COMMISSIONER OF INCOME TAX Vs. SHANKAR LAL BUDHIA

JUDGEMENT

(1.) Whether the status of an individual assessee governed by Hindu Law would change to that of a Hindu Undivided Family under the Income-tax Act merely on his marriage (as yet without issue) is the somewhat ticklish question necessitating this reference to the Full Bench.

(2.) The fact may be noticed with relative brevity. The respondent-assessee Shri Shankar Lal Budhia was originally a member of a larger Hindu Undivided Family of Shri Mahabir Prasad Budhia. Way back on the 22nd of March, 1956 there was a partial partition of the said family and at that time the respondent was a minor. Therein he was allocated shares in the Ranchi Electric Supply Co., Budhia Brothers Pvt. Ltd. and Ganpatrai Properties Pvt. Ltd. and thereafter he acquired interest in some other immoveable property as well. It is common ground that from the date of the partial partition for nearly a decade the tax returns were himself filed by him in the status of an individual upto the assessment year 1966-67. The assessment was also throughout made in the status of an individual.

(3.) However, after his marriage on the 9th of March, 1966 the assessee filed to returns-one in the status of an individual and the other in the status of an H. U. F. for the years 1967-68, 1968-69 and 1969-70. The Income-tax Officer, however, took the firm view that for these years also the status of the respondent- assessee must remain, as in the past, of an individual only. The assessee took the matter in appeal before the Appellate Assistant Commissioner wherein he called for a remand report from the successor Income-tax Officer who later expressed the view that the entire income under both capacities should be assessed in the status of an H. U. F. However, the Appellate Assistant Commissioner took the firm view that in respect of the assets acquired by the assessee on partial partition of the bigger H. U. F. on the 22nd of March, 1956 when the assessee was a minor and even after his marriage on the 9th of March, 1966, his status would continue to be that of an individual till a son was bora to him. Aggrieved thereby the assessee came up in further appeal to the Tribunal which held in his favour by observing that after his marriage in March, 1966 the assessee would also constitute an H. U. F. even when no son was born to him. They accordingly set aside the order of the Appellate Assistant Commissioner and remanded the matter back to him to dispose of the same in the light of the above.