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TMI Blog2018 (10) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... , applied by the Supreme Court in several judgments, the only conclusion that could be drawn therefore, was that though succession to the gaddi was through lineal primogeniture at a time when the monarchy was absolute – which meant that such practice overlaid the right of other members to claim a share in the HUF, upon accession of the princely state of Jaipur, only those properties and privileges which the late Sawai Man Singh retained to himself, were saved. No custom of law, of the kind visualized by Section 5 of the Hindu Succession Act, in relation to lineal primogeniture or impartible properties in relation to these assets were saved. All else became subject to laws of the country. Thus, the late Maharaja had to and did file tax returns, declaring his wealth and income, in accordance with the laws of the land. He was governed by the ordinary rules of inheritance applicable to members of HUF. From the materials on record, in these appeals, there is nothing to suggest that the succession to the estate of the ruler-or his family (other than succession to the gaddi) was governed by the principle of primogeniture. In these circumstances, the law on the subject is clear: sans ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ITR 137-39/1983, ITR 271/1983, ITR 221/1984, ITR 397/1983, ITR 438/1983, ITR 170-71/1985, ITR 221-24/1985 ITR 18/2000. Sh. Prateesh Kumar and Ms. Meera Mathur, Advocates, for assessee, in ITA 152/2001, ITA 218/2002, ITA 679/2004, ITA 163/2005, ITA 750/2007, ITA 751/2007, ITA 752/2007, ITA763/2007, ITR 78/1981, ITR 297-98/1981, ITR 9/1982, ITR 4647/1982, ITR 95-98/1983, ITR 137-39/1983, ITR 271/1983, ITR 221/1984, ITR 397/1983, ITR 438/1983, ITR 170-71/1985, ITR 221-24/1985 ITR 18/2000, GTR 2/981, WTA 2/1999, WTR 328-34/1984, WTR 300/1987, WTR 40-42/1987, WTR 10608/1990, WTR 3/1992 ,WTR 4/1992 ,WTR 24/1995,WTR 2832/1995,WTR4/1997, ITR297/1981, ITR46/1982, ITR 95/1983, ITR 151/1983, ITR 283/1985, ITR 185-88/1989 WTR 40/1987. Sh. Manish Kumar, Sh. Yudhister Singh, Sh. Piyush Kaushik and Sh. Y. Sarat Chandra, Advocates, for applicant, in GTR 2/981. Sh. D.D. Singh and Ms. Seerat Deep Singh, Advocates, for Respondent Nos. 8, 10, 15, 21, 23 and 52, in ITA 152/2001, ITA 218/2002, ITA 679/2004, ITA 163/2005, ITA 750/2007, ITA 751/2007, ITA 752/2007, ITA 63/2007, ITR 78/1981, ITR 297-98/1981, ITR 9/1982, ITR 46-47/1982, ITR 95-98/1983, ITR 13739/1983, ITR 151-53/1983, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties and private properties. Till assessment year (A.Y.) 1969-70, the late Sawai Man Singh filed his returns of income in the status of an individual. For the A.Y. 197071, a return of income was filed on 30-4-1970 in the status of an individual. Sawai Man Singh died on 24-6-1970. 4. The return filed by late Sawai Man Singh before his death was not available. A duplicate of that return was filed on 26-03-1970 declaring the status of an individual. A return dated 12-02-1971 was later filed (received in the AO s office on 19-02-1971). This was called as a revised return; it was signed by the late Sawai Man Singh s legal heir declaring the return to have been in the status of a HUF. The AO, keeping in view the ancestral history of the late Sawai Man Singh and that he was earlier the ruler of Jaipur State, the quality of the property and the manner of its treatment by him, held the return to be filed by the late assessee, as an individual. In so holding, the AO took note of the history of the case, the ascension to the gaddi, the status of late Sawai Man Singh as ruler, lapse of paramountcy in 1947, merger (of the state of Jaipur) in 1949, and the covenants of the same year. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which arises for determination is whether the Maharaja of Jaipur was a holder of the impartible estate. The history of Jaipur lies deep in the hearty past which may be called medieval and it cannot be said that it was an impartible estate as understood in law. The rulers of Jaipur were absolute rulers, monarchs and, if we may call them, kings who made all laws, who were the fountains of all laws and administered them in the manner they wanted. Up to 1947, when India attained independence, no Indian law was applicable to the ruler including the Indian Penal Code and the tax laws. He administered the State as an absolute overland and the King was undisturbed by any laws of the British India, if we may call it so, before 1947. That being the position, though of course the characteristic of the impartible estate of being the absolute holder was there in case of the ruler, but the fact that he was not amenable to any Indian laws being the absolute owner lends different colour to the estate of the ruler. It was not an impartible estate but a kingdom. Therefore, during days of his rulership, he being the King, no law including the personal law was applicable to him. But with the lap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, etc., even after the merger, that may be a conduct which may appear to go against the assessee to some extent but on a deeper thought it is not so. It is well settled that the karta of a HUF has a limited right of disposition of HUF property. If we were to look into the claim in terms of money in respect of the immovable properties disposed of by the ruler, the figure appear to be substantial. That may be so if the properties of an ordinary HUF are taken as the touch stone. But if the huge dimension of the properties of the Jaipur State are taken to be account (the value of the properties running into crores and crores) the disposition so made by the ruler are reduced to an insignificant figure. We, therefore, hold that the disposition made by the ruler of Jaipur did not detract anything from the claim of the status of a HUF. 25. At this stage it would be fruitful to refer to the proposition of the revenue detailed above. The revenue had fairly conceded that after the death of the ruler the status was to be taken as that of a HUF. But the other proposition propounded by the revenue cannot be accepted because neither the assessee was the holder of an impartible estate nor th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overned the law of succession among Hindus after its enactment. Counsel stated that the preamble to the Hindu Succession Act, 1956, showed that Parliamentary intention was that the Act was only to govern succession. It had prospective effect, its object was not to affect existing rights of holders of property living on the date of which the Act came into force, namely, 16-6-1956. No interpretation of the Act should be given having the effect of affecting existing rights since such an interpretation would result in the provisions of the Act contravening provisions of the Constitution of India. 11. Mr. Anand argued that right from 1922 after Sawai Man Singh s ascension to the gaddi till Rajasthan s merger into the Union of India, he was an independent sovereign of the native State of Jaipur with unquestioned authority of disposition of state and specified personal properties, which were stamped with the attribute of impartibility. Nothing in the history of the rulers of Jaipur revealed that any other member of the family of the ruler ever claimed share in the properties, on the ground of being member of a joint or Hindu Undivided Family. Clearly, the late assessee and his family m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties or communities are governed by primogeniture. In Anant Bhikappa Patil, the Privy Council held that: 14. Now an impartible estate is not held in coparcenary, ( Rani Sartaj Kuari v. Rani Deoraj Kuari (1888) L.R. 15 I.A. 51), though it may be joint family property. It may devolve as joint family property or as separate property of the last male owner. In the former case it goes by survivorship to that individual, among those' male members who in fact and in law are undivided in respect of the estate, who is singled out by the special custom, e.g. lineal male primogeniture. In the latter case jointness and survivorship are not as such in point; the estate devolves by inheritance from the last male owner in the order, prescribed by the special custom or according to the ordinary law of inheritance as modified by the custom. The zemindari property claimed in Amarendra's case was adjudged to belong to the adopted son on this last mentioned principle-that is, as heir of the last male owner. 14. It was also argued that it is well settled that property though impartible may be the ancestral property of the HUF. The impartibility of the estate does not ipso facto dest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of income-tax the Hindu undivided family is treated as a separate unit of assessment, it does not follow that in the eye of Hindu law the property of the Hindu undivided family belongs to its as a corporate unit with a separate legal personality as distinct from the individual family members composing it. In the present case, the Raja of Bhor and his two brothers constituted a Mitakshara coparcenary and it is well-established that the essence of a coparcenary under the Mitakshara law is unity of ownership. The ownership of the coparcenary property is in the whole body of coparceners. As observed by the Judicial Committee in Katama Natchiar v. Rajah of Shivagunga : There is community of interest and unity of possession between all the members of the family, and upon the death of any one of them the other may well take by survivorship that in which they had during the deceased's lifetime a common interest and a common possession . 7. But it is also true that no individual members of a Hindu coparcenary, while it remains undivided, can predicate of the joint and undivided property, that he, that particular members, has a definite share, one- third or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x returns he filed under the Act and the old Indian Income Tax Act, 1922, were shown to be in his individual capacity. The returns for the accounting year in which his death occurred, however, showed that he was karta of the HUF. 19. The revenue seems to assert that since Sawai Man Singh was a ruler and succession to the gaddi was by application of the rule of primogeniture and given that during his life time, the late ruler had consistently filed his income and wealth tax returns claiming individual rather than joint family status, the estate was impartible; consequently, it was governed by lineal primogeniture; the impartibility characteristic did not change or alter upon his death. 20. The earliest decision cited at the Bar was the Privy Council ruling in Shiba Prasad Singh vs. Rani Prayag Kumari Debi Ors. AIR 1932 PC 216 where it was held as follows: Impartibility is essentially a creature of custom. In the case of ordinary joint family property, the members of the family have : (1) the right of partition: (2) the right to restrain alienations by the head of the family except for necessity, (3) the right of maintenance; and (4) the right of survivorship. The fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livered 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 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 succession is similar to that of a reversioner succeeding on the death of a Hindu widow to her husbands estate. It is a right which is capable of being renounced and surrendered. The later cases are to the same effect. Though the co-ownership of the junior member may be in a sense only, carrying no present right to joi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent decisions of the Privy Council and of this Court : Collector of Gorakhpur v. Ram Sundar Mai and Ors. I.L.R. (1934) 61 I. A. 286. Commissioner of Income Tax, Punjab, v. Krishna Kishore L.R. (1941) 68 I.A 155 Anant Bhikappa Patil v. Shankar Ramchandra Patil L.R. 1942 70 I.A 232 Chinnathavi Alias Veeralakshmi v. Kutasekara Pandiya Naicker and Anr. [1952] 1 SCR2 41. Mirza Raja Shri Pushavathi Viziaram Gajapathi Raj Manne Sultan Bahadur and Ors. v. Shri Pushavathi Viseswar Gajapathi Raj and Ors. [1964] 2 SCR 403 Rajah Velugoti Kumara Krishna Yachendra Varu and Ors. v. Rajah Velugoti Sarvagna Kumara Krishna Yachendra Varu and Ors. [1970]3SCR88 and Bhaiya Ramanuj Pratap Deo v. Lalu Maheshanuj Pratap Deo and Ors. [1982]1 SCR 417. 21. In Collector of Gorakhpur v. Raw Sundar Mai's case, supra, it was observed that though the decision of the Board in Sartaj Kuari's case and the First Pittapur's case appeared to be destructive of the doctrine that an impartible zamindari could be in any sense joint family property, this view apparently implied in these cases was definitely negatived by Lord Dunedin when delivering the judgment of the Board in Baijnath Prasad Singh' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Ramanuj Pratap Deo's case , supra, the principles laid down by the Privy Council in Shiba Prasad Singh's case were reiterated. 23. In the course of argument, great reliance was placed on the two decisions of this Court in Mirza Raja Ganapath Vs case, supra and Raja Velugoti Kumara Krishna's case, supra, for the proposition that the junior members of a joint family in the case of an ancient impartible joint family estate take no right in the property by birth and therefore have no right, of partition having regard to the very character of the estate that it is impartible. To our mind, the contention cannot be accepted. Both the decisions in Mirza Raja Ganapathi's case, supra, and Raja Velugoti Kumara Krishna's case, supra, turned on the provision of the Madras Estates (Abolition Conversion into Ryotwari) Act, 1948 and the Madras Impartible Estates Act, 1904. There are express provisions made in Sections 45 to 47 of the Abolition Act for the apportionment of compensation to the junior members of zamindari estates and subs (2) of Section 45 thereof provides for payment of the capitalised value of the compensation amount to them on the basis of extinction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g character of the properties in the B Schedule and making them partible. It was said that the junior members had a present right in the impartible estate and were entitled to share in the properties once it lost its character of impartibility. The Court had to consider the effect of the Abolition Apt on the rights and obligations of the members of the family and held that the Abolition Act has no application to properties which are outside the territorial limit of the Venkatgiri Estate. The claim that failed was in relation to properties which did not form part of a 'zamindari estate' within the meaning of Section 1(16) and therefore did not come within the purview of Section 3 of the Abolition Act but continued to be governed by the Madras Impartible Estates Act, 1904. 23. Again, the same principles were approved and applied in Anant Kibe and Ors. vs. Purushottam Rao and Ors.1984 (Supp) SCC 175 where the court held that: The incidents of impartible estate laid down in Shiba Prasad Singh's case and the law there stated have been reaffirmed in the subsequent decisions of the Privy Council and of this Court Then, after quoting Nagesh Bisto Desai (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elatable to the process of succession but relates to the legal incidents of sovereignty. 42. If some-one asserts that to a particular property held by a sovereign the legal incidents of sovereignty do not apply, it will have to be pleaded and established by him that the said property was held by the sovereign not as a sovereign but in some other capacity. In the instant case apart from asserting that the properties in suit belonged to a joint family and Respondent No. 1 even though a sovereign ruler, held them as the head of the family to which the property belonged, the appellant has neither specifically pleaded nor produced any convincing evidence in support of such an assertion. It has been urged on behalf of the appellant that only the eldest male off-spring of the Attingal Ranis could, by custom, be the ruler and all the heirs of the Ranis who constituted joint Hindu family would be entitled to a share in the properties of the Ranis and the properties in suit were held by Respondent No. 1 as head of the tarwad even though impartible in his hands. This plea has been repelled by the trial court as well as by the High Court and nothing convincing has been brought to our noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, and titles of the Ruler thereof, is hereby guaranteed. (2) Every question of the disputed accession in regard to a Covenanting State shall be decided by a Council of Rulers after referring it to the High Court of the United State and in accordance with the opinion given by the High Court. 27. From the materials on record, in these appeals, there is nothing to suggest that the succession to the estate of the ruler- or his family (other than succession to the gaddi) was governed by the principle of primogeniture. In these circumstances, the law on the subject is clear: sans evidence of a preexistent custom with respect to primogeniture (as the overarching rule of succession, to the exclusion of all heirs) the general law of succession, i.e. the rules applicable to HUF, would apply. 28. Calcutta Discount Co. Ltd. v. Income-Tax Officer, Companies (1961) 041 ITR 0191 is a decision for the proposition that it is for the assessing officer (AO) to draw the correct conclusions, regardless of the position of the assessee: It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebod ..... X X X X Extracts X X X X X X X X Extracts X X X X
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