Assessee and her two daughters inherited in their individual capacity one-third share each in the estate of deceased who had died intestate—They were not capable of forming an HUF among themselves or of throwing the interest of any one of them in the inherited property therein
Supreme court in the case of CIT Vs. Smt Sandha Rani Dutta has observed as under:
The concept of Hindu females forming a joint Hindu family by agreement amongst themselves appears to be contrary to a basic tenet of the Hindu personal law. The principal question here is the capacity of Hindu females to form among themselves an HUF. No authorities to support this are brought to notice; indeed they cannot be, for the concept appears to be alien to the Hindu personal law which requires the presence of a male for the purposes of the constitution of an HUF.
The assessee and her two daughters inherited in their individual capacity a one-third share each in the estate of the deceased.
There is no authority which can lead to the conclusion that the assessee and her two daughters were capable of forming a joint Hindu family or of throwing the interest of any one of them in the inherited property therein.
The concept of Hindu females forming a joint Hindu family by agreement amongst themselves appears to be contrary to a basic tenet of the Hindu personal law.—CIT vs. Smt. Sandhya Rani Dutta (1995) 128 CTR (Pat) 462 : (1996) 217 ITR 36 (Pat) : TC 37R.149 set aside; CWT vs. Gauri Shankar Bhar 1972 CTR (SC) 95 : (1972) 84 ITR 699 (SC) : TC 65R.585 explained; Gowli Buddanna vs. CIT (1966) 60 ITR 293 (SC) : TC 37R.121, Surjit Lal Chhabda vs. CIT 1976 CTR (SC) 140 : (1975) 101 ITR 776 (SC) : TC 37R.132 and Pushpa Devi vs. CIT 1977 CTR (SC) 348 : (1977) 109 ITR 730 (SC) : TC 37R.168 applied; CIT vs. Sarwan Kumar (1945) 13 ITR 361 (All) : TC 37R.27 and CIT vs. Veoroppa Chottiar (1970) 76 ITR 467 (SC) distinguished.
The court concluded that an HUF could not be constituted in respect of properties inherited by the female heirs of a Hindu governed by the Dayabhaga School dying intestate, by throwing an ascertained share into the hotchpot by agreement.
The copy of the order is as under:
COMMISSIONER OF INCOME TAX vs. SMT. SANDHYA RANI DUTTA
S.P. Bharucha, N. Santosh Hegde & Y.K. Sabharwal, JJ.
Civil Appeal Nos. 5450 & 5451 of 1997
(2001) 166 CTR 0208 : (2001) 248 ITR 0201 : (2001) 115 TAXMAN 0369
Legislation Referred to
Case pertains to
Decision in favour of:
Revenue
Cases referred:
CWT vs. Gouri Shankar Bhar (1968) 68 ITR 345 (Cal) : TC 65R.586
Counsel appeared:
M.L. Verma with Rajiv Tyagi, B.V.B. Das for Mrs. Sushma Suri, for the Appellant : B. Sen with Prakash Shrivastava & Ms. Pradipti Shrivastava (Amicus curiae), for the Respondent
From the judgment and order dt. 9th Aug., 1995 of the Patna High Court in T.C. Nos. 70 and 71 of 1980, reported as CIT vs. Smt. Sandhya Rani Dutta (1995) 128 CTR (Pat) 462 : (1996) 217 ITR 36 (Pat) : TC 37R.149
Judgment
These appeals arise from a judgment delivered by the High Court at Patna (Ranchi Bench) on an income-tax reference at the instance of the Revenue. The three questions the High Court was called upon to consider read thus :
“(i) Whether, on the facts and in the circumstances of the case, female heirs of a Hindu governed by the Dayabhaga School of Hindu Law dying intestate could form a joint Hindu Family by means of agreement ?
(ii) Whether female heirs of a Hindu governed by the Dayabhaga School of Hindu law dying intestate could impress upon their inherited property the character of joint family property ?
(iii) Whether, on the facts and in the circumstances of the case, one-third of the properties inherited from her husband was assessable in the hands of the assessee in the status of individual ?”
The High Court answered the first and second questions in the affirmative and in favour of the assessee and the third question in the negative and against the Revenue.
2. The brief facts leading to the reference are these : One Har Govind Dutta, a Hindu governed by the Dayabhaga School of Hindu Law, died intestate on 19th June, 1972, leaving behind his widow (the assessee-respondent) and two daughters, Priya Dutta and Keya Dutta. That the assessee and the two daughters inherited the self-acquired properties of the deceased in equal shares is not in dispute. The assessee and the two daughters entered into an agreement on 26th July, 1972. Thereby they claimed to form an HUF and the assessee threw her share of the inherited property into the kitty of this HUF. Accordingly, for the asst. yrs. 1974-75 and 1975-76 the assessee did not disclose in her income-tax returns any income from her share of the inherited property.
The ITO rejected the assessee’s contention that her share of the inherited property had been thrown into the kitty of an HUF and he held that she was liable to income-tax in respect of the income therefrom. Her appeal was rejected by the AAC. She went up before the Tribunal, which reversed the view of the taxing authorities. From out of the judgment of the Tribunal the questions aforestated were referred to the High Court. The High Court, relying principally upon the judgment of this Court in CWT vs. Gauri Shankar Bhar 1972 CTR (SC) 95 : (1972) 84 ITR 699 (SC) : TC 65R.585 came to the conclusion that there was no bar to the constitution of an HUF in respect of properties inherited by the heirs, whether female or male of a Hindu governed by the Dayabhaga School dying intestate by throwing an ascertained share into the hotchpot by agreement.
3. The High Court was in error in its reading of the judgment of this Court in the case of Gauri Shankar Bhar (supra). This Court held, in view of the concession that each one of the heirs of a deceased governed by the Dayabhaga School took a definite share in the property left by him, that it was not necessary to decide whether a Dayabhaga Hindu family could be considered an HUF within the meaning of s. 3 of the WT Act, 1957. It held that, on the facts of the case, the heirs had taken the property of the deceased in separate shares; therefore, in law, each of them was liable to pay wealth-tax as individuals. It could not be said that an individual who inherited some property from someone became an HUF merely because he was a member of an HUF. There is, therefore, nothing in the judgment in Gauri Shankar Bhar’s case (supra) support the view taken by the High Court.
4. In Gowli Buddanna vs. CIT (1966) 60 ITR 293 (SC) : TC 37R.121 this Court held that there might be a joint Hindu family consisting of a single male member and the widows of deceased coparceners. The plea that there had to be at least two male members to form an HUF as a taxable entity was found to have no force. Implicit in this is the conclusion that at least one male member is necessary for the purposes of the formation of an HUF.
5. In Surjit Lal Chhabda vs. CIT 1976 CTR (SC) 140 : (1975) 101 ITR 776 (SC) : TC 37R.132 it was held by this Court that a joint Hindu family, with all its incidents, is a creature of law and cannot be created by the act of parties, except to the extent to which a stranger may be affiliated to the family by adoption.
6. This Court in Pushpa Devi vs. CIT 1977 CTR (SC) 348 : (1977) 109 ITR 730 (SC) : TC 37R.168 held that it was a fundamental notion governing a joint Hindu family that a female member of the joint family cannot blend her separate property, even if she is the absolute owner thereof, with joint family property. This judgment covered a case where there was already a joint family in existence and held that, even so, a female cannot blend her absolute property therewith. The ratio applies as much when a female purports to create by agreement with other females an HUF and blends the property of her absolute ownership therewith.
7. The assessee-respondent has not put in an appearance. Since a question of law was involved, we had requested Mr. B. Sen to assist us, which he has very kindly done. He has drawn our attention to the judgment of the Calcutta High Court in CWT vs. Gouri Shankar Bhar (1968) 68 ITR 345 (Cal) : TC 65R.586, which judgment was considered by this Court in Gouri Shankar Bhar’s case (supra) Mr. Sen drew our attention to the observation therein that under the Dayabhaga School a joint family amongst brothers was a creation not of law but of a desire to live jointly, it originated in fact and not by legal fiction. He drew our attention also to the observation that a joint family could, in relation to persons governed by the Dayabhaga School, come into existence only by an act of volition on the part of the heirs, such as an agreement to live, mess and worship jointly.
8. The principal question that we are concerned with here is the capacity of Hindu females to form among themselves an HUF. No authorities to support this are brought to our notice; indeed they cannot be, for the concept appears to us to be alien to the Hindu personal law which requires the presence of a male for the purposes of the constitution of an HUF.
9. It is appropriate, however, to note the two judgments cited by the Tribunal in its order which it thought supported the assessee’s case. The Tribunal stated that it had been observed by the Allahabad High Court in CIT vs. Sarwan Kumar (1945) 13 ITR 361 (All) : TC 37R.27 that “there can be an HUF consisting of female members only.” We have seen that judgment and we find that that is not the conclusion of the High Court. What it said was, “It follows that on the disappearance of the last male member, the other members of the family, though not coparceners, continue to be members of an HUF.” What was held, therefore, was that on the death of the sole male member of an HUF, the ladies who were members thereof could continue with that status. The Tribunal also cited the judgment of this Court in CIT vs. Veoroppa Chottiar (1970) 76 ITR 467 (SC). The Tribunal rightly noted that this Court had there held that so long as the property which was originally of a joint Hindu family remained in the hands of the widows of the members of the family and was not divided among them, the joint family continued. The conclusion that the Tribunal drew from this was erroneous, namely. “Thus according to the Supreme Court also only females can also form a joint Hindu family.”
10. In the present case, as aforestated, the assessee and her two daughters inherited in their individual capacity a one-third share each in the estate of the deceased. We have no authority before us which can lead us to the conclusion that the assessee and her two daughters were capable of forming a joint Hindu family or of throwing the interest of any one of them in the inherited property therein. As we have stated, the concept of Hindu females forming a joint Hindu family by agreement amongst themselves appears to us to be contrary to a basic tenet of the Hindu personal law.
Accordingly, the questions are answered thus :
Question (i)—in the negative and in favour of the Revenue.
Question (ii)—in the negative and in favour of the Revenue.
Question (iii)—in the affirmative and in favour of the Revenue.
11. We repeat our gratitude to Mr. Sen for his assistance.
12. The appeals are allowed.
No order as to costs.
