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TMI Blog1961 (4) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment when the original assessment was made. He, therefore, issued a notice under section 34 of the Income-tax Act which was addressed to the Hindu undivided family Shridhar Udai Narayan. The notice was served on 6th of February, 1948, on the eldest male member of the family Udai Narayan Trivedi who according to the Tribunal's statement of the case had become the karta of the family by that time. Udai Narayan had been born on 5th of July, 1930, so that on the date of service of the notice he was about 17 years and 7 months old. He had, therefore, not attained majority under the Indian Majority Act. In response to the notice served on him, Udai Narayan filed a return on 10th March, 1948, showing an income of ₹ 19,713 and in that return described himself as the karta of the assessee family. The Income-tax Officer did not accept the income shown in the return and computed the total income of the assessee at ₹ 47,745 and assessed the tax on that basis by his order dated 30th March, 1948. The assessee went up in appeal against that order to the Appellate Assistant Commissioner mainly on the ground that the notice which was served on Udai Narayan on 6th of February, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Narayan was not a valid return as he was not a major and was not the karta of the assessee family. The Tribunal further held that on that date Udai Narayan could not validly represent the assessee family. On these findings, the Tribunal quashed the tax which had been imposed on the assessee family on the basis of the notice issued under section 34 of the Income-tax Act. Thereupon, the Commissioner of Income-tax moved the Appellate Tribunal under section 66(1) and the Tribunal has referred the following two further questions for our opinion which are the subject-matter of Miscellaneous Case No. 332 of 1953. These questions for convenience may be numbered as questions Nos. 2 and 3 while the question referred in Miscellaneous Case No. 38 of 1952 may be conveniently numbered as the first question. The two questions are: (2) Whether on the facts and in the circumstances of this case the return filed by Udai Narayan who was a minor at the time of filing it as karta of the assessee Hindu undivided family was legal and valid? (3) Whether on the facts and in the circumstances of the case the said Udai Narayan could validly represent the assessee Hindu undivided family during the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember of the family need not be construed with reference to the provisions of the Indian Majority Act of 1875. The Indian Majority Act had been passed almost solely with the purpose of declaring when a citizen of India was to attain majority and if there had been the intention of the legislature that in the case of a Hindu undivided family the notice must be served only on a member of the family who had attained majority care would have been taken to use language which would have clarified that position. Instead, the legislature used the word adult and the consequently in interpreting the meaning of the word adult we should not make a reference to the provisions of the Indian Majority Act. Adult in the dictionary has been defined as connoting a person who has attained the age of discretion. The Tribunal in the present case has held that in India the age of discretion is normally considered to be 16 years in the case of a male person. This view was held by the Tribunal on the basis of the opinion expressed by the Calcutta High Court in Hari Charan Singh v. Chandra Kumar Dey [1908] I.L.R. 35 Cal. 286. and on the basis of the view expressed by this court in In re, De Sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Udai Narayan purporting to act as karta of the assessee family. It would at first appearance seem to be necessary that in order to answer this question we would have to decide whether Udai Narayan was or was not competent to act as karta of the assessee family, but it seems to us that in the circumstances of this case we need not go into this aspect of this question of law. As we have indicated earlier, the question whether Udai Narayan, who had not attained the age of majority under the Indian Majority Act, 1875, could or could not legally function as the karta of the Hindu undivided family may have to be determined by interpreting the language of the provisions contained in the Indian Majority Act, but in proceedings under the Income-tax Act where a return has been filed, the return may still be legal and valid even though it may not have been filed by the person entitled in law to function as the karta of the Hindu undivided family. It seems to us that the case before us is of such a nature that in this case the return filed by Udai Narayan should be held to be legal and valid, even if we were to accept the proposition that he was not entitled in law in function as the karta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdian would not have become entitled to receive the income on behalf of the family automatically. In fact, the situation on that date was such that, even if proceedings had been taken to have a guardian appointed, very likely before an order of appointment could have been made Udai Narayan would have attained majority and the result would have been that no guardian could have been appointed. On attaining majority, there could be no doubt that Udai Narayan would have become the karta of the assessee family. It seems to us in these circumstances that section 40 of the Income-tax Act has been enacted to make provision for those cases only where in fact a guardian of a minor or a set of minors constituting a Hindu undivided family is in existence. Where there is no guardian section 40 of the Income-tax Act would not apply. Similarly section 41 of the Income-tax Act would also only apply where the superintendence of the property of the minor or minors constituting a Hindu undivided family has been taken over by the court of wards or the administrator-general, the official trustee or any receiver or manager appointed by or under order of any court. The case before us will not be governed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be possible is that in such cases the income must be assessed and the tax released from the person who may be in the actual receipt, control and management of that income, even though he may not have attained the age of majority. In the case of an individual minor, who may be in receipt of salary, in such circumstances, the tax could be assessed by taking proceedings direct against that individual even though he might not have attained majority. This it appears was made permissible by the Act on the principle that a person, who is capable of earning an income and of controlling and managing it, should be capable of making returns and dealing with proceedings under the Income-tax Act in respect of the income and, consequently, even if he has not attained majority, the income should be taxed directly in his hands in case he is in receipt of and controls and manages that income. In the case of a Hindu undivided family constituted of male members none of who has attained majority, similarly, the law should be interpreted as enabling the taxing authorities to tax the income of the Hindu undivided family in the hands of the person who is in receipt of and is actually controlling and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be treated as capable of doing what is required under the Income-tax Act. These principles were laid down by the Court of Appeal in England on interpretation of the provisions of the income-tax law which was in force in England and, though those provisions are not identical with the provisions of the Indian Income-tax Act, it does appear to us that the two income- tax laws at least in this respect are very similar and the principle laid down in England would be for this reason applicable in India also. In England, income of every person was made chargeable while the income of every individual has been made chargeable in India, and the question of charging the income of a minor directly in his hands would, therefore, arise in England on determination of the question whether he is covered by the word person and in India whether he is covered by the word individual and it seems to us that the difference in the two words individual and person is not such as to make any difference in the view to be taken in interpreting these words. In England also, there were provisions for charging the income of a minor in the hands of a guardian and there the criterion laid down was that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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