(The judgment of the Court was delivered by the Honble the Chief Justice).
This reference, which the Commissioner of Income-tax has made suo motu under the provisions of section 66 (1) of the Indian Income-tax Act, raises an interesting question of law. The assessee is a Nattukottai Chettiar and he was assessed to income-tax by the Income-tax Officer, Karaikudi I circle, on an income of Rs. 65,865 for the year 1938-39. If this assessment is to be regarded as being on the assessee as an individual he will be required to pay super-tax, but if the assessment is on him as the representative of a joint Hindu family super-tax will not be payable, because in the case of an undivided Hindu family super-tax is not leviable until the income exceeds Rs. 75,000. The assess was joint with his father Murugappa Chettiar until the fathers death on the 18th January 1938. The only surviving members of the family are the assessee and his step-mother. The question referred is this :-
'Whether on the facts stated the assessment should be made on the assessee as an individual or on the assessee and his step-mother as a Hindu undivided family or on the assessee and his step-mother as an association of individuals.'
In the sense known to Hindu law the assessee and his step-mother are members of an undivided family. This question was raised and settled by this Court in Vedathanni v. Commissioner of Income-tax, Madras. There a family consisted of a simply male member and the widows of deceased co-parceners, and it was held that they constituted an undivided family. Sir George Rankin, in delivering the judgment of the Privy Council in Kalyanji Vithaldas v. Income-tax Commissioner, Bengal said :-
'The phrase Hindu undivided family is used in the statute' - the Incomes-tax act - 'with reference, not to one school only of Hindu law, but to all schools; and their Lordships think it a mistake in method to begin by pasting over the wider phrase of the Act the words Hindu co-parcenery all the more that it is not possible to say one the face of the Act that no formal can be a member.'
In this case the Judicial Committee held that under the Mitakshara law the mere fact that a man has a wife and a daughter does not make ancestral property joint and income of such property assessable as income of an undivided Hindu family.
If we had not to look beyond that case, there would be no doubt that in the present case the assessment would have to be regarded as an assessment made on the assessee as an individual and not as representing a joint family. Since the judicial Committee pronounced judgment in that case, the Hindu womens Rights to Property Act, 1937, has, however, been placed upon the statute book. Section 3 (1) of that Act says that, when a Hindu governed by the Dayabhag school of Hindu law dies intestate his property, and when a Hindu governed by any other school of Hindu law or by customary law dies intestate leaving separate property that separate property, shall subject to the provisions of sub-section (3), in like manner as it devolves upon a son. Sub-section (2) says that when a Hindu governed by any school of Hindu law other than the Dayabhag school or by customary law dies intestate, having at the time of this death an interest in a Hindu joint family property, his widow shall subject to the provisions of sub-section (3), have in the property the same interest as he himself had. Sub-section (3) states that any interest devolving on a Hindu widow under the provisions of this section shall be the limited interest known as a Hindu womans estate, provided however that she shall have the same right of calming partitions a male owner. It is too necessary to decide with the effect of this section is to make the widow a co-percener in the full sense of the word, but it is quite clear that she obtains an interest in the joint family property and as she is a member of the joint family, the income of the property must be regarded as income of the family. This being the state of the law, the income here must be regarded as the income of a joint family composed of the assessee and his step mother. This is the view which the Commissioner of Incomes-tax has himself expressed in making this reference, and we agree that it is the right view.
The answer to the reference is that the assessment should be made on the assessee and his step-mother as a Hindu undivided family. There will be no order as to costs.
Reference answered accordingly.