)(a)(iii) of the Indian Income-tax Act, 1922, are ultra vires the Constitution of India ? (2) Whether, in the facts and circumstances, of the case, the Tribunal was justified in holding that the provisions of section 16(3)(a)(iii) applied to the income arising from a property transferred by the holder of an impartible estate to his wife for her maintenance ?" In regard to the assessment years 1959-60 and 1960-61, the net annual value of the residental houses of the assessee at ten per cent. of the total income of the assessee under the first proviso to sub-section (2) of section 9 was challenged on the ground that the total income of the assessee to be considered in that respect should not have included the income from the two house properties transferred to his wife by way of the supplementary maintenance grant. As t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are made not for adequate conderation or are not in connection with an agreement to live apart, are brought under this deeming provision. Though the language employed in sub-section (3) of section 16 is in directive form giving the manner of computation, the provision is, in fact and in effect, a deeming provision. The charging section 3 of the Indian Income-tax Act, 1922, is in respect of the total income of a previous year of every individual, where an individual is the assessee. The income of the wife from the assets transferred to her by her husband is taken to be the income of the husband, the individual assessee, under the deeming provision laid under section 16(3) and, in that view, becomes assessable in the hands of the husband. In the instant case, the assessee is an individual. He is the holder of an impartible estate. Incidents of impartible estate are well defined and settled by custom and by judicial precedents. The holder has uncontrolled powers of enjoyment and disposal over the impartible estate and income arising therefrom ; but all the same, the estate belongs to the Hindu joint family of which the holder, at a particular time, is a member. According to the cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Baijnath Prasad Singh v. Tej Bali Singh, it has been settled law that property though impartible may be the ancestral property of a joint family and that in such cases the successor falls to be designated according to the ordinary rule of the Mitakshara. The concluding words of the judgment delivered on behalf of the Board by Lord Dunedin in Baijnath Prasad Singh v. Tej Bali Singh are to that effect, and in that case as well as in Shiba Prasad Singh v. Rani Prayag Kumari Debi at page 345, which followed it, 'the keynote of the position' is---not that property which is not joint property devolves by virtue of custom as though it had been joint---but that the general law regulates all beyond the custom, that the custom of impartibility does not touch the succession since the right of survivorship is not inconsistent with the custom ; hence the estate retains its character of joint family property and devolves by the general law upon that person who being in fact and in law joint in respect of the estate is also the senior member in the senior line. The birth-right of the senior member to take by survivorship still remains. Nor is this right a mere spes successionis similar to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee, we need not pursue or examine it here. Learned counsel for the revenue contended that to construe the proper meaning of section 16(3)(a)(iii), it is not necessary to assume that the transferor-husband must be the owner of the assets before they are transferred to his wife. The mere fact that the transferor happens to be the husband and the transferee, the wife, would be sufficient to attract that provision. Sub-section (3) opens with the words : "In computing the total income of any individual for the purpose of assessment, there shall be included . . ." The income of an individual necessarily means the income belonging to and owned by an individual. Although the income of a wife or a minor child does not belong to that individual assessee, it is to be included in his total income under the provisions of sub-section (3). When the income from the assets transferred to the wife is sought to come within that inclusion, it would necessarily mean that the transferor-husband was himself the owner of the assets before they were transferred. In other words, the income of such assets, which would have been assessed as the income of that individual before the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is a joint ownership, which is a restraint upon alienation. It is not so difficult where the holder of the estate has no son, and it is necessary to decide who is to succeed. It would appear that this statement was in the context of the question of alienation by the holder unconcerned with the other members of the joint family. "Joint ownership" was used, as it appears to me, in the sense of a restraint upon alienation of the estate. What was specifically decided in regard to the ownership of the impartible estate in Baijnath's case and reiterated in the case of Commissioner of Income-tax v. Dewan Bahadur Dewan Krishna Kishore, as already referred to, was not gone into in this case, which was decided in 1888. Another case relied upon by the revenue was Shiba Prasad Singh v. Rani Prayag Kumari Debi, where it was observed that an impartible estate belongs to the joint family for a limited purpose and though it is ancestral, it is clothed with the incidents of self-acquired property. This decision does not dispute that the joint family is the owner of the impartible estate. The incidents of custom related thereto override some of the features of joint family estate ; but that d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r purpose behind the legislation under consideration may be, since it is a taxing statute, it has to be construed strictly ; and the citizen's liability thereunder cannot be extended, if he does not come within the scope of the legal provision. Where there is a room for any doubt, the benefit must go to the subject. The present law (Income-tax Act, 1961) has brought about a different position. Sections 22 to 27 deal with income from house property. In section 27(ii) it is provided that, for the purposes of sections 22 to 26, the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate. Under section 27(i), an individual, who transfers otherwise than for adequate consideration any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, is to be deemed to be the owner of the house property so transferred. An owner of a house property is liable to assessment (section 22). The above two provisions of section 27 taken together bring the husband-transferor of house property comprised in an impartible estate to the wife under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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