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S. Venka Reddy Vs. Commissioner of Income-tax, Andhra Pradesh-ii, Hyderabad - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberReferred Case No. 3 of 1981
Judge
Reported in[1986]157ITR489(AP)
ActsFinance Act, 1977
AppellantS. Venka Reddy
RespondentCommissioner of Income-tax, Andhra Pradesh-ii, Hyderabad
Appellant AdvocateS. Dasaratharama Reddy, Adv.
Respondent AdvocateM. Suryanarayana Murthy, Adv.
Excerpt:
direct taxation - assessment - finance act, 1977 - tribunal's order assessing hindu undivided family (huf) at higher rate as prescribed in finance act challenged - contention that income of females did not come within its purview turned down - every joint family having any member whether male or female deriving income in excess of minimum specified in finance act subject to tax at rates specified in finance act - expression 'member' in finance act includes both male and female members of family - held, application of higher rates of tax justified. - - appeals filed by the assessee against the assessment did not succeed before the appellate assistant commissioner as well as the income-tax appellate tribunal......in holding that the word 'member' occurring therein takes in a female member of, a mitakshara hindu undivided family and, therefore, the assessee-hindu undivided family is rightly assessed to tax at the higher rate prescribed in the said finance act ?' 2. the assessee is a hindu undivided family. the income-tax officer determined the total income of the joint family and also determined the income-tax payable in accordance with sub-para. ii, part i of schedule i to the finance act. it is provided in sub-para. ii that in the case of every hindu undivided family which at any time during the previous year has at least one member, whose total income of the previous year relevant to the assessment year under consideration exceeds the amount therein mentioned, income-tax is leviable at the.....
Judgment:

Y.V. Anjaneyulu, J.

1. This reference is made by the Income-tax Appellate Tribunal at the instance of the assessee under section 256(1) of the Income-tax Act, 1961. The following question of law is referred for the opinion of this court :

'Whether, on the facts and in the circumstances and on a correct interpretation of Part IA of Paragraph A of the Schedule to the Finance Act read with the relevant provisions of the Income-tax Act, the Tribunal is correct in holding that the word 'member' occurring therein takes in a female member of, a Mitakshara Hindu undivided family and, therefore, the assessee-Hindu undivided family is rightly assessed to tax at the higher rate prescribed in the said Finance Act ?'

2. The assessee is a Hindu undivided family. The Income-tax Officer determined the total income of the joint family and also determined the income-tax payable in accordance with Sub-para. II, Part I of Schedule I to the Finance Act. It is provided in Sub-para. II that in the case of every Hindu undivided family which at any time during the previous year has at least one member, whose total income of the previous year relevant to the assessment year under consideration exceeds the amount therein mentioned, income-tax is leviable at the rates specified therein. It may be mentioned that the rates prescribed in Sub-para. II are substantially higher than the rates of income-tax payable by a Hindu undivided family which does not include any member whose total income exceeds the income specified. Thus, a larger incidence of tax is attracted by a Hindu undivided family having at least one member whose total income exceeds the sum specified. For the purpose of convenience, such Hindu undivided family attracting higher rates of tax are known as 'specified Hindu undivided families'. The assessee objected to the application of rates in Sub-para. II on the ground that the family included only one female member whose income exceeded the limit. According to the assessee, the reference to 'member' is a male member and not a female member. This contention was rejected by the Revenue and the assessee family was taxed at the higher rates prescribed in Sub-para. II. Appeals filed by the assessee against the assessment did not succeed before the Appellate Assistant Commissioner as well as the Income-tax Appellate Tribunal. The assessee, therefore, secured the present reference.

3. Learned counsel for the assessee contended that the higher rates prescribed in Sub-para. II are applicable only in the case of a joint family, where a male member derives the income in excess of the minimum specified therein. We do not see any support for the above plea. The provision is clear that if any member of the family derives income in excess of the minimum specified in Sub-para. II, then the higher rate of tax has to be applied. There are no grounds to qualify the expression 'member' as a male member. If the intention of the Legislature was to refer to a male member, it would have been more appropriate to use the expression 'coparcener'. On the contrary, the Legislature used the expression 'member' advisedly so that every joint family having any member, whether male or female, deriving income in excess of the minimum specified in Sub-para. II will be subjected to tax at the rates specified in Sub-para. II. We are, therefore, unable to accept the contention of the learned counsel that the Revenue erred in taxing the income of the joint family at the rates specified in Sub-para. II.

4. We may also refer to a decision of a Division Bench of this court in Prem Chand v. CIT : [1984]148ITR440(AP) , wherein this question has arisen for consideration. The Division Bench held that the application of higher rates of tax was justified in the circumstances above mentioned.

5. We accordingly answer the question referred in the affirmative, i.e., in favour of the Revenue and against the assessee. No costs. Advocate's fee Rs. 300.


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