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Mt. Bhagwati W/O Kalyan Singh ... vs Commissioner Of Income-Tax

High Court Of Judicature at Allahabad|15 October, 1940

JUDGMENT / ORDER

JUDGMENT Collister, J.
1. This is a reference under Section 66(2), Income-tax Act (11 of 1922). The assessee is Mt. Bhagwati, widow of Kalyan Singh, who died on 18th October 1918. On her husband's death, Mt. Bhagwati applied for mutation, alleging that Kalyan Singh was a separated Hindu. She was opposed by the collaterals, who contended that Kalyan Singh died a member of the joint family. The mutation Court found in favour of the collaterals; but, ultimately, the matter was compromised, the necessity for litigation in the civil Courts being thereby obviated. Under a deed of agreement dated 10th October 1919 the assessee accepted the position that her husband had died as karta of the undivided family and she gave up all right and interest in the family property except such as was embodied in deed of agreement; and the coparceners agreed to pay the assessee an allowance of Us. 1000 per mensem by way of maintenance for the remainder of her life. They agreed to other conditions also about certain family matters but we are not concerned with them. It was recited in the document that the terms of the agreement were in accordance with the oral instructions of late Kalyan Singh. Thereafter the allowance was regularly paid to and received by the assessee. On 9th April 1923, there was a partition in the family, which disrupted into five separate groups or entities, as follows : (1) Hanuman Prasad and Ram Gopal, sons of a deceased brother of Kalyan Singh, (2) Govind Das, brother of Kalyan Singh, (3) Eaghunath Das, (4) Gokul Das, (5) Lachman Das. raghunath Das is the son of Govind Das and was adopted by Ram Das, a deceased brother of Kalyan Singh and Govind Das. Gokul Das and Lachman Das are both sons of Govind Das. At the disruption, Hanuman Prasad and Ram Gopal on the one side and Govind Das on the other each agreed to contribute Rs. 500 to the assessee's monthly allowance of Rs. 1000 and this agreement was duly implemented. To all this, of course, the assessee was no party. For the assessment year 1935-36 the Income-tax Officer assessed to tax the sum of Rs. 12,000 being the allowance received by the assessee for the 12 months ending 31st March 1935. This assessment was made under Section 34 read with Section 23(3) of the Act. The Income-tax Officer held that Section 14(1) of the Act was not applicable. That section provides:
The tax shall not be payable by an assessee in respect of any sum which he receives as a member of a Hindu undivided family.
2. The Income-tax Officer says:
I cannot read into Section 14(1) that it applies also to a person who may have been once a member of the undivided family. The discussion whether she was or was not a member of the family is therefore futile.
3. Then he says:
There is another aspect of this case. Mt. Bhagwati had surrendered all her rights, whatever she may have had, by entering into an agreement dated 10th October 1919. The allowance that she has been getting is only by virtue of the deed of agreement and as such it is not exempt under the Act.
4. The assessee appealed to the Assistant Commissioner, but her appeal was dismissed. That officer agreed with the view taken by the Income-tax Officer and he also based his order on another ground, which was that under the Mitakshara School of law:
A widow cannot be a member of a coparcenary and therefore the appellant is not a member of a Hindu undivided family.
5. As we shall show, this view of the law is incorrect. The assessee then applied to the Commissioner of Income-tax for review under Section 33 and alternatively for a reference to this Court under Section 66(2). The Commissioner declined to give relief under Section 38 but has referred the following question of law to this Court under Section 66(2).
Whether the sum of Rs. 1000 per month received by the petitioner in the account year 1934-35 was received by her as a member of a Hindu undivided family within the meaning of Section 14(1) of the Act.
6. The Commissioner is of opinion that the question should be answered in the negative. He says:
The Hindu undivided family to which she once belonged became disrupted in 1923 and partitioned itself into five separate entities, in none of which, so far as I can see, she has any legal place. The maintenance allowance which the petitioner is now receiving from two of these entities is not therefore being received by her as a member of a Hindu undivided family as there is no undivided family in existence to which she can at present be said to belong.
7. The first question that falls to be considered by us is whether a widow can be a member of a Hindu undivided family. In this connexion learned Counsel for the assessee has referred us to a number of authorities in support of the proposition. Learned Counsel for the Department at first contested this point, relying mainly on an observation in In re Maharajkumar of Vizianagaram ('34) 21 A.I.R. 1934 All. 818 at p. 1243, where the learned Judges say that widows cannot be regarded as members of an undivided Hindu family within the meaning of Section 14(1) of the Act.
8. There is, however, a volume of authority to the effect that the widow of a coparcener is a member of the undivided family. In Mulla's Hindu Law, Edn. 9, paragraph 212, we read:
A joint Hindu family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters.
8. Paragraph 213 says:
A Hindu coparcenary is a much narrower body than the joint family. It includes, only those persons who acquire by birth an interest in the joint or coparcenary property.
9. In Vedathanni v. Commissioner of Income-tax, Madras ('32) 19 A.I.R. 1932 Mad. 733 it was held by a Pull Bench of the Madras High Court that the widow of a member o£ a joint Hindu family is herself a member of that family within the meaning of Section 14(1), Income-tax Act. The learned Judges say: "The object and scope of Section 14 is to prevent the Grown from taxing twice over." Further on they say:
If widows are not exempted by reason of the above construction, the Crown would undoubtedly be taxing twice over.
10. This decision was approved by the Bombay High Court in Commissioner of Income-tax, Bombay v. Gomedalli Laxminarayan ('35) 22 A.I.R. 1935 Bom. 412. In that case the assessee and his father formed a joint Hindu family. They were possessed of ancestral property which, on the death of the father, devolved by surviorship on the assessee, who lived with his wife and mother. He was assessed to income-tax as an individual. He contended that he was entitled to be taxed as a Hindu undivided family, and the High Court found in his favour. At p. 621, Beaumont, C.J. observes:
The nature of a Hindu undivided family was perfectly well-known to the Legislature when the Income-tax Act was drafted, and it was well-known that the expression 'Hindu undivided family' includes females and is much wider than 'coparcenary,' which includes only the males in whom the joint family property is vested.
11. At pp. 625 and 626, Rangnekar, J. says:
It is clear, therefore, that there is a sharp distinction between what is understood in the Hindu law by the expressions 'undivided Hindu family' and 'coparcenary.' Now these two expressions which are known to every Hindu lawyer, were before the Legislature when the Income-tax Act came to be enacted. It is a canon of construction that one cannot impute ignorance to the Legislature of well-known legal expressions. The Legislature must be presumed to be acquainted with not only the actual state of the law but with the legal interpretation put upon technical expressions by the Courts. If then the Legislature chose to adopt a wider expression like 'undivided Hindu family' instead of the narrower one 'coparcenary,' the Courts have no option left but to construe the wider expression in the way in which it has been construed and understood under the Hindu law. To put a narrower meaning on the expression 'undivided Hindu family', as the Crown wants us to do, would, in my opinion, be legislating instead of interpreting the section.
12. Then there is a more recent decision from Bombay, Commissioner of Income-tax, Bombay Presidency, Sind and Aden v. Makanji Lalji ('37) 24 A.I.R. 1937 Bom. 479. The assessee in that case was a Hindu undivided family. The widow of one of the coparceners obtained a decree for maintenance from the Court. At the time of assessment the assessee claimed a deduction in respect of the amount which the widow received as maintenance; but the High Court held that no such deduction was possible. At p. 829 Beaumont, C.J. who delivered the judgment, says:
Now, inasmuch as the assessee is the Hindu undivided joint family, which includes this widow, it is difficult to see how any deduction can be allowed in respect of a share of the income going to one of the members of the joint family.
13. At page 830 he says:
But in this case, the assessment being on a Hindu undivided family, it seems to me that the whole of the income of the Hindu undivided family is liable to assessment and that it is impossible to deduct this sum payable to the widow of a deceased brother, who gets it in her capacity ultimately as a member of the joint family.
14. The view expressed in the above two cases was followed by this Bench in Kedar narain Singh v. Commissioner of Income-tax C.P. & U.P. ('38) 6 I.T.R. 157 and still more recently by a Bench of the Oudh Chief Court in Commissioner of Income-tax, C.P. and U.P. v. Rudh Kumari ('41) 28 A.I.R. 1941 Oudh 22 where it was held that a mother must be deemed to be a member of a Hindu undivided family with her son. Finally we shall refer to certain observations of the Judicial Committee of the Privy Council in Kalyanji Vithaldas v. Commissioner of Income-tax, Bengal ('37) 24 A.I.R. 1937 P.C. 36. At p. 412 their Lordships say:
The phrase 'Hindu undivided family' is used in the statute with reference, not to one school only of Hindu law, but to all schools, and their Lordships think it a mistake in method to begin by pasting over the wider phrase of the Act the words 'Hindu coparcenary' - all the more that it is not possible to say on the face of the Act that no female can be a member.
15. Further on, they say that they do not agree that a Hindu joint family necessarily consists of male members only. The law on the subject is, we think, clear and we are of opinion that the widow of a Hindu coparcenary, though not herself a member of the coparcenary body, may nevertheless be a member of the undivided family; and in view of the authorities, learned Counsel for the Department has had to concede that this is so.
16. We shall now consider a point which counsel for the Department has taken in connexion with the agreement of 10th October 1919.He contends that between that date and the disruption of the family on 9th April 1923 the assessee was not receiving the allowance of Rs. 1000 as a widow in a Hindu undivided family; the allowance was an annuity for consideration, the said consideration being her admission that Kalyan Singh had died joint with the other members of the family and her surrender of the rights which she was claiming in the family property. The Income-tax Officer and the Assistant Commissioner both held inter alia that the assessee can only base her claim on the deed of agreement of 10th October 1919, but the Commissioner has not touched this point. His reference appears to proceed on the assumption that the assessee was receiving the allowance as a member of a Hindu undivided family and that it was only by reason of the disruption in 1923 that she lost the exemption which Section 14(1) of the Act provides. We shall therefore reply to the question referred to us upon this assumption.
17. We now come to the most important point in this reference and that is whether, assuming that after 10th October 1919 the assessee was drawing the allowance as a. member of a, Hindu undivided family, she is or is not now drawing it in that capacity. On behalf of the assessee Mr. P.L. Banerji has argued this matter from two aspects. In the first place he contends - and not altogether without force - that, having originally received this allowance as a member of a Hindu undivided family, the capacity in which she was receiving it was unaffected by the subsequent disruption among the coparceners. He pleads that, even if she is herself no longer a member of a Hindu undivided family, she is nevertheless receiving the allowance in that capacity within the meaning of Section 14(1); her status quoad the right to maintenance is unchanged. The other aspect of the matter which learned Counsel for the assessee has put before us is that she has not ceased to be a member of a Hindu undivided family at all; and here we think that the assessee is on firmer ground. There can be no partition between a female who is a member of a Hindu undivided family and the coparceners, and therefore it is contended that the assessee, after the disruption of the coparcenary body, continued to be a member of a Hindu undivided family with each of the separating entities, which had succeeded by survivorship to her husband's interest in the family property. We have already quoted the passage from Mulla's Hindu Law which says that a joint Hindu family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters;
and it has been held that a single individual may form a Hindu undivided family with a member or members of the family entitled to maintenance from the estate. In Vedathanni v. Commissioner of Income-tax, Madras ('32) 19 A.I.R. 1932 Mad. 733 already referred to in this judgment, there were two brothers Somasundara and Ramalinga. Ramalinga died leaving a widow, and subsequently Somasundara died leaving two widows. After Somasundara's death an adoption was made to him; and at the material time the adopted son, who was a minor, was the sole male member of the family. Eamalinga's widow sued him for maintenance and obtained a decree; and a question arose as to whether the amount so received as maintenance was chargeable as income-tax. A Full Bench of the Madras High Court held that she was a member of a Hindu undivided family and that the money received by her as maintenance was exempt under Section 14(1) of the Act. The judgment was delivered by Ramesam J., and at p. 5 that learned Judge after referring to two reported decisions, one from Calcutta and one of the Privy Council, says:
...there can be a joint family with a single member provided there are other members entitled, to maintenance from the estate.
8. Further on he observes:
So far as the case before us is concerned, undoubtedly there is a joint family and also the petitioner in this case is entitled to maintenance as the widow of a deceased coparcener and received it as a member of an undivided family.
9. The Court refrained from expressing any view as to what the position would be in a case where the surviving male members effected a partition between themselves while continuing to pay maintenance to widows of deceased coparceners as in the case with which we are now concerned. In Commissioner of Income-tax, Bombay v. Gomedalli Laxminarayan ('35) 22 A.I.R. 1935 Bom. 412 to which also we have already referred in another connexion Beaumont C.J. on page 621 says:
It is clear law that you may have a joint Hindu family consisting of one male member and female members who are entitled to maintenance, although that does not mean that every Hindu who possesses a wife and a mother is necessarily a member of a joint Hindu family....
10. There is of course no coparcenary body where the family consists of an individual male and for instance his deceased brother's wife; but if the latter, having authority from her late husband, should adopt a son, the latter would become a coparcener with his uncle in the family estate. Authority for this proposition will be found in the two decisions which were referred to by Ramesam J., in Vedathanni v. Commissioner of Income-tax, Madras ('32) 19 A.I.R. 1932 Mad. 733. The first of these is Surendra nandan v. Sailaja Kant Das ('91) 18 Cal. 385. In that case there were two brothers, Raghunath and Bissonath, living as a joint family under the Mitakshara law. Bissonath died, leaving a widow with the power of adoption. The widow adopted a son and it was held by a Bench of the Calcutta High Court that the latter succeeded to his father's interest in the joint family property notwithstanding that it had already vested in Raghunath. Similarly, in Bachoo Hurikisondas v. Mankorebai ('07) 31 Bom. 373 there were two brothers forming a joint family under the Mitakshara law and possessed of considerable property. On 14th September 1900 one brother died without male issue, but leaving his widow pregnant. The other brother died on 17th December 1900 after authorizing his widow under a will to adopt a son, such authority to hold good even in the event of a son born to the other widow. On 18th December of that same year, the pregnant widow gave birth to a son and on 17th February 1901 the other widow adopted a son. It was held by their Lordships of the Privy Council that the adopted son became on adoption a coparcener in the family property with the son who was naturally born to the other widow.
11. In the case which is now before us the assessee was a member of a Hindu undivided family up to 1923; and as we have already said, there can be no partition between a coparcener and a member of the undivided family who is not a coparcener, as for instance, the widow of a deceased coparcener. It seems to us therefore that after the disruption of the family on 9th April 1923, the assessee continued to be a member of a Hindu undivided family with each of the entities into which the family disrupted, irrespective of whether any such entity consisted of one male member or of several male members. Upon this view of the matter, the assessee will be exempted from payment of income-tax under Section 14(1) of the Act, and this is the conclusion at which we have arrived. On the assumption therefore that up to 9th April 1923 the assessee was receiving her allowance as a widow in a Hindu undivided family, our reply to the question referred to us is in the affirmative. The assessee is entitled to her costs of this reference. Counsel for the Department is entitled to a fee of Ks. 200. A copy of this judgment under the seal of the Court and the signature of the Registrar will be sent to the Commissioner of Income-tax, Central and United Provinces.
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Title

Mt. Bhagwati W/O Kalyan Singh ... vs Commissioner Of Income-Tax

Court

High Court Of Judicature at Allahabad

JudgmentDate
15 October, 1940