9911796707
TMI Blog1998 (9) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... is reference. Sub-paragraph II of paragraph A of Part III of the Finance Act, 1986, prescribes the rates of income-tax in respect of a Hindu undivided family which at any time during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the 1st day of April, 1987, exceeds Rs. 18,000. Section 64 of the Income-tax Act does not deal with, or refer to the Hindu undivided family. It provides for including the income of spouse, minor child, etc. Section 64 clearly recognizes the fact that the income of the spouse and the income of the minor child is not the income of the individual in whose hands such income has to be assessed. It is only for the purpose of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision, the income of the spouse and minor was to be included in the income of the assessee. Learned counsel for the assessee submitted that section 64 of the Act has not declared that the income of the spouse or the minor children is the income of the other spouse or the parent, but it only makes that assessee's spouse or parent liable to include the income of the spouse or the minor child in his return and pay tax by treating the same as part of his income, and also pay the penalties in case of his failure to do so. That, however, according to counsel does not have the effect of making the income of others the income of the assessee for all purposes, and make the income of the minors includible in the income of the Hindu undivided famil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f bringing profits of the earlier years into the immediately preceding previous year. But the fiction could not be carried further than what it was intended for, and could not be used to make those profits take the place of total income, which did not exist in the previous year and to which the rate is to be applied under the terms of the proviso. The court held that if the words of a taxing statute fail, then so must the tax. The courts cannot, except rarely and in clear cases, help the draftsmen by a favourable construction. Counsel for the assessee also relied on the decision of the Allahabad High Court in the case of CIT v. Nathimal Gaya Lal [1973] 89 ITR 190 [FB], in judgment of the Full Bench of that court reported in [1973] 89 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at purpose that their income is to be regarded as part of the total income of the assessee. As has been held by the Supreme Court, section 5 of the Income-tax Act is subject to the other provisions of the Act including section 64 and, therefore, income which is required to be included in the income of the assessee though not includible strictly in terms of section 5 of the Act nevertheless should be regarded as part of the total income. The words used in sub-paragraph II of paragraph A of Part III of the Finance Act, 1986, as noticed at the outset are "one member whose total income . . .". If the income of the assessee for the purpose of income-tax is to include the income of the minors and that income is part of his total income, it bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included in the income of the parent, that it is treated as part of the total income. After it is so treated as forming part of the total income, it remains a part of the total income and is not required to be deleted therefrom, once the inclusion is properly made. That is the reason why an assessee who fails to include the income required to be included under section 64 of the Act, is subject to penalties, if he fails to file his return showing such income also as part of his total income. The total income so determined under the Act is the total income that is referred to in the Finance Act, 1986. The reference is not to the total income of the individual, but it is the total income of a member. In order to determine the scope of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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