S. Obul Reddi, C.J.
1. These two references at the instance of the assessees raise identical questions. The assessee in R. C. No. 109 of 1976 is Mrs. Hafeezunnisa Begum, partner of Kharkhana Zinda Tilismath, Hyderabad, and the assessee in R. C. No. 119 of 1976 is Mrs. Mohammadi Begum, another partner of the same firm. These two assessees are the widows of one Hakim Mohammed Moizuddin who was the proprietor of the firm, Messrs. Kharkhana Zinda Tilismath. He died intestate in February, 1954, leaving behind his mother, two wives (the assessees) and sons and daughters, some of whom were minors born to both the wives. The deceased was governed by the Muslim Sunni Hanafi law. All his legal heirs including the assessees and the minor sons succeeded to the matruka of the deceased in definite shares according to their personal law. On May 4, 1954, for the purpose of carrying on the business of the firm belonging to the deceased Hakim Mohammed Moizuddin, all the heirs entered into a partnership. Among the partners were the two assessees and the minor children of each of the assessees. In all, there were five minors who were admitted to the benefits of the partnership. Subsequently, on June 27, 1954, the mother of the deceased was also taken as a partner of the said firm. Later, another fresh deed of partnership was drawn up on July 16,1955, in which there were fifteen partners. Among them were six minorsand sons of the two widows, the two widows and another. The shares allotted to all the partners including the minors who were admitted to the benefits of the partnership were in accordance with the Muslim law governing inheritance. In R.C. No. 119 of 1976, the assessee's share of profit from the firm for the assessment year 1963-64 was Rs. 24,067, while the share of her minor son was Rs. 34,095 and that of her minor daughter was Rs. 17,047. The ITO included the income of both the minors in the hands of the assessee under Section 64(ii) of the I.T. Act. That led to the assessee preferring an appeal to the AAC contending that the minors received their share of income from the firm in their own right and that admission of the minors to the benefits of the partnership was not with an intention to evade tax. According to the assessee, the proper provision for making assessment was by invoking Section 161(1) of the I.T. Act. That contention was rejected. On further appeal to the Appellate Tribunal, the Tribunal remitted the case to the AAC for disposal afresh in accordance with law after finding out the relevant facts. On remand, the AAC, having regard to the facts got investigated by the ITO, confirmed the order of the assessing authority. On appeal to the Tribunal, the Tribunal confirmed the order of the AAC. Hence, at the instance of the assessee, the following two questions have been referred for this court's opinion:
'(1) Whether, on the facts and in the circumstances of the case, the ITO was correct in including in the total income of the assessee under Section 64(ii) of the I.T. Act, 1961, the share income arising to the assessee's minor children by reason of their admission to the benefits of partnership
(2) Whether, on the facts and in the circumstances of the case, the AAC was justified in upholding the inclusion in the total income of the assessee under Section 64(ii) of the I.T. Act, 1961, of the share incomes arising to the assessee's minor children by reason of their admission to the benefits of partnership in view of the Tribunal's order dated June 9, 1969?'
2. Mr. Anjaneyulu, the learned counsel for the assessees, strenuously contended that, on the facts of the case, it is Section 161(1) that is attracted and not Section 64(ii), as found by the Tribunal.
3. From the facts narrated above, it is clear that the minors in both the cases weye admitted to the benefits of partnership only after the death of their father. The first partnership came into existence on May 4, 1954, the second partnership on June 27, 1954, and the last one on July 16, 1955.
4. Section 4 of the Partnership Act defines 'partnership' as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Section 30 of the same Act provides for a minor being admitted to the benefits of partnership with the consent of all the partners. A minor has a right to such share of the property and of the profits of the firm as may be agreed upon by the partners. It is by virtue of the provisions of Section 30 that the minors, sons and daughters of the assessees, were admitted to the benefits of the partnership. The fact that the matruka property of the deceased, Mohammed Moizuddin, devolved on all the heirs according to the personal law makes no difference in so far as the admission of the minors to the partnership business of the firm of Zinda Tilismath is concerned. The contention of Mr. Anjaneyulu is that, because of the personal law governing the minors, the matruka devolved upon them and that property consisted in the shares of the minors in the firm, and, as such, the assessments on the assessees should have been made in their capacity as representative assessees under Section 161(1) of the Act.
5. To appreciate the contention of the learned counsel for the assessees, it may be necessary to refer to the two relevant provisions, Sections 64(ii) and 161(1) of the Act. Section 64(ii), as it to stood prior to the Amendment Act, 1975 (which came into force with effect from April 1, 1976), reads :
'64. (1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly--.....
(ii) to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm in which such individual is a partner ;.....'
6. Section 161(1) reads:
'161. (1) Every representative assessee, as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own name in respect of that income ; but any such assessment shall be deemed to be made upon him in his representative capacity only, and the tax shall, subject to the other provisions contained in this Chapter, be levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him.
(2) Where any person is, in respect of any income, assessable under this Chapter in the, capacity of a representative assessee, he shall not, in respect of that income, be assessed under any other provision of this Act.' Sub-section (1) of Section 160 defines the expression 'representative assessee' and Sub-section (2) of the same section introduces a fiction that every representative assessee shall be deemed to be an assessee for the purposes of the Act. Such income which he receives in his representative capacity will be liable to assessment in his own name in respect of that income; but on account of the fiction introduced, it shall be deemed to be made uponhim in his representative capacity only; in other words, that income received by him as a representative assessee is not includible in his own income. Section 161(1) speaks of liability of a representative assessee in respect of the income which he receives in his individual capacity. Section 161(1) is silent regarding the liability of a representative assessee in respect of income of a minor child of an individual who has been admitted to the benefits of partnership in a firm in which such individual is a partner. In other words, Section 64(ii) and Section 161(1) operate in two different fields. Section 64 is a special provision which governs the income of a minor child of an individual who has been admitted to the benefits of partnership in a firm in which such individual is a partner ; whereas Section 161(1) is a general pro-sion which provides for assessment on a representative assessee in regard to the income of a minor, lunatic or idiot. A representative assessee need not be the father of a minor or lunatic or idiot. A representative assessee could . be the guardian, manager, agent, administrator-general, official trustee or any receiver (including any person, whatever his designation, who in fact manages property on behalf of another), appointed by or under any order of a court. Section 64 deals with the income of a spouse of an individual, the minor child of such individual, and any person or association of persons from assets transferred otherwise than for adequate consideration to the person or association of persons by such individual. The Explanation to Section 64, in so far as it is relevant for our purpose, reads: '.....and, for the purpose of Clause (ii), where both the parents aremembers of the firm in which the minor child is a partner, the income of the minor child from the partnership shall be included in the income of that parent whose total income (excluding the income referred to in that Clause) is greater ;.....'
7. The Explanation further makes it clear that Section 64(ii) is a special provision in this regard and that there is no question of the income of the minor child being added under Section 64(ii) to that of a guardian (not being a parent) or manager or agent or any other person referred to in Section 161(1).
8. The intention of the legislature in enacting Section 64, as pointed out by Subba Rao J. (as he then was) in Balaji v. ITO : 43ITR393(SC) , was to prevent evasion of tax by an individual by nominally entering into partnership with his wife or minor children. The scope of Section 64 is limited only to a few of the intimate members of a family who ordinarily are under the protection of the assessee and are dependants of him. The wife and minor children cannot also be ordinarily expected to carry on their business independently with their own funds, when the husband or the father is alive and when they are under his protection. The mode of taxation, may be a little hard on a husband or a father in the case of genuine partnership with wife or minor children, but, as pointed out by the SupremeCourt, that is offset, to a large extent, by the beneficent results that flow therefrom to the public, namely, the prevention of evasion of income-tax.
9. The Supreme Court in C. R. Nagappa v. CIT : 73ITR626(SC) had to deal with a similar contention, viz., that the ITO was bound to assess the income under each deed of trust separately in the hands of the trustees as 'representative assessees' and was incompetent in view of the express enactment of Sub-section (2) of Section 161(1) to assess the income in the hands of Nagappa or of the beneficiaries. The learned judges, after referring to the relevant provisions of the Act, observed thus (p. 630):
'It is clear that in each of the five cases income which in truth is not the income of the assessee is directed in the special conditions prescribed to be included in the total income of the assessee. Where an individual has transferred assets without adequate consideration to another person or association of persons, the income from the assets intended for the benefit immediate or deferred of the spouse or minor child of such individual is, by Clause (v), liable to be included in the income of the individual.'
10. The view expressed therein fortifies the view taken by us where a minor child, who has been admitted to the benefits of partnership in a firm in which an individual, in this case the mother, is a partner, in computing the total income of the individual, the income derived by the minor from the partnership should be included in her income.
11. The Supreme Court again endorsed its view in Muthiah Chettiar v. CIT : 74ITR183(SC) . The Madras High Court in CIT v. Smt. Shajathi alias Jainabi : 110ITR738(Mad) , on somewhat similar facts, opined that, if the miners were admitted to the benefits of partnership, then it would be proper to assess the income referable to the minors in the hands of the firm and also to club the income with that of the widow.'We, therefore, hold that, when once it is admitted that the minors were admitted to the benefits of partnership, there is no escape from the operation of the provisions of Section 64(ii) of the Act.
12. We, therefore, answer the questions referred to us in the affirmative and against the assessee with costs. Advocate's fee Rs. 250 in each.
13. Mr. Anjaneyulu made an oral application under Section 261 of the Act for leave to appeal to the Supreme Court. We are unable to certify that these are fit cases for appeal to the Supreme Court. Oral application is rejected.