COMMISSIONER OF INCOME TAX Vs. SARASWATHI VISWANATHAN

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Madras Bench, under Section 256(1) of the Income-tax Act, 1961, has referred the following question for the opinion of this court:

(2.) ONE S. Viswanathan, who was carrying on business as proprietor of the Central Art Press, died on January 20, 1960. He was survived by his mother, his widow and a minor son, one major daughter and three unmarried minor daughters. These persons, under the Hindu Succession Act, 1956, were entitled to succeed to the estate of the deceased Viswanathan, each inheriting a one-seventh share. On February 23, 1960, a partnership came into existence between the widow of Viswanathan and his major daughter, Kamala, and the three minor daughters and the minor son were admitted to the benefits of that partnership. The mother of Viswanathan had relinquished her interest in favour of her grandson, i.e., the minor son of Viswanthan, and, therefore, his share became two-sevenths as against the one-seventh of the others. We are concerned in these cases with the correctness or otherwise of the inclusion of the shares of the three minor daughters and one minor son in the profits of the firm in the assessment of the widow of Viswanathan as the mother of the said four minors. The assessing authorities as well as the Tribunal held that under Section 64 of the Income-tax Act, 1961, the income of those minors was includible in the income of the mother, viz., the widow of Viswanathan, and had to be assessed in her hands as such. It is the correctness of this conclusion that is challenged in the form of the question referred to above in the present reference. T.C. No. 8 of 1971 and T.C. No. 369 of 1975 are at the instance of Mrs. Viswanathan, the former case (T.C. No. 8/1971) covering assessment years 1962-63 and 1963-64 and the latter case (T.C. No. 369/1975) covering the assessment year 1964-65. It may be pointed out that before the assessment year 1964-65, the son of Viswanathan had become a major and, therefore, for the assessment year 1964-65, the income of the three minor daughters alone has been included in the income of the mother. It is in these tax cases, the question referred to above arises. The other reference in T.Cs. Nos. 2, 4, 7, 15, 64, 80, 91 and 93 of 1971 have been made at the instance of the department. What happened in this case was that the officers of the department, while including the income of the minors in the income of the mother and assessing her in respect of the entire income, simultaneously by way of protective assessment, assessed the respective income of the minors in their hands. However, when the Income-tax Appellate Tribunal finally upheld the action of the authorities in including the income of the minors in the income of the mother under Section 64, it had to set aside the protective assessments made against the minors themselves in respect of their shares of income with reference to the three years in question and, therefore, the assessments were set aside. It is in respect of this part of the order of the Tribunal, the tax cases referred to above have come before this court at the instance of the department, the question raised there being :

(3.) THUS, it is clear that each of the Sub-clauses (i), (ii), (iii) and (iv) enumerated in Section 16(3)(a) has to be read only in conjunction with the opening portion of Section 16(3)(a), namely, "so much of the income of a wife or minor child of such individual as arises directly or indirectly ". This portion of Section 16(3)(a) fixes up the sex of the " individual " as a male, because it refers to the wife of the individual. Consequently, once each one of the sub-clauses in Section 16(3)(a) has to be read with the opening portion of Section 16(3)(a), the expression "individual" occurring in the four sub-clauses must certainly connote only a male and not a female. It is in view of this only it was held by the Supreme Court in the decision referred to above that the expression "individual" in Section 16(3) meant only a male and not a female. However, both the structure and language of Section 64 of the Income-tax Act of 1961 are totally different. That section consists of five sub-clauses. The opening part of the section States :