Document Fragment View
Fragment Information
Showing contexts for: devolved in Commissioner Of Wealth-Tax, Andhra ... vs Mukundgirji on 22 February, 1983Matching Fragments
1. The question of law referred in this case is :
"Whether, on the facts and in the circumstances of the case, the properties devolved on the assessee on his father's death are assessable in the status of 'individual' or in the status of Hindu undivided family'?"
2. The answer to this question depends upon the meaning and effect of s. 8 of the HIndu Succession Act, 1956. The assessee, Mukundgirji, belongs to a secular sect, viz., Dinggles Gosavees, governed by customary law relating to succession. According to this custom, each guru nominates his successor. The Guru is the head of the math and is the sole and absolute owner of all the properties belonging to the math. The assessee's grandfather, Maheshgirji, who was the Guru in his lifetime, nominated by his will dated November 20, 1946, one of his grandsons, viz., Ghanshamgirji as his successor-Guru. Thereby he bypassed his son, Chaturgirji, who had three sons, viz., Chandrabhangirji, Mukundgirji and Ghanshamgirji, Maheshgirji died on January 30, 1949. His will was not probated. Chaturgirji filed a suit in the City Civil Court, Hyderabad, consisting the will and claiming the guruship in himself. A compromise was arrived at in this suit whereunder Ghanshamgirji renounced his guruship in favour of his father, Chaturgirji. Certain business assets and properties left by Maheshgirji were divided amongst Chaturgirji and his three sons on 31-10-1951. In respect of two business assets, a partnership was formed consisting of the father and three sons and the income from this firm was assessed individually in the hands of each of the partner. Chaturgirji died on December 24, 1956, intestate. The properties left by him were divided equally by his three sons. For wealth-tax purposes, the properties which devolved upon the assessee on the death of his father were assessed as his individual properties. But from the assessment year 1967-68 onward, the assessee did not include these properties in his individual wealth-tax return. Instead, he filed a separate return for these properties in the status of "Hindu undivided family" on the ground that the assets in question were ancestral properties which consisting of himself and his sons. The WTO did not accept this contention and included these properties also in the personal net wealth of the assessee. On appeal, the AAC accepted the assessee's contention and deleted these properties from the personal wealth of the assessee. The appeal preferred by the Department to the Tribunal was dismissed where upon the Revenue applied for and obtained this reference under s. 27(1) of the W. T. Act.
4. For a proper application of the question at issue, it is necessary, in the first instance, to ascertain the position in Hindu law obtaining prior to the enactment of the Hindu Succession Act. According to the Mitakshara school, which is the law governing this State and the assessee herein, the property (i.e., separate or self-acquired property) of a Hindu dying intestate, devolved upon his son-of course, the son of the son, whether born before the death of the grandfather or later, had a right in this property, by birth. It did not matter whether these properties were obtained (by the grandfather) on a partition with his father/brother/son, or whether they were obtained under a will or a gift, or whether acquired by his own skill and exertions. In all these cases, the properties constituted his separate or self-acquired properties, as they may be called. On his death, they devolved upon his son. But, because these properties constituted ancestral properties in the hands of the son, the grandson had a share in those properties by birth-whether he was born before the death of the grandfather, or thereafter. In other words, in the hands of the son, these properties constituted HUF properties vis-a-vis the grandson(s).
12. It is relevant to notice that class I of the Schedule mentions the son but not son's son. The son of a predeceased son is mentioned but not the son of a son who is alive. It is true that this was also the position even prior to the Hindu Succession Act; but what makes the difference is the following features : (a) section 4(1) (a) declares that with respect to any matter for which provision is made by this Act, any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the commencement of the Hindu Succession Act shall cease to have effect; (b) class I contains not only male members but also female members; and (c) according to s. 19, if two sons succeed to the estate of their father under s. 8, they take the property as tenants-in-common and not as join tenants. We shall elaborate. A look at the Hindu Succession Act would disclose that Parliament wanted to make a clean break from the old Hindu law in certain respects consistent with modern and egalitarian concepts. For the sake of removal of any doubts, therefore, s. 4(1) (a) declared that, in so far as a matter is provided for by the Act, one should lot only to the Act but not to the pre-existing Hindu law. It would, therefore, be not consistent with the spirit and object of the enactment to seek to strain the provisions of the Act to accord with the prior notions and concepts of Hindu law. That such a course is not possible is made clear by the inclusion of the females in class I of the Schedule. To hold to-day that the property which devolves upon a Hindu under s. 8 of the Act would be HUF property in his hands vis-a-vis his own sons would amount to creating two classes among the heirs mentioned in class I, viz., the male heirs in whose hands it would be joint family property vis-a-vis their sons; and female heirs with respect to whom no such concept can be applied or contemplated. The intention to depart from the pre-existing Hindu law is again made clear by s. 19 which says that two or more heirs succeeding together to the property of an intestate shall take the property as tenants-in-common and not as joint tenants. According to Hindu law as it obtained prior to the Hindu Succession Act, two or more sons succeeding to their father's property took it as join tenants but not as tenants-in-common. The Act has, however, chosen to provide expressly that they shall take as tenants-in-common. Accordingly, were are of the opinion that the properties which devolve upon a heir mentioned in class I of the Schedule under s. 8 constitute his absolute properties, and that his sons have no right by birth in such properties and cannot, therefore, claim any share or sue for partition of such properties.
16. The only other court which has taken a contrary view is the Gujarat High Court in CWT v Harshadlal Manilal , and more elaborately in CIT v. Dr. Babubhai Mansukhbhai . The ratio of the Gujarat High COurt's view is to be found in the following passage occurring at pp. 421 and 422. DIvan C.J., speaking for the court, said :
"It will be noticed that both section 6 and section 30 deal with the undivided share of a Hindu in Mitakshara coparcenary property. They do not deal with his individual self-acquired property. Therefore, it is obvious that what has been provided for in section 6 and section 30 of the Hidu Succession Act, can in no way affect the character of the property in the hands of the son when the son gets the property by inheritance from his own father. Neither section 6 nor section 30 deals with such a situation. Under section 8 of the Act it has been provided that the property of a male Hindu dying intestate shall devolve according to Chapter II upon the heirs, being the relatives specified in class I of the Schedule. If there is no heir of class I, then upon the heirs, being the relatives specified in class II of the Schedule; and if there is no heir of any of the two classes, then upon the agnates of the deceased and if there is no agnate, then upon the cognates of the deceased. The result, therefore, is that so far as the property is concerned, it devolves according to the provisions of the chapter in which section 8 is located but that does not again deal with the character of the property in the hands of the person to whom the property devolves by succession. With respect to the learned judges of the Allahabad High Court, it is impossible to read into the words of section 8 any provision which interferes with the scheme of Hindu law as it prevailed prior to the enactment of the Hindu Succession Act. Neither section 6 nor section 8 nor section 30 affect this principle of Hindu law as to in what capacity or in what character the son would enjoy the property once he received it from his father in succession."