- (1.) These appeals Nos. 1399 to 1403 of 1970 and 301 of 1974 by certificates granted by the High court of Madras shall be disposed of together by this judgment as they raise common question of law and fact.
(2.) The circumstances giving rise to these appeals are: The late R. Sridharan along with his father and brothers constituted a Hindu undivided family governed by Mitakshara law. On 28/06/1952, while he was still unmarried, a partition took place between him, his brothers and his father. As a result of this partition, a block of shares in T. V. Sundaram iyengar and Sons Private Limited and three other limited companies fell to his share. On 14/06/1956, Sridharan married Rosa Maria Steinbchler, a Christian woman of Austrian descent, under the Special Marriage Act, 1954. On 29/11/1957, a son named Nicolas Sundaram was born out of this wedlock. For the assessment years 1957-58 and 1958-59, Sridharan was assessed to income tax and wealth tax in the status of an 'individual' on his own declaration to that effect. In the assessment proceedings in respect of income tax and wealth tax for the assessment years 1959-60, 1960-61 and 1961-62 and in the assessment proceedings under the Expenditure Tax Act for the year 1961-62, he claimed to be assessed in the status of a member of Hindu undivided family consisting of himself and his son. Nicolas Sundaram, contending that the property held by him was ancestral and Nicolas Sundaram was a Hindu. The Income Tax Officer, Wealth Tax Officer and Expenditure Tax Officer refused to accede to the contention of Sridharan and assessed him in the status of an 'individual' as in the previous years on the groundsthat the value of the shares and other investments standing in his name being his exclusive properties and by virtue of S. 21 of the Special Marriage Act, 1954, succession to the property of a person whose marriage has been solemnised under that Act being governed by the Indian Succession Act, 1925, and not by the ordinary Hindu law, Nicolas Sundaram could not become a member of Hindu undivided family with his father. Sridharan thereupon went up in appeal to the Appellate Assistant Commissioner but remained unsuccessful. The orders passed by the Income Tax/wealth Tax/expenditure Tax Officers and the Appellate Assistant Commissioner were also affirmed in appeals against the assessments respectively made under the Income Tax Act, Wealth Tax Act and the Expenditure Tax Act by the appellate tribunal. In the course of its consolidated order rejecting the appeals, the appellate tribunal observed that although S. 21 of the Special Marriage Act preserved some of the rights in the family property of the children born out of marriage solemnized under that Act, it did not clothe such offspring with the character of Hindus and therefore, there was no Hindu undivided family of Sridharan and his son which could claim to be taxed as Hindu undivided family.
(3.) Thereafter on the applications made by Sridharan under S. 27 (1) of the Wealth Tax Act, S. 66 (1) of the Income Tax Act and S. 25 (1) of the Expenditure Tax Act, the Income-tax Appellate tribunal referred the following common question of law arising from its aforesaid decision for the opinion of the High court: Whether, on the facts and in the circumstances of the case, the assessee and his son constituted a Hindu undivided family for purposes of assessment under the Income-tax, Wealth-tax. and Expenditure-tax Acts ;