Kerala High Court
Dy. Commissioner Of Agricultural ... vs R.S. Chidambaram on 29 June, 1993
Author: K.S. Paripoornan
Bench: K.S. Paripoornan
JUDGMENT K.S. Paripooranan, J.
1. The Revenue is the petitioner in this batch of four revisions. The same assessee is the respondent in all the revisions. The revisions are filed against the common order passed by the Kerala Agricultural Income-tax Appellate Tribunal, Additional Bench, Palakkad, in A. I. T. A. Nos. 26, 27, 28 and 29 of 1983, dated June 19, 1991. The assessment years involved are 1976-77, 1978-79, 1979-80 and 1980-81. Common questions arise for consideration only for the last three years--1978-79, 1979-80 and 1980-81. The revision filed for the assessment year 1976-77 (T. R. C. No. 5 of 1992) does not really merit consideration as the Revenue is not aggrieved.
2. The respondent, Sri R.S. Chidambaram, is an assessee to agricultural income-tax. He submitted the returns for all the four years in the status of "individual". The Agricultural Income-tax Officer assessed him accordingly. In the appeal filed for the assessment year 1976-77, the respondent did not dispute the status before the Appellate Assistant Commissioner. The appeal was dismissed. The Tribunal found that the Revenue was not aggrieved by the order and the question that arose for consideration in the other years did not arise for consideration for the assessment year 1976-77. So, the appeal filed by the Revenue before the Agricultural Income-tax Appellate Tribunal was dismissed in limine, holding that the Department was not aggrieved by the order of the Appellate Assistant Commissioner (paragraph 4 of the common order). T. R. C. No. 5 of 1992 is filed by the Revenue for the assessment year 1976-77 against the common order of the Appellate Tribunal dated June 19, 1991. We are of the view that T. R. C. No. 5 of 1992 is incompetent and unnecessary, since the Revenue is not aggrieved either by the order of the Appellate Tribunal or by the order passed by the first appellate authority. We hold so. We dismiss T.R.C. No. 5 of 1992 as incompetent and unnecessary.
3. The question in controversy in the other three revisions is regarding the status to be assigned to the respondent/assessee. For all the four years, the respondent/assessee submitted the returns in the status of "individual". The assessments for the years 1978-79, 1979-80 and 1980-81 were modified by the Appellate Assistant Commissioner as per his common order dated May 4, 1982. The assessee assailed the assessments relying on the Kerala Hindu Joint Family System (Abolition) Act, 1975, and claimed that his wife is entitled to half share of the property held by him and so he is liable to be assessed for the agricultural income from half of the property held by him. This was accepted by the Appellate Assistant Commissioner. A direction was given to the assessing authority to exclude one-half of the income due to the assessee's wife. The status of "individual" was retained. In second appeals for the above three years, the Appellate Tribunal held that the status to be assigned to the assessee is tenants-in-common and only half of the property will be due to the respondent/assessee and the other half belongs to his wife and the assessment should be so effected. This part of the order assigning the status of "tenants-in-common" and directing only half share of the total agricultural income to be brought to tax in the hands of the respondent/assessee is assailed in the three revisions filed for the assessment years 1978-79, 1979-80 and 1980-81.
4. We heard counsel for the Revenue, Senior Government Pleader, Sri V.C. James, as also counsel for the respondent/assessee, Mr. P. Balachandran.
5. A few fundamental facts are relevant for the purpose of adjudicating the controversy in these three revisions--T. R. C. Nos. 6, 7 and 8 of 1992. Admittedly, the respondent/assessee, his brother, and father, Sri R.S. Subramannia Iyer constituted the Hindu joint family and they partitioned the properties as per registered document No. 401 of 1960 of the Sub-Registrar's office, Alathur. The B schedule properties were allotted to the assessee. Thereafter the assessee constituted a joint family consisting of himself, his wife and his only son. This joint family also partitioned the properties as per registered deed No. 156 of 1975 dated March 29, 1975, of the Sub-Registrar's Office, Alathur. The properties were partitioned between the respondent/assessee and his only son. Thereafter, the assessee filed the returns in the status of "individual". After March 29, 1975, the joint family consisted of the assessee and his wife. There was no other male member. The Kerala Hindu Joint Family System (Abolition) Act, 1975, came into force with effect from December 1, 1976. The plea of the assessee was that on that day the joint family consisted of two members, the assessee and his wife, and by the operation of Section 4(2) of the said Act, the assessee's wife is entitled to one-half share and the assessee can be assessed only as "tenants-in-common" for the other half of the property. It was common ground that it is the ancestral joint family property obtained by the respondent/assessee in the partition between himself, his brother and father by partition deed No. 401 of 1960 which was again partitioned between the respondent and his only son by partition deed No. 156 of 1975, dated March 29, 1975. After the later partition, the assessee was the sole male member in the family. The Revenue took up the plea that the property so held by the respondent/assessee is his separate property. There was no joint family or joint family property on the date when the Kerala Hindu Joint Family System (Abolition) Act came into force on December 1, 1976. The daughter of the respondent/assessee was married away in the meanwhile. The Appellate Tribunal negatived the plea of the Revenue that the property held by the respondent/assessee obtained as per the partition deed dated March 29, 1976, between himself and his son should be considered to be separate property of the respondent/assessee, but held that it will be considered to be joint family property. And in view of the Kerala Hindu Joint Family System (Abolition) Act, 1975, in particular Section 4(2) thereof, the property obtained on partition should be deemed to be held as "tenants-in-common" by the respondent and his wife--the joint family that existed after the partition. The individual shares of the respondent and his wife are not separated by making partition by metes and bounds and so they can be assessed as "tenants-in-common" and the total agricultural income from the property allotted to the respondent/assessee as per the partition deed dated March 29, 1975, is to be divided between the assessee and his wife and the share of total agricultural income due to each of the tenants is to be subjected to tax under the Agricultural Income-tax Act.
6. The properties which have become the subject-matter of assessment are properties obtained under an original partition between the respondent/assessee, his brother and father as per registered document No. 401 of 1960 of the Sub-Registrar's Office, Alathur. The properties so obtained by him were again partitioned between the respondent/assessee and his son as per the registered deed dated March 29, 1975. On that day there was no male member or coparcener in the family. The crux of the matter is what is the nature of the property so obtained by the respondent/assessee in the partition between himself and his son ? The family thereafter consisted of only the respondent and his wife with no other male member, and what is the effect of the Kerala Hindu Joint Family System (Abolition) Act which took effect from December 1, 1976, and its impact oh the property obtained by the respondent as per the partition deed dated March 29, 1975 ? These are the crucial questions that arise for consideration.
7. The Agricultural Income-tax Appellate Tribunal, on the above facts, held that though the appellant's (assessee's) wife is not entitled to any share in the family properties, Section 4(2) of the Kerala Hindu Joint Family System (Abolition) Act, which came into force on December 1, 1976, confers a right on her to share the properties obtained by the respondent on partition between himself and his only son and the wife is entitled to one-half share. It cannot be said that the property so obtained by the respondent on the partition aforesaid is not joint family property. The claim of the Revenue that the property obtained by the respondent is his separate property was not accepted. So, it was held that the respondent and his wife constituted a joint Hindu family even after the partition in 1975. The respondent and his wife will hold it as tenants-in-common and each of them will be assessed on a half share of the income. The status to be assigned is tenants-in-common. These are the findings of the Appellate Tribunal.
8. We are of the view that the Agricultural Income-tax Appellate Tribunal has wholly misunderstood the nature of the property obtained by the respondent as per the partition deed dated March 29, 1975. It is true that the properties so partitioned were obtained by the respondent/assessee in a partition between himself, his brother and his father. They were ancestral properties. Even so, the property allotted or obtained by the respondent in the partition between himself and his only son, with no other male member in the joint family then, will be his separate property. In Maine's Hindu Law and Usage, 13th edition, 1991--paragraph 303--page 575, the law is stated with admirable brevity, as follows :
"An examination into the property of the joint family would not be complete without pointing out what property may be held by the individual members as their separate property. All property which is not held in coparcenary is separate property and Hindu law recognises separate property of individual members of a coparcenary as well as of separated members. (1) Property which comes to a man as obstructed heritage (Saprati bandhadaya) is his separate property. It is not self-acquired property within the meaning of Hindu law, though in their incidents, there may be no difference between the two species. In Muttayan Chetty v. Sangili [1883] 9 IA 128, the Privy Council concurred with the Madras High Court in holding that inherited property was not self-acquired property. (2) Property may be self-acquired ; such self-acquisition may be made by any one while even in a State of Union. (3) Property which a man takes at a partition will be his separate property as regards those from whom he has severed but will be ancestral property as regards his own male issue. (4) So too, family property vested in the last surviving male member of a coparcenary will be his separate property subject to its becoming at any moment coparcenary property when he has male issue or when an adoption is made to him or to a predeceased coparcener in the family, and subject to the right of maintenance of the other female members of the family. ..."
9. Mutta on Hindu Law, 16th edition, 1990, at page 248, paragraph 223, sub-paragraph (4), states the law thus :
"The share which a coparcener obtains on partition of ancestral property is ancestral property as regards his male issue. They take an interest in it by birth, whether they are in existence at the time of partition or are born subsequently. Such share, however, is ancestral property only as regards his male issue. As regards other relations, it is separate property, and if the coparcener dies without leaving male issue, it passes to his heirs by succession."
10. In N.R. Raghavachariar's Hindu Law, Principles and Precedents, 8th edition, 1987, at page 222, paragraph 260, the law is stated thus :
"The share in the ancestral estate which a coparcener gets on partition with his co-sharers is his separate property as against the coparceners from whom he separates (Bijai Bahadur v. Bhupinder [1895] 17 All 456 ; 22 IA 139), though as against his own male issue who are born after partition or who were born before but who do not get themselves separated from him the property has still the character of ancestral property in which they take an interest by birth."
11. In Hindu Law by S. V. Gupte, 3rd edition (1981), Vol. I, at page 120, paragraph 28, the law is stated thus :
"Where the dividing coparcener has male issue in existence at the time of partition and the partition takes place between him and some or all of them, then the share allotted to him is in his hands ancestral only as regards those who are still undivided with him and those yet to be born but not as regards those who have separated from him, for on partition they would receive shares for themselves. Where the dividing coparcener has no male issue in existence at the time, there is nothing to prevent him from dealing with the share as he is the absolute owner thereof ; but the birth later of a son, grandson or a great-grandson will immediately put fetters on his right to deal with it or so much of it as is still undisposed of."
12. It is evident from a perusal of the above statement of the law that the property obtained by the respondent/assessee in the partition between himself and his only son is his separate property. He could deal with it in any way he likes. It will be joint family property only if a son is born subsequently or an adoption is made. Such is not the case herein. It may be that on the day when the partition was effected between the respondent and his son, i.e., on March 29, 1975, the wife of the respondent was alive and they constitute a unit. But, the crucial question is whether the respondent's wife, the only other member in the family or unit, had any right in the said separate property. Admittedly, she is not a coparcener. She is, if at all, only a female member of the family. She is not entitled to claim partition. She is not entitled to any property. After the partition dated March 29, 1975, even if there was a continuance of the joint family, the members thereof were the respondent and his wife. There was no male member. The sole surviving member (copercener) held the property obtained by him on partition as his separate property. The assessee's wife is not entitled to any share in the property on the day when the Kerala Hindu Joint Family System (Abolition) Act came into force on December 1, 1976.
13. We are of the view that the plea of the Revenue, that the property held by the respondent is his separate property obtained as per the partition deed dated March 29, 1975, and the wife is not entitled to half share in the property, is correct. It is not a joint family property. The observation to the contrary by the Agricultural Income-tax Appellate Tribunal is erroneous in law and failed to give effect to the position in law as stated by innumerable decisions which formed the basis for enunciation of the law by leading text book writers, Messrs. Mayne, Mulla, Raghavachariar, Gupte, etc., adverted to above. We hold that on the day when the Kerala Hindu Joint Family System (Abolition) Act came into force, i.e., on December 1, 1976, the respondent's wife had no interest in the property held by the respondent/assessee. The wife had no claim to partition of the property held by the respondent. The property held by the respondent was not joint family property on the day when the Act came into force. It was only a separate or individual property of the respondent. The Appellate Tribunal was in error in holding that the respondent/assessee was holding any joint family property on the day when the Act came into force or that he should be deemed to hold it as tenants-in-common or that he can be assessed only on the half share of income due to him. The above findings are clearly erroneous in law.
14. We hold that the respondent/assessee was holding the property obtained by him in the partition dated March 29, 1975, as his separate property and was holding so on the day when the Act came into force, i.e., on December 1, 1976. He was owning the property as his separate property or individual property. The entire income should be assessed only in his hands and as individual. The Appellate Tribunal erred in holding that the status to be assigned to the respondent is "tenants-in-common" or that he could be assessed only on half share of the income from the said property. The respondent should be assessed in the status of "individual" on the entirety of the income obtained by him from the property as per the partition deed dated March 29, 1975. We hold so.
15. We are of the view that the clear position in law as stated in the text books, which we have extracted hereinabove, is not in any way neutralised or otherwise departed from, in the decisions brought to our notice by the respondent's counsel, viz., Gowli Buddanna v. CIT [1966] 60 ITR 293 (SC) ; N.V. Narendranath v. CWT [1969] 74 ITR 190 (SC) ; C. Krishna Prasad v. CIT [1974] 97 ITR 493 (SC) and Surjit Lal Chhabda v. CIT [1975] 101 ITR 776 (SC). Those decisions were rendered on their own special facts and are distinguishable.
16. The common order of the Appellate Tribunal dated June 19, 1991, militating against the above legal position is hereby set aside. The matter is remitted to the Appellate Tribunal, for the assessment year 1978-79, 1979-80 and 1980-81, for passing appropriate orders in accordance with law and in the light of the observations contained hereinabove.
17. T. R. C. No. 5 of 1992 is dismissed. T. R. C. Nos. 6, 7 and 8 are allowed to the extent indicated hereinabove.