1. Shri G.B. Ere Gowda was being assessed in the status of a HUF in respect of the wealth inherited by him on partition from the bigger joint family consisting of himself, his wife and two sons. The family, thus, consisted of Shri Ere Gowda and his wife. He filed a return on 12-9-1978 for the assessment year 1978-79. No assessment was done till 14-2-1983. In the meantime, Shri Ere Gowda" died on 15-12-1979. The WTO completed the wealth-tax assessment in the status of a HUF by serving notices on the divided son Thippaiah and the wife of Shri Ere Gowda, Smt. Channamma.
2. Before the Commissioner (Appeals), it was contended that the HUF ceased to exist with the death of Shri Ere Gowda, and there being no provision in the Wealth-tax Act to make an assessment on the HUF, which had ceased to exist, the assessment made by the WTO on the HUF was invalid. The Commissioner (Appeals) accepted this contention relying on the decision of the Madras High Court in the case of Seethammal v. CIT  130 ITR 597. The revenue is in appeal.
3. It was submitted by the learned departmental representative that on the valuation date, viz., 31-3-1978, the HUF existed. The karta had also filed a return of net wealth. Therefore, the assessment on the HUF was perfectly valid, particularly since Section 19 of the Wealth-tax Act, 1957 ('the Act'), enables the WTO to recover taxes due from the deceased person out of the estate falling to the heirs. The learned counsel for the assessee relied on the order of the Commissioner (Appeals).
4. We have heard the rival submissions. Section 19, no doubt, enables the WTO to collect taxes due by the deceased from his legal representatives. But, here we are concerned with a provision for making an assessment. Section 19(2) and Section 19A of the Act also do not help the revenue because these sections refer to the executor, administrator or other legal representatives of the deceased person.
But, here we are dealing with the case of a HUF. A HUF does not die. It cannot also be treated at par with an individual. While Sections 20 and 20A of the Act deal with the assessment of a HUF after partition, they do not deal with the assessment of a HUF which has ceased to exist otherwise than by way of partition. This is a peculiar case where the HUF has ceased to exist not because of a partition but by reason of the fact that only one member of the erstwhile HUF is left and one person cannot constitute a HUF (vide the Supreme Court decision in the case of C. Krishna Prasad v. CIT  97 ITR 493. We are not concerned with the status of Smt. Channamma at present. Smt. Channamma might inherit the wealth in her capacity as an individual and that may be subjected to tax in that status after the death of her husband. But the peculiarity in this case is that admittedly, on 31-3-1978, the family had taxable wealth but before the assessment could be done the taxable entity has disappeared. The Legislature has not inserted a provision in the Act to the effect that in case of a joint family which has ceased to exist because of the reduction in the number of members to one, the assessment could be made on the surviving member as if the HUF had continued to exist. In other words, the provisions similar to Sections 20 and 20A should have also been made to cover a case of this type. In the absence of this provision, we hold that no assessment could be made on the HUF. The order of the Commissioner (Appeals) is upheld.