A. VISVANATHA THEVAR Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) The question sought to be raised before this Court is as to whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the applicant HUF has to be assessed at a higher rate as a specified HUF under the WT Act.

(2.) The Tribunal held that the applicant HUF had to be assessed at a higher rate as it came under paragraph I-A of the Schedule to the Wealth-tax Act and since the wife's wealth has been found to exceed Rs. one lakh. The contention urged on behalf of the assessee is that though the wife is loosely called a member of HUF, she is not a coparcener and therefore her wealth cannot be taken into account for the purpose of determining whether the applicant HUF could to taken to fall under para 1-A of the Schedule. The submission made by the ld. counsel for the assessee is that para 1-A of the Schedule will apply only to an HUF where there are at-least two coparceners, of whom one has got wealth exceeding Rs. one lakh. The learned counsel, however, does not dispute the fact that for the purpose of tax laws, a sole surviving coparcener with female members can constitute an HUF. If the contention of the learned counsel for the assessee is to be accepted, then the HUF contemplated under para 1-A of the Schedule can only be an HUF with at least two coparceners as members. But we do not see any justification for restricting the operation of para 1-A of the Schedule to an HUF which has at least two coparceners as members. It is by now well established that it is not a perquisite for the coming into existence of an HUF that there should be at least two coparceners as members. Thus, an HUF can consist of a sole surviving coparcener and his wife, even if there are no other male or female members.

(3.) In Kalyanji Vithaldas v. Commissioner of Income Tax (1937) 5 ITR 90 (PC) the Privy Council has made a distinction between a coparcenary and an HUF and pointed out that a coparcenary should not be confused with an HUF. In that case, it has been clearly ruled that a female can be a member of an HUF. In N.V. Narendranath v. CWT, Andhra Pradesh (1964) 74 ITR 190(SC) the Supreme Court has laid down that under the HUF system of law, a joint family can consist of a single male member and his wife and daughters and there is nothing in the scheme of the WT Act to suggest that an HUF as an assessable unit must consist of at least two male members. Again the Supreme Court in Surjit Lal Chhabda v. Commissioner of Income Tax, Bombay 1976 CTR (SC) 140: (1975) 101 ITR 776(SC) considered the position of the Hindu law on this aspect and laid down that the wife and unmarried daughters of a sole male member can be members of a joint Hindu family. In the light of these decisions, we are not prepared to accept the contention advanced on behalf of the assessee that unless there are two coparceners of whom one has a net wealth of Rs. one lakh para 1-A of the Schedule to the WT Act cannot be applied. We do not also see any force in the contention of the ld. counsel for the assessee that the wife whose net wealth is found to exceed Rs. one lakh should not be regarded as a member of the HUF for the purpose of wealth-tax. We, therefore, see no merit in the contention of the assessee that para 1-A of the Schedule to the WT Act will apply only to an HUF which has at least two male members and that it will not apply to an HUF consisting of one male member and other female members. It is significant to note that the word used in para 1-A of the Schedule is " member" and not " male member" or "coparcener". It s, therefore, not possible to give a restricted meaning to the word "member" occurring in para 1-A of the Schedule to the WT Act. Schedule 1-A nowhere makes any reference to a coparcener and, therefore, we cannot bring in the notion of coparcener or coparcenary, while construing the provisions of the Schedule to the WT Act.