COMMISSIONER OF INCOME TAX Vs. RADHE SHYAM AGRAWAL

JUDGEMENT

(1.) THESE references under Section 256(1) of the Income-tax Act, 1961, are at the instance of the Revenue. The reference in Tax Cases Nos. 61 and 62 of 1983 in which the assessees are full brothers and members of the bigger Hindu undivided family is in the same terms. Tax Case No. 9 of 1982, is a different case altogether. But although the reference is not in the same terms and the facts, naturally, also are not exactly the same, the controversy is one and the same in these cases. They have, as such, been heard together and are disposed of by this common judgment.

(2.) IN Tax Case No. 9 of 1982, the material facts are as follows. The assessee's family consisted of himself, i.e., Radhe Shyam Prasad Agarwal, wife, two sons (including a minor son) and three daughters (including one minor and one married daughter). The assessee used to file returns in the status of a Hindu undivided family and was being assessed to income-tax as such. On the last date of the previous year relevant to the assessment year 1976-77, partial partition in the family took place. The capital standing in the name of the Hindu undivided family was partitioned amongst the members of the family, namely the assessee, his two sons, Suresh Prasad Agarwal and Ganesh Prasad Agarwal, and wife, Smt. Sita Devi Agarwal. The assessee claimed that he should be assessed in the status of the Hindu undivided family because even after partition he had a legal obligation to maintain his wife and he along with his wife constituted the Hindu undivided family. The INcome-tax Officer took the view that since the capital of the Hindu undivided family had been partitioned and the wife had also got share and there was none to claim any share in the property which had come into the hands of the assessee, his status would be that of individual. The Appellate Assistant Commissioner on appeal by the assessee reversed the finding of the INcome-tax Officer. He held, following the decision of the Supreme Court in N. V. Narendranath v. CWT [1969] 74 ITR 190, that the assessee along with his wife continued to form a Hindu undivided family. The Appellate Tribunal, on appeal by the Revenue, affirmed the view of the Appellate Assistant Commissioner. It relied, besides N. V. Narendranath's case [1969] 74 ITR 190 (SC), on CIT v. Pannalal Rastogi [1974] 96 ITR 110 (Patna), Addl. CIT v. V. K. Purwar [1979] 116 ITR 908 (All) and Banarsi Lal Tulsiyan v. CIT [1980] 124 ITR 310 (All). On an application by the Department, the Tribunal referred the following question of law to this court for opinion :

(3.) SINCE the Appellate Tribunal has heavily relied on N. V. Narendra-nath's case [1969] 74 ITR 190 (SC) which, as a matter of fact, is the foundation of its decision, it would be only appropriate to know the ratio decidendi of that case. The Supreme Court in N. V. Narendranath's case [1969] 74 ITR 190 observed that the expression "Hindu undivided family" in the Wealth-tax Act is used in the same sense in which a Hindu joint family is understood in the personal law of Hindus. Under the Hindu system of law a joint family may consist of a single male member and his wife and daughters and there is nothing in the scheme of the Wealth-tax Act to suggest that a Hindu undivided family as an assessable unit must consist of at least two male members. (The term "Hindu undivided family" is not defined under the Income-tax Act and, therefore, must have the same incidents and meaning as the one given to it in the context of the Wealth-tax Act). Having said so the court observed (page 193) :