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Wealth-tax Officer Vs. Harinder Singh. - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Chandigarh
Decided On
Reported in(1986)17ITD607(Chd.)
AppellantWealth-tax Officer
RespondentHarinder Singh.
Excerpt:
.....two sons, one of whom was harinder singh.3. the wto held the view that after the passing of the hindu succession act, 1956, the property of a male hindu dying intestate devolves according to the provisions of chapter ii of this act. section 8 of this act lays down that the property shall devolve upon the heirs being the relatives specified in class i of the schedule and if there is no heir of class i, then upon the heir being the relatives specified in class ii. the property so obtained is individual property and it cannot be treated as the property if the joint family of which the concerned heir may be the karta. this decision of his has been reversed by the aac and he has directed that the status should be adopted as that of an huf and the value of the properties which shall form.....
Judgment:
Per Shri S. K. Chander, Accountant Member - These appeals by the revenue are directed against the order of the AAC dated 22-7-1981 relating to the assessment years 1975-76 to 1977-78. The common issue involved in these appeals is weather on the facts and in the circumstances of the case, the AAC erred in holding that the status of an HUF for the assessee is justified. The relevant facts for determination of this issue lie in a narrow compass and are as under.

2. Returns for the assessment years 1975-76, 1976-77 and 1977-78 were originally filed in the status of individual respectively on 5-8-1976, 5-8-1976 and 7-7-1977. However, on 23-8-1979, returns in the status of an HUF for these years were revised. Before the WTO during the course of the assessment proceedings, the learned counsel for the assessee filed two letters dated 17-1-1980 and 3-3-1980 explaining therein the basis on which the HUF status had been claimed in the returns. In this regard a specific mention was made of the immovable property inherited by Shri Harinder Singh after the death of the father Shri Surinder Singh. Shri Surinder Singh died on 16-5-1969 leaving behind his widow Smt. Gurbachan Kaur and his two sons, one of whom was Harinder Singh.

3. The WTO held the view that after the passing of the Hindu Succession Act, 1956, the property of a male Hindu dying intestate devolves according to the provisions of Chapter II of this Act. Section 8 of this Act lays down that the property shall devolve upon the heirs being the relatives specified in Class I of the Schedule and if there is no heir of Class I, then upon the heir being the relatives specified in Class II. The property so obtained is individual property and it cannot be treated as the property if the joint family of which the concerned heir may be the karta. This decision of his has been reversed by the AAC and he has directed that the status should be adopted as that of an HUF and the value of the properties which shall form the joint family property should be excluded from the net wealth of individual Harinder Singh. This is in dispute before us at the instance of the revenue for each of the assessment years under appeal.

4. Before us it was contended on behalf of the revenue that in view of the judgment of the Special Bench of the Tribunal, Hyderabad in the case of K. S. Mohan Rao v. ITO [1983] 4 ITD 1 and the judgment of the Madhya Pradesh High Court in the case of Shrivallabhdas Modani v. CIT [1982] 138 ITR 673 and another judgment of the same High Court in the case of CIT v. Ratan Lal [1982] 138 ITR 680 the property of a Hindu dying intestate after the coming into force of the Hindu Succession Act, will devolve on his heirs in accordance with section 8 and the successors will inherit the property in their individual capacity and not as representating their own HUF. Therefore, the AAC was in error in holding the view that he expressed in his impugned order and issuing directions to the WTO in the manner done by him. These submissions were opposed by the learned counsel for the assessee who supported the order of the AAC fully.

5. After careful consideration of the rival submissions we find that the Honble Punjab and Haryana High Court in the case of Brij Lal v.Daulat Ram, [1977] 79 Punj. LR 27 has considered this issue and held that "sections 6 and 8 of the Hindu Succession Act only postulate as to how the property left by a male Hindu will be inherited by the surviving heirs. It does not in any manner say as to how this property will be treated in the hands of the heirs. The Act being silent in this matter, section 4 of the Act cannot be interpreted to have abrogated the established principles of Mitakshara law". However, it is clear from a persual of section 4 of the Hindu Succession Act the Court observed : "that the entire Mitakshara law has not been abrogated by the Act but only to the extent the same is inconsistent with the provisions of the Act. If there is a conflict between Mitakshara law and the Act, the provisions of the Act will prevail. Where any field has been left uncovered by the provisions of the Act, the Mitkshara law will still continue to hold the field". it was further held that section 8 which deals with the succession to the property of a Hindu male dying intestate has modified the Mitakshara law to this extent only that after his death the property shall devolve not only on the son as a member of the coparcenary or otherwise but also on the widow and daughters.

6. In view of that is stated above, in our considered opinion, the AAC has rightly decided the issues before him we do not find any justification for an interference in his order at the instance of the revenue.

7. Before we close, we would like to observe that there are judgments contrary to the view that we have taken and there is a Special Bench judgment cited on behalf of the revenue. However, located as we are, the judgment of the Punjab and Haryana High Court which is exactly on the issue as before us, is binding on us. We, therefore, decide the issue accordingly.


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