Income Tax Appellate Tribunal - Amritsar
Ved Parkash Loona vs Income-Tax Officer on 12 August, 1994
Equivalent citations: [1994]50ITD105(ASR)
ORDER
U.S. Dhusia, Judicial Member
1. The only issue, which arises in this appeal, for the assessment year 1975-76, relates to a claim of partition of joint family assets.
2. The assessee had made a claim that the joint family assets had been partitioned in September, 1974, following upon the death of Shri Ved Parkash Loona on November 23, 1973. Up to the assessment year 1974-75, the assessee had been assessed as a joint family, consisting of Shri Ved Parkash Loona, Shri Anurag Loona, Shri Chand Loona, minor sons, Anila and Sunila, minor daughters, and Smt. Sumitra Loona, wife of Shri Ved Parkash Loona. When Shri Ved Parkash had died, it was contended that Smt. Sumitra Loona, who was the only adult member of the family, was mismanaging and trying to grab the joint family assets. Therefore, the relatives and kith and kin of the family intervened on behalf of the minor sons and got a partition effected in September, 1974, by which the assets were -partitioned between the members of the family. A declaratory suit was filed on October 12, 1976, to put the matter beyond any doubt or dispute in future. The declaratory suit was decreed by an order of Sub-Judge, First Class, Muktsar, on December 14, 1976. On these facts, the assessee moved an application before the Income-tax Officer to pass an order under Section 171. The Income-tax Officer examined the claim of the assessee, but he could not persuade himself to accept that the claim of the assessee should be allowed. In his view, there were no coparceners to claim partition of the property in September, 1974. What he meant was that the minors could not claim a partition. The partition could only be decreed through a suit which the minor could file through a legal guardian or the next friend, appointed by a court. According to him, this suit had been filed by Shri Kishore Chand, acting as the next friend of the minors, who was a maternal grandfather. He could not be the guardian, in law, for the two minors. He further held that, in any case, no division of Hindu undivided family has taken place in September, 1974, as alleged by the assessee. Accordingly, he rejected the claim of the assessee. The Appellate Assistant Commissioner, Rohtak, concurred with the Income-tax Officer when the matter went in appeal before him and he also rejected the contention of the assessee and dismissed the appeal. The assessee had raised the plea that the facts of the case called for a consideration of Section 6 of the Hindu Succession Act. But his plea was not considered by the Appellate Assistant Commissioner and, as we have already indicated, his appeal was dismissed. The assessee, having felt aggrieved, has, therefore, brought the issue in appeal before the Appellate Tribunal.
3. Before us also, learned counsel for the assessee placed his reliance on the fact of the panchayat of relatives in September, 1974, which had brought about a family settlement by way of partition of the joint family assets, when it had been found that the widow of Shri Ved Parkash Loona was trying to grab the entire estate. It was through the auspices of Shri Kishore Chand, maternal grandfather, that the declaratory suit had been filed, which declared the assets passing into the ownership of the members according to the partition, effected in September, 1974. No doubt, it was submitted by learned counsel for the assessee that the suit was filed on October 12, 1976, and was decreed on December 14, 1976, but that would hot mean that the date of partition would be any of these dates and not September, 1974, when panchayat of the relatives and friends had brought about the family partition. On the other hand, the Departmental Representative showed authority to say that the effective date would be the date when the plaint was filed. The judgment delivered in the suit will relate back to the date of the plaint and, therefore, the partition being effected, would fall in the year 1977-78 and not the assessment year 1975-76. He also assailed the genuineness of the decree and canvassed that income-tax authorities were not debarred from looking into the facts and make their appraisal different from what was apparent from a perusal of the judgment, passed by the Sub-Judge, Muktsar.
4. We have considered the facts of the case and given our very careful consideration to the submission, made by the respective parties. On a consideration of all the facts, brought on record, we are not persuaded that the authorities below have reached a correct finding on the issue. In our view, in reaching a finding, the authorities lost sight of the provision, contained in the Hindu Succession Act, which the assessee had reiterated, again and again, before the authorities. Since a consideration of the provision is necessary for reaching a finding in this appeal, we would reproduce Section 6 and Section 14 of the Hindu Succession Act :
"6. When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act :
Provided that, if the deceased had left him surviving a female relative specified in class I of the Schedule or a male relative, specified in that class who claims through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship."
"14. (1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner."
5. A careful perusal of these sections would show that, as soon as Shri Ved Parkash died, his share in the deemed partition would pass on to his heirs, including the widow and the two minor daughters. According to Section 14, they would be possessed of this share immediately, with absolute powers of disposition. It was in the exercise of this power that Smt. Sumitra Loona appears to have started grabbing the family assets. If the relatives intervened, on behalf of the minor sons and brought about a proper ascertainment of their respective interests by way of a family arrangement, on the basis of which the Sub-Judge, Muktsar, declared the respective parties owners in possession of those assets, how could the question of the minors, claiming the partition or Kishore Chand, not being authorised as a guardian or next friend, arise for consideration, at all. If there was any partition, that partition, law has already deemed to have taken place before Shri Ved Parkash had died. It was only to ascertain and identify the interest of the respective parties that the family arrangement in September, 1974, was brought about, which the assessee claimed rightly or wrongly as a case of partition. We have not been able to appreciate the objections raised to this by the Income-tax Officer on the ground that the minors were not entitled to claim partition and a partition on behalf of the minors could be effected only through a suit in the court, which could be initiated by a guardian appointed by the court for the minors. It is clear to us that the facts have not been properly appreciated and considered by the two authorities when they turned down the plea of the assessee that a partition was effected. If they had borne in mind the two provisions of the Hindu Succession Act, reproduced by us above, there should not have arisen this difficulty before them. We may look at this issue from the standpoint of the civil court decree. No doubt, the plaint of the suit was filed on October 12, 1976, and the suit was decreed by an order passed in judgment on December 14, 1976, but it has not been noticed by the two authorities below that it was a proceeding in a declaratory suit. In such a suit, the court is not called upon to decide the dispute either in favour of one or the other party. The purpose of the declaratory suit is to declare the right or title of the party, which already he is possessed of. The first sentence of the judgment reads as under :
"The suit of the plaintiff is for declaration to the effect that the plaintiffs are owners-in-possession of the properties, mentioned in paragraph A of the heading of the plaint and defendant No. 2 is owner-in-possession of the properties as mentioned in paragraph B of the heading, of the plaint. ..."
6. Without noticing that the court has not passed on the title by its judgment to the respective parties, they failed to notice that what was done, was that the court had declared the title and the right of the respective parties, which they already possessed. A question arises as to when this title or right passed as a result of the judgment of the court. According to the assessee, the respective rights and title passed to them as a result of the partition, effected through the auspices of the panchayat of relatives in September, 1974. The Income-tax Officer, if he did not want to accept this claim of the assessee, should not have only relied on the judgment passed in the declaratory suit, but should have shown that the rights and the title if they did not pass from the date on which panchayat was held in 1974, passed as a result of some other agreement or partition having taken place anterior or subsequent to September, 1974. The Income-tax Officer, by adopting a negative approach, has not been able, in our view, to discredit the claim of the assessee, that the partition, as we have found, by way of family arrangement, had been effected in September, 1974, through the auspices of the panchayat of the relatives. Therefore, whether we look at the claim of the assessee for an order under Section 171 of the Act, regarding the partition of the assets of the family, either from a consideration of the provisions, contained in the Hindu Succession Act, or from the standpoint of the decree passed in the judgment, we cannot but accept the claim of the assessee as fully made out. Taking this view, it is not possible for us to uphold the finding of the lower authorities, which has got to be vacated. We order accordingly.
7. The appeal is allowed.
P.K. Mehta, Accountant Member
8. I have given very anxious and serious thought over a length of time to the issue involved in this appeal and the decision proposed by my learned Brother. The argument about the partition made under Section 6 of the Hindu Succession Act read with the proviso and Explanation 1 was raised before the Appellate Assistant Commissioner by the assessee's counsel and has been considered by the learned Judicial Member in the order proposed by him. I am, however, unable to share the view taken by him about the partition. Proceeding from the angle of Section 6, it appears to me that necessary facts, which will have material bearing on the question of partition have not been found out,
9. First let me state the position about the scope of Section 6 and the partition referred to in Explanation 1. Section 6 deals with an interest in a Mitakshara coparcenary property of a male Hindu and as to how that interest will devolve upon his death. In the instant case, it is undisputed that Shri Ved Parkash Loona was the karta of the Hindu undivided family bearing his-name and in this appeal the issue is about the partition of properties after his death on November 23, 1973. He left behind his widow, Smt, Sumitra Loona, two minor sons, Chand and Anurag, two minor daughters, Anila and Sunila, and two major daughters, Suchitra and Alka. It is also mentioned in the order under Section 171 under consideration that Shri Ved Parkash Loona had been assessed in the status of Hindu undivided family till August 31, 1974. The Appellate Assistant Commissioner in his order, however, states that Shri Ved Parkash Loona had been assessed in the status of Hindu undivided family till March 31, 1974, and the Appellate Assistant Commissioner's statement appears to be based on the facts of the case annexed with the grounds of appeal in which it was mentioned that Shri Ved Parkash Loona had been assessed in the status of Hindu undivided family till assessment year 1974-75. In the statement of facts included in the appeal papers before the Tribunal, it is mentioned that the appellant was assessed in the status of Hindu undivided family till August 31, 1974, relevant to the assessment year 1975-76. It is apparent from this that it is not clear up to what assessment year Shri Ved Parkash Loona, Hindu undivided family, has been assessed as such, i.e., up to the assessment year 1974-75 or the assessment year 1975-76, but one thing is clear that even after the death of the karta on November 23, 1973, the assessment in the status of Hindu undivided family has been made for the assessment year 1974-75. The material question, therefore, is that as Shri Ved Parkash Loona died leaving behind female relatives specified in class I of the Schedule, the proviso to Section 6 will be attracted and it is the interest of the deceased in the Mitakshara coparcenary property, which shall devolve in this case by intestate succession under the Hindu Succession Act. The important thing to note is that it is only the coparcenary interest of the deceased, which will be governed by. succession and not by survivorship and qua the other male coparceners the rule of survivorship would still hold good and they will not be automatically separated, thus obliterating the Hindu undivided family itself. The effect on the coparcenary on the death of a coparcener leaving, inter alia, female heirs specified in class I of the SchedMle is that on the death of such a coparcener his share alone in the coparcenary property becomes severed and distinct to be inherited by those heirs and that share is not subsequently subject to the fluctuations of increase or decrease due to changes in the membership strength of the coparcenary but this, however, does not affect the incidence of survivorship and other incidents of a normal coparcenary as between the other members of the coparcenary. In other words, where the proviso to Section 6 applies, there will be no disruption of joint family status qua the rest of the coparceners surviving 'the deceased-coparcener and the coparcenary will continue till a partition is effected. However, the coparcenary property will not include the interest of the deceased coparcener and the karta in relation thereto cannot exercise his powers as karta and he cannot represent the female heirs, who are not coparceners. Again the fictional partition in Explanation 1 to Section 6 is only for the limited purpose of deducting the share of the deceased-coparcener and that partition will not destroy the joint family status qua the surviving coparceners. This being the position as I understand it, what will be required in this case, first will be segregation of the share of the deceased karta in the Hindu undivided family property and then afterwards it is only the remaining property which can be subjected to partition amongst the other coparceners in accordance with the principles of Hindu law. A reading of the copy of the plaint dated September 19, 1976, in the suit for partition filed before the Sub-Judge, First Class, Muktsar, gives the impression that the entire property of the Hindu undivided family has been subjected to partition without segregating the share of the deceased-karta, Shri Ved Parkash Loona, which was subjected to rule of succession, as provided in Section 6 of the Hindu Succession Act. It has to be ascertained and debated as to what property of the Hindu undivided family has been subjected to partition and if it is found as a fact that the entire property of the Hindu undivided family including the share of the deceased-karta has been partitioned its effect on the validity of the partition sought to be recognised by the Income-tax Officer under Section 171 is to be considered and decided upon.
10. In view of the above discussion, I feel that the question of partition has not been correctly gone into by the two lower authorities nor relevant facts found. Consequently, I consider it proper to set aside the orders of the Appellate Assistant Commissioner and the Income-tax Officer under appeal and restore the issue to the Income-tax Officer's file for fresh determination. I order accordingly.
11. I may also take this opportunity to point out that the suit for partition filed before the Sub-Judge, First Class, Muktsar, appears to be a collusive suit in which the court did not go into the legal position. In the plaint, the two minor sons, Chand and Anurag, have filed the suit through maternal grandfather, Lala Kishore Chand, as guardian. In the arguments before the Appellate Assistant Commissioner that position was sought to be watered down by referring to Section 141 of the Civil Procedure Code and calling from as next friend. The effect in law of this modification in stand on the court order and decree has to be gone into and the position in law determined.
12. At the time of fresh disposal, I will consider it helpful if the Income-tax Officer examines in detail the question about a minor coparcener seeking partition. If the Hindu law permits partition only by court order on a plaint moved by the next friend on behalf of a minor, then it has to be seen as to what is the validity of a family arrangement seeking to partition the property which may have been- brought about by a panchayat of relatives in September, 1974, in this case. In other words, what is to be considered is whether a family arrangement can take place to partition the Hindu undivided family property when there are minor coparceners and the procedure of approaching the court by a suit for partition can be bypassed.
13. In the result, for statistical purposes only, the appeal of the assessee may be treated to be allowed.
ORDER OF REFERENCE TO THIRD MEMBER
14. As there is a difference of opinion between us on the following point, we refer the case to the President, as provided in Section 255(4) of the Income-tax Act, 1961 :
"Whether the claim of the assessee-Hindu undivided family for partition should be accepted or whether the orders of the lower authorities be set aside and the issue restored to the Income-tax Officer for re-examining the issue on the basis of guidelines given and in accordance with law."
ORDER OF THIRD MEMBER Vimal Gandhi, Judicial Member
15. The following point of difference between the learned Accountant and the learned Judicial Members has been referred by the Hon'ble President to me under Section 255(4) of the Income-tax Act, 1961 :
"Whether, the claim of the assessee-Hindu undivided family for partition should be accepted or whether the orders of the lower authorities be set aside and the issue restored to the Income-tax Officer for re-examining the issue on the basis of guidelines given and in accordance with law."
16. The facts of the case are given in the proposed orders of the learned Members. My decision is to be read conjunctively with the proposed orders and, therefore, I deem it unnecessary to give the facts in detail. The facts, in a nutshell and necessary for disposal of the matter, are that Shri Ved Parkash Loona who was assessed as karta of his Hindu undivided family comprising himself, his wife, Smt. Sumitra Loona, two minor sons and two minor unmarried daughters, died on November 23, 1973. The Hindu undivided family headed by him owned movable and immovable properties. These properties were claimed to have been partitioned in September, 1974, among members through the intervention of a panchayat of relatives. Subsequently, on December 12, (sic) 1976, two minor sons of late Shri Ved Parkash, namely, Chand and Anurag, filed a suit before the Civil Judge, Muktsar, for a declaration of ownership of certain land allotted to them on the above partition. Smt. Sumitra Devi and her daughters were made defendants. The suit was decreed on December 14, 1976. The Assessing Officer was then moved under Section 171 of the Act for recording a finding of partition effected in September, 1974. In support of claim reliance was placed on decree dated December 14, 1976, and other facts mentioned above.
17. The Assessing Officer rejected the above claim as in his view Shri Kishore Chand, father of Smt. Sumitra Devi, through whom the minor plaintiffs had filed the suit, had no right to claim partition of the Hindu undivided family. He further observed that in September, 1974, there was no major coparcener to claim partition of the Hindu undivided family. No legal partition of the Hindu undivided family, therefore, took place in September, 1974. The Assessing Officer, accordingly, rejected the claim of the partition. This was confirmed on appeal by the appellate authority.
18. On further appeal before the Tribunal, the difference now under consideration arose between the learned Members. The view of the learned Judicial Member can be summarised as under :
(1) That in view of sections 6 and 14(1) of the Hindu Succession Act, a deemed partition of the Hindu undivided family properties took place immediately prior to the death of Shri Ved Parkash Loona to ascertain his share in the joint properties. The said share of Shri Ved Parkash Loona in the Hindu undivided family properties passed on to his heirs including his widow, minor sons and minor daughters, and these persons acquired "absolute powers of disposition over the shares allotted to them".
(2) That to ascertain and identify the interest of the respective parties, the family arrangement in September, 1974, was brought about through the intervention of relatives and panchayat which the parties rightly claimed as partition.
(3) That the suit filed before the civil court on December 12, (sic) 1976, and decreed on December 14, 1976, was merely for a declaration of rights or title of parties which the parties already possessed and not for creating any title. The properties were not partitioned through the decree.
, (4) That the question of entitlement of minors to claim partition or the competence of the guardian to file such a claim, did not arise on the facts and circumstances of the case. The Income-tax Officer further failed to prove that the partition was made or rights and title passed to the parties on a date anterior or subsequent to September, 1974.
19. The learned Judicial Member accordingly directed the Assessing Officer to accept the claim of the partition of the Hindu undivided family made before him.
20. The learned Accountant Member disagreed with the above views. The basis of his order can be summarised as follows :
(1) That as per the provisions of Section 6 of the Hindu Succession Act, the interest of the late Shri Ved Parkash Loona as coparcener in the Hindu undivided family property devolved on his heirs through succession. His death did not bring to an end the Hindu undivided family. The other members continued as members of the Hindu undivided family with male coparceners governed by survivorship with their shares subject to fluctuations of increase or decrease due to changes in membership or strength of the Hindu undivided family. The aforesaid provisions of the Hindu Succession Act did not bring about a partition.
(2) That even after the death of Shri Ved Parkash Loona on November 23, 1973, the Hindu undivided family was admitted to continue up to the assessment year 1974-75. This was clear from the facts stated before the first appellate authority. The claim, in the above background, that the Hindu undivided family properties were partitioned earlier needed re-examination by the lower authorities.
(3) That the decree obtained from the civil court appears to be collusive. The other question, whether the suit filed through the next friend was competent was required to be redetermined. Likewise, the validity of the family arrangement seeking to partition the property brought about by the panchayat of relatives in September, 1974, needed fresh examination.
21. In the, above background, the learned Accountant Member thought it fit to remand the matter back to the lower authorities. He directed accordingly.
22. I have heard the learned representatives of the parties at length on the points of difference referred to above. Shri Sudershan Kapoor, learned counsel for the assessee, relied upon the order of the learned Judicial Member. He also brought to my notice the decision of the Supreme Court in the case of Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum [1981] 129 ITR 440, which supported the view taken by the learned Judicial Member regarding application of Section 6 of the Hindu Succession Act. Shri Kapoor also emphasised that a valid partition can be made during the minority of a coparcener. What is required is that the interest of the minor should be protected and he should be represented by a guardian. Shri Kapoor in this connection drew my attention to paragraph 4.50 of Maine's Hindu Law.
23. Shri J. S. Arora, the learned Senior Departmental Representative, on the other hand, supported the impugned order of the learned Accountant Member. He further argued that there was no evidence of partition through the alleged family arrangement brought about by the panchayat of relatives. At any rate, the learned Accountant Member had merely set aside the orders of the lower authorities with directions to examine the relevant points, which can still be canvassed before the lower authorities. The order of the Accountant Member thus caused no prejudice to any party but would advance the cause of justice. He accordingly wanted me to accept the order of the learned Accountant Member.
24. I have given careful thought to the rival submissions and examined the proposed orders of the learned Members in the light of the material available on record. In the following paragraphs, I would deal with the material controversies involved in this case.
25. The Assessing Officer as also the first appellate authority have rejected the claim of the partition under Section 171 mainly on the ground that Shri Kishore Chand, the maternal grandfather as guardian of the minors, Chand and Anurag, had no right to claim partition on behalf of the minors. Thus, the alleged partition was illegal and contrary to law. Reliance in this case has been placed on article 308 of Mull's Hindu Law (Fourteenth edition) as also on Section 12 of the Hindu Minority and Guardianship Act, 1956, which prohibits appointment of a guardian in respect of undivided interest in joint family property of a minor managed by an adult member of the family. As per the proviso to the said section, the provision does not affect the power of a High Court to appoint a guardian in the above situation.
26. In my view, there is some confusion in the order of the lower authorities as the distinction between the "guardian" and "next friend" for filing or defending a suit for and on behalf of the minors under the Civil Procedure Code has not been kept in view. Likewise, the purpose of the Hindu Minority and Guardianship Act has not been properly appreciated. The provisions of Order 32, rules 1 to 5, Civil Procedure Code, are reproduced below for a ready reference :
"R. 1. Minor to sue by next friend,--Every suit by a minor shall be instituted in his name by a person who in such suit shall be called the next friend of the minor. (D, HP, PU).
Explanation.--In this order, 'minor' means a person who has not attained his majority within the meaning of Section 3 of the Indian Majority Act, 1875, where the suit relates to any of the matters mentioned in Clauses (a) and (b) of Section 2 of that Act or to any other matter.
R. 2. Where suit is instituted without next friend, plaint to be taken off the file.--(I) Where a suit is instituted by or on behalf of a minor without a next friend, the defendant may apply to have the plaint taken off the file, with costs to be paid by the pleader or other person by whom it was presented.
(2) Notice of such application shall be given to such person, and the court, after hearing his objections (if any), may make such order in the matter as it thinks fit.
R. 3. Guardian for the suit to be appointed by court for minor defendant--(1) Where the defendant is a minor, the court, on being satisfied of the fact of his minority, shall appoint a proper person to be guardian for the suit for such minor.
(2) An order for the appointment of a guardian for the suit may be obtained upon application in the name and on behalf of the minor or by the plaintiff. (K).
(3) Such application shall be supported by an affidavit verifying the, fact that the proposed guardian has no interest in the matters in controversy in the suit adverse to that of the minor and that he is a fit person to be so appointed (A, D, HP, K, PU).
(4) No order shall be made on any application under this rule except upon notice to any guardian of the minor appointed or declared by an authority competent in that behalf, or, where there is no such guardian, upon notice to the father, or where there is no father, to the mother, or where there is no father or mother, to any other natural guardian of the minor, or, where there is no father, mother, or other natural guardian, to the person in whose care the minor is, and after hearing any objection which may be urged on behalf of any person served with notice under this sub-rule. (A, D, HP, K, PU).
(4A) The court may, in any case, if it thinks fit, issue notice under sub-rule (4) to the minor also.
(5) A person appointed under sub-rule (1) to be guardian for the suit for a minor shall, unless his appointment is terminated by retirement or removal or death, continue as such throughout all proceedings arising out of the suit including proceedings in any appellate or revisional court and any proceedings in the execution of a decree. (AP, KNT, MP, M).
R. 3A. Decree against minor not to be set aside unless prejudice has been caused to his interests.--(I) No decree passed against a minor can be set aside merely on the ground that the next friend or guardian for the suit of the minor had an interest in the subject-matter of the suit adverse to that of the minor ; but the fact that by reason of such adverse interest of the next friend or the guardian for the suit, prejudice has been caused to the interests of the minor shall be a ground for setting aside the decree.
(2) Nothing in this rule shall preclude the minor from obtaining any relief available under any law by reason of the misconduct or gross negligence on the part of the next friend or guardian for the suit resulting in prejudice to-the interests of the minor.
R. 4. Who may act as next friend or be appointed guardian for the suit,--(I) Any person who is of sound mind and has attained majority may act as next friend of a minor or as his guardian for the suit :
Provided that the interest of such person is not adverse to that of the minor and that he is not, in the case of a next friend, a defendant or, in the case of a guardian for the suit, a plaintiff.
(2) Where a minor has a guardian appointed or declared by a competent authority, no person other than such guardian shall act as the next friend of the minor or be appointed his guardian for the suit unless the court considers, for reasons to be recorded, that it is for the minor's welfare that -another person be permitted to act or be appointed, as the case may be (D, HP, PU).
(3) No person shall without his consent in writing be appointed guardian for the suit. (K).
(4) Where there is no other person fit and willing to act as guardian for the suit, (C, GAU, OR, P) the court may appoint any of its officers (D, HP, PU) to be such guardian and may direct that the costs to be incurred by such officer (D, HP, PU) in the performance of his duties as such guardian shall be borne either by the parties or by any one or more of the parties to the suit, or out of any fund in court in which the minor is interested, or out of the property of the minor and may give directions for the repayment or allowance of such costs as justice and the circumstances of the case may require. (A, AP, K, Knt, MP, M).
R. 5. Representation of minor by next friend or guardian for the suit--(1) Every application to the court on behalf of a minor, other than an application under rule 10, sub-rule (2), shall be made by his next friend or by his guardian for the suit, (2) Every order made in a suit or on any application, before the court in or by which a minor is in any way concerned or affected, without such minor being represented by a next friend or guardian for the suit, as the case may be, may be discharged, and, where the pleader of the party at whose instance such order was obtained knew, or might reasonably have known, the fact of such minority, with costs to be paid by such pleader."
27. It is clear from the above that "next friend" is defined as per rule 1 to be a person, who instituted a suit in the name of a minor. He has to be appointed by the court on an application filed before the court and should possess qualifications mentioned in rule 4. Where the minor is a defendant, the guardian for and on his behalf is to be appointed by the court. In every case, it is enjoined upon the court to protect the interest of the minor by invoking statutory powers vested in the court. Thus any person who is a major and is of sound mind and has no interest adverse to the minor can act as a next friend and institute a suit in the name of the minor. The guardian, on the other hand, is appointed for minor defendants. Under the Hindu Minority and Guardianship Act, there are different kinds of guardians, natural, appointed by the court, etc., etc., to protect the interests of a minor in respect of his person and property. The powers of such guardian are defined in the Act. There is no mention of "next friend'1 who is appointed only where a minor is plaintiff and has altogether a different purpose to serve.
28. In the present case, it is clearly mentioned in the plaint filed before the civil court that Shri Kishore Chand, maternal grandfather, has no interest adverse to the minors and is competent to file the suit on their behalf. Inadvertently, in place of "next friend" he is mentioned as "guardian" of the minors. But this mistake is not material and is irrelevant. The civil court, which under the law is bound to protect the interest of the minor, found the suit in order and decreed the same on December 14, 1976. Having regard to the aforesaid decree, the Assessing Officer, in my view, was not competent to raise any objection regarding the validity or competency of the suit instituted. The authorities under the Income-tax Act could not step into the shoes of the civil court and assume their jurisdiction to hold the suit as not validly instituted. Such authorities are bound by the decision of the civil court unless it is proved that the decision was obtained through a fraud, which is not the case here. Likewise, the observations that Shri Kishore Chand sought partition of the Hindu undivided family property are based on a misreading of the plaint and are totally unjustified. As pointed out by the learned Judicial Member, the suit was for a declaration of the rights of the minors already acquired by the minors on the partition through "panchayat" and not for partition of properties. Totally irrelevant issues were raised by the Assessing Officer.
29. The next question to be considered is the effect of the death of Shri Ved Parkash Loona under Section 6 of the Hindu Succession Act on the joint family. The divergent views of the two learned Members have been noted earlier. The matter has already been considered by the apex court, no useful purpose would be served in referring to the bare provisions of the statute. I would go straight to the ratio laid down in those decisions. In State of Maharashtra v. Narayan Rao Sham Rao Deshmukh [1987] 163 ITR 31, their Lordships considered the case of Gurupad Khandappa Magdum [1981] 129 ITR 440 (SC) and observed as under (at page 36) :
"We have earlier seen that females can be members of a Hindu joint family. The question now is whether a female who inherits a share in a joint family property by reason of the death of a male member of the family ceases to be a member of the family. It was very forcefully pressed upon us by the learned counsel for the respondents relying upon the decision of this court in Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum [1981] 129 ITR 440 ; [1978] 3 SCR 761, that there was a disruption of the family in question on the death of Sham Rao, as for the purpose of determining the interest inherited by Gangabai alias Taibai and Sulochanabai, it was necessary to assume that a notional partition had taken place immediately before the death of Sham Rao and carried to its logical end as observed in the above decision. Gangabai diets Taibai and Sulochanabai should be deemed to have become separated from the family. The facts of the above said case were as under. One Khandappa died .leaving behind his wife, Hirabai, two sons and three daughters after the coming into force of the Act. Hirabai filed a suit for partition and separate possession of 7/24ths share in the joint family property on the basis of Section 6 of the Act. She claimed that if a partition had taken place between her husband and her two sons immediately before the death of her husband, Khandappa, she, her husband and two sons would have each been allotted a one-fourth share in the family property and on the death of her husband the one-fourth share which would have been allotted in his favour had devolved in equal shares on her, her two sons and three daughters. Thus, she claimed the one-fourth share which had to be allotted in her favour on the notional partition and l/24th share (which was one-sixth of the one-fourth share of her husband), i.e., in all 7/24ths share. It was contended on behalf of the contesting defendant that she could not get the one-fourth share since actually no partition had taken place. Chandrachud C.J. rejected the said contention with the following observations at page 768 of SCR (page 447 of 129 ITR) :
'In order to ascertain the share of heirs in the property of a deceased coparcener, it is necessary, in the very nature of things, and as the very first step, to ascertain the share of the deceased in the coparcenary property. For, by doing that alone can one determine the extent of the claimant's share. Explanation 1 to Section 6 resorts to the simple expedient, undoubtedly fictional, that the interest of a Hindu Mitakshara coparcener "shall be deemed to be" the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death. What is, therefore, required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death. That assumption, once made, is irrevocable. In other words, the assumption having been made once for the purpose of ascertaining the share of the deceased in the coparcenary property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made that a partition had in fact taken place must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. To make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one's imagination to boggle. All the consequences which flow from a real partition have to be logically worked out, which means that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in the partition which had taken place during the lifetime of the deceased. The allotment of this share is not a processual step devised merely for the purpose of working out some other conclusion. It has to be treated and accepted as a concrete reality, something that cannot be recalled, just as a share allotted to a coparcener in an actual partition cannot generally be recalled. The inevitable corollary of this position is that the heir will get his or her share in the interest which the deceased had in the coparcenary property at the time of his death, in addition to the share which he or she received or must be deemed to have received in the notional partition.' We have carefully considered the above decision and we feel that this case has to be treated as an authority for the position that when a female member who inherits an interest in the joint family property under Section 6 of the Act files a suit for partition expressing her willingness to go out of the family, she would be entitled to get both the interest she has inherited and the share which would have been notionally allotted to her as stated in Explanation 1 to Section 6 of the Act. But it cannot be an authority for the proposition that she ceases to be a member of the family on the death of a male member of the family whose interest in the family property devolves on her without her volition to separate herself from the family. A legal fiction should no doubt ordinarily be carried to its logical end to carry out the purposes for which it is enacted but it cannot be carried beyond that. It is no doubt true that the right of a female heir to the interest inherited by her in the family property gets fixed on the death of a male member under Section 6 of the Act but she cannot be treated as having ceased to be a member of the family without her volition as otherwise it will lead to strange results which could not have been in the contemplation of Parliament when it enacted that provision and which might also not be in the interest of such female heirs. To illustrate, if what is being asserted is accepted as correct, it may result in the wife automatically being separated from her husband when one of her sons dies leaving her behind as his heir. Such a result does not follow from the language of the statute. In such an event, she should have the option to separate herself or to continue in the family as long as she wishes as its member though she has acquired an indefeasible interest in a specific share of the family property which would remain undiminished whatever may be the subsequent changes in the composition of the membership of the family. As already observed, the ownership of a definite share in the family property by a person need not be treated as a factor which would militate against his being a member of a family." (underlined* by me to emphasise).
30. On the basis of the above authorities of the apex court, it can reasonably be argued that on the death of a male coparcener where Section 6 of the Act is applicable, the interest and shares of members get specified and become "indefeasible", and would "remain undiminished whatever may be the subsequent changes in the composition of the membership of the family". The remaining members have the option to separate or continue as members of the family. In the present case, there is no evidence to suggest that any option was exercised by the members to separate from each other on the death of Shri Ved Parkash Loona. The claim for the partition in the case was further not based on notional partition. This is clear from the averments made in the application.
31. Apart from the above, there is another good ground for holding that there was no partition on the death of Shri Ved Parkash Loona. The said ground is the special requirement of Section 171 of the Income-tax Act. A "partition" under the Explanation to the said section means--
"(i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition ; or
(ii) where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not be deemed to be a partition ;"
32. Sub-sections (1) and (2) of the same section provide as under :
"171. (1) A Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family.
(2) Where, at the time of making an assessment under Section 143 or Section 144, it is claimed by or on behalf of any member of a Hindu family assessed as undivided that a partition, whether total or partial, has taken place among the members of such family, the Assessing Officer shall make an inquiry thereinto after giving notice of the inquiry to all the members of the family."
33. In the case of Kalloomal Tapeswari Prasad (HUF) v. CIT [1982] 133 ITR 690, the Supreme Court after considering the above provision observed as under (headnote) :
"Where there is no claim that a partition--total or partial--had taken place, or where it is made and disallowed, a Hindu undivided family which is hitherto being assessed as such will have to be assessed as such notwithstanding the fact that a partition had in fact taken place as per Hindu law.
Though under the Hindu law an item of property need not in every case be partitioned by metes and bounds or physically into different portions in order to effect a partition, and disruption of status can be brought about by one of several modes, income-tax law introduces certain conditions of its own to give effect to the partition under Section 171 of the Act, The Income-tax Officer can record a finding that a partition has taken place only if the partition in question satisfies the definition of the expression 'partition' found in the Explanation to Section 171. A transaction can be recognised as a partition under Section 171 only if, where the property admits of a physical division, a physical division of the property, has taken place. In such a case a mere physical division of the income without a physical division of the property producing the income cannot be treated as a partition. Even where the property does not admit of a physical division, such division, as the property admits of, should take place to satisfy the test of a partition under Section 171. Mere proof of severance of status under Hindu law is not sufficient to treat such a transaction as a partition. If a transaction does not satisfy the above additional conditions, it cannot be treated as a partition under the Income-tax Act even though under Hindu law there has been a partition--total or partial."
34. It is difficult to dispute that in the notional partition provided in Section 6 of the Hindu Succession Act, no physical division can take place as envisaged in Section 171 of the Act. Therefore, no claim for recording a finding of partition can be made. The Income-tax Officer has no powers to record a finding of partition unless a claim by or on behalf of any member of a Hindu family is made. In the circumstances of the case, when the claim of partition was not made with reference to Section 6 of the Hindu Succession Act, it was unnecessary to go into the above aspect.
35. The next question required to be considered is the validity of the family arrangement arrived through "relatives and panchayat in the month of September, 1974" whereby joint family properties were amicably partitioned between the members. The properties which were mentioned in the plaint and for which a declaration of ownership was sought, were claimed to have been allotted to the minor plaintiffs. The suit was decreed by the civil court on December 14, 1976. The learned Judicial Member accepted the factum and validity of the partition as a family arrangement arrived through the panchayat of relatives. To the learned Accountant Member the suit before the Sub-Judge, Muktsar, appeared to be collusive.. In his view, the competency of Lala Kishore Chand to file the suit should be examined afresh. He further observed, "it has to be seen as to what is the validity of a family arrangement seeking to partition the property which may have been brought about by the panchayat of relatives in September, 1974, in this case." It is clear that only the validity of partition through family arrangement was doubted by the learned Accountant Member and not its factum.
36. After going through the relevant material, I am of the view that the facts of the present case were not properly appreciated by the learned lower authorities. No question of the claim of partition by minor coparceners or on their behalf by their grandfather in the civil suit or otherwise is involved. The partition of the joint family was claimed to have been effected through a family arrangement in which relatives (of the family described as panchayat also) intervened and different properties were allotted to different members. The minor plaintiffs and defendants were allotted properties detailed in the suit. However, subsequently, defendant No. 1, Smt. Sumitra Devi, denied the partition and, therefore, the suit in the civil court was instituted. The suit was not for partition of joint family properties as wrongly understood by the Assessing Officer. It was for mere declaration of title over which a cloud was cast on account of denial of partition by Smt. Sumitra Devi. Lala Kishore Chand was fully competent to file such a suit and act as next friend of the minor plaintiffs. The suit was found to be in order and decreed by the civil court. Having regard to the exclusive jurisdiction of the civil court to decide questions of title, the authorities under the Income-tax Act were not entitled to go into any of the questions covered by the decree of the civil court. The decree passed was binding on them.
37. In the present case, the implication and effects of a family arrangement under the Hindu law have not been properly understood. In the case of Kale v. Dy. Director of Consolidation, AIR 1976 SC 807, their Lordships of the Supreme Court, after considering several earlier decisions of the apex court held that a bona fide arrangement, voluntarily entered into to resolve family disputes is required to be given effect to by courts. Such a family arrangement need not be in writing and does not require registration. For purposes of record, mutation, etc., a memorandum of such arrangement may be prepared. The court further observed (at page 815):
"Thus, it would appear from a review of the decisions analysed above that the courts have taken a very liberal and broad view of the validity of the family settlement and have always tried to uphold it and maintain it. The central idea in the approach made by the courts is that if by consent of parties a matter has been settled, it should not be allowed to be reopened by the parties to the agreement on frivolous or untenable grounds."
38. In the present case, the defendants, i.e., the mother and sisters of the plaintiffs, accepted the claim of the plaintiffs. It is thus an admitted position that all the members of the joint family by an arrangement through the intervention of the panchayat, effected partition of the joint family properties. No material on record is available to show that the family arrangement was not arrived at bona fide. As per the authoritative pronouncement of the Supreme Court, the court was required to take a liberal and broad view of the validity of the family arrangement and give assent to it, rather than avoid it. This is what exactly the civil court did by decreeing the suit. However, the Revenue authorities doubted such an arrangement and rejected the claim. The rejection of the claim, in the circumstances of the case, in my view, is based upon "frivolous and untenable" grounds and is totally unjustified. After the decree of the civil court, no further question is required to be examined. The Assessing Officer was required to record a finding affirming the partition under Section 171 of the Income-tax Act.
39. For the aforesaid reasons, I agree with the order proposed by the learned Judicial Member. The appeal should now go back to the regular Bench for disposal, in accordance with law.