- (1.) THE assessee has prayed before the Income-tax Appellate Tribunal for making reference to this court in respect of two questions, but only one question was referred in respect of the assessment year 1976-77 under Section 27(1) of the Wealth-tax Act, 1957, which is as under : " Whether, on the facts and in the circumstances of the case, the correct status of the assessee was specified Hindu undivided family or otherwise ?"
(2.) THE returns of wealth were filed by the assessee in respect of the period ending on Deewali, 1975, on July 1, 1976, showing the status as a Hindu undivided family. THE Wealth-tax Officer determined the net wealth and charged the tax which was applicable to the specified Hindu undivided family. In the appeal before the Commissioner of Income-tax (Appeals) it was found that since no reasons have been given in the assessment order, therefore, the matter should be examined again by the Wealth-tax Officer as to why the status of specified Hindu undivided family is taken. THE assessee against the order of the Commissioner of Income-tax (Appeals) approached the Income-tax Appellate Tribunal by way of second appeal and contended that the only member of the Hindu undivided family having taxable wealth is the wife of the karta and since the wife is not a coparcener who can claim partition of the Hindu undivided family, it should be a considered to be a non-specified Hindu undivided family. THE Income-tax Appellate Tribunal observed that there is no difference between the term joint Hindu family which is used in the Hindu law and undivided family which is used in the Income-tax Act and Wealth-tax Act, but they have used the word "member" instead of "coparcener" and the wife being a member of the Hindu undivided family, the" status of the assessee has to be treated as that of specified (HUF ?). We have considered over the matter. The wife is not a coparcener under the Hindu law and is entitled to maintenance out of the husband's property and has to that extent an interest in his property. She cannot demand partition hut, if a partition takes place between her husband and sons she is entitled to receive a share equal to that of a son. A coparcenary is narrower than the joint family. A person who acquires by birth an interest in the joint or coparcenary property is a coparcener. The joint Hindu family constituting a coparcenary is required to have a common male ancestor with lineal descendant in the male line whereas a joint Hindu family consists of all persons lineally descendent from a common ancestor and includes their wives and unmarried daughters. In Kalyanji Vithaldas v. CIT [1937] 5 ITR 90, the Privy Council has made a distinction between a coparcenary and a Hindu undivided family and it was held that a female can be a member of the Hindu undivided family. In this case Moolji owned the property as a separate property which was gifted by him to his sons Kanji and Sewdas who had no sons. It was further held that the assessment has to be made as an individual till a son is born. In Gowli Buddanna v. CIT [1966] 60 ITR 293, it was held by the apex court that a single male coparcener living with his mother and two sisters can constitute a Hindu undivided family. In this case, the property was ancestral in the hands of the father and after his death devolved by survivorship on the son and he was the only male coparcener. The reduction of the number of coparceners was considered not a relevant factor. In N.V. Narendranath v. CWT [1969] 74 ITR 190 (SC), the principle of Gowli Buddanna's case [1966] 60 ITR 293 (SC) was followed and this was also a case of a single coparcener with his wife and two daughters, and, it was held that a joint family can consist of a single male member and his wife and daughters, and there is nothing in the scheme of the Wealth-tax Act to suggest that the Hindu undivided family as an assessable unit must consist of at least two male members. In Surjit Lal Chhabda v. CIT [1975] 101 ITR 776 (SC), the assessee had no son and it was found that the property was not an asset of a pre-existing joint family of which the assessee was a member and it became an item of joint family for the first time when the assessee threw his separate property into the family hotchpot. In respect of his own separate property which was so thrown, of which the assessee was the full owner, it was held that since he had no son at that point of time when the property was converted as joint family property, the income of such property has to be considered as the income of the individual and not of a Hindu undivided family. It was observed by Ghandrachud J., (at page 783): "the joint Hindu family is thus a larger body consisting of a group of persons who are united by the tie of sapindaship arising by birth, marriage or adoption. "The fundamental principle of the Hindu joint family is the sapindaship. Without that it is impossible to form a joint Hindu family.... It is the family relation, the sapinda relation, which distinguishes the joint family and is of its very essence. . . .' The appellant's wife became his sapinda on her marriage with him. The daughter too, on her birth, became a sapinda and until she leaves the family by marriage, the tie of sapindaship will bind her to the family of her birth." Schedule I to the Wealth-tax Act provides the rates of tax and in Part I of the said Schedule, the rates of tax in respect of an individual or a Hindu undivided family have been prescribed. Item 2 of Part I prescribes the rate of tax in respect of a Hindu undivided family which has at least one member whose net wealth is assessable under the Wealth-tax Act.
(3.) THE use of the word "member" in the Schedule to the Wealth-tax Act, in the light of the decisions of the apex court and the provisions of the Hindu law make it clear that the wife is a member of the family and is not a coparcener. THEre is no requirement, under law that the member should be a coparcener. THE apex court itself has considered a wife a member and since the Schedule to the Wealth-tax Act has not required that the member should be a coparcener, the concept of Hindu law of a coparcenary cannot be invoked. It is not in dispute that the wealth of the wife of the karta is taxable wealth and she is also a member of the family. In these circumstances, we are of the view that the Income-tax Appellate Tribunal was justified in coming to the conclusion that the correct status of the assessee was specified Hindu undivided family. Consequently, the reference is answered in favour of the Revenue and against the assessee. ;