BIKASH CHANDRA GHOSE Vs. U N BALA INCOME TAX OFFICER B WARD

JUDGEMENT

(1.) This is an application under Article 226 of the Constitution for the issue of appropriate writs prohibiting the respondent-Income-tax Officer from proceeding with the assessment of the petitioner for the assessment year 1963-64 on the basis that the beneficiaries of the estate are the members of a Hindu undivided family. Two brothers, Ramcharan Sarkar and Gagan Chandra Sarkar, were governed by the Dayabhaga School of Hindu law. Ramcharan died some time in 1902, leaving him surviving his three sons, Surendra, Bidhu Bhusan and Ganapati. Gagan died some time in 1904 after having made and published his will which was duly probated in the Alipore Court some time thereafter. Gagan appointed his wife, Kusum Kumari, and his nephew, Surendra as the executrix and executor, respectively, of his said will and declared that he had taken Ganapati, his brother's son, in adoption and that, subject, to certain legacies and payment of maintenance to his widow for which the entire estate shall be charged, the income therefrom to be divided as to a moiety thereof to be paid to Ganapati and the remaining moiety in equal shares to Surendra and Bidhu. The said will recited that all the properties either standing in his own name or in the benami of his brother-in law, his nephew, Surendra and his daughter, Haridasi, were his self-acquired properties. The will further contained a prohibition against the partition of the properties and devolution at any stage to any persons not belonging to the Gotra of the testator. In other words, the testator provided for devolution in the male line. The widow died some time in 1928, and thereafter by a registered deed an agreement was recorded by way of family settlement on the 19th December, 1940, whereby Ganapati, Surendra and Bidhu agreed to share the income from the estate of the deceased, subject to the legacies mentioned therein, in equal shares. There was a further declaration that all the properties should at present remain joint but if any of the parties desired to get his own share in the entire properties or any particular property demarcated and partitioned, he should be entitled to get the same partitioned and allotted. It appears that Surendra, Bidhu and Ganapati had been filing returns for assessment to income-tax from the assessment years 1940-41 to 1956-57 and except for the first year when the status was described as " zamindar ", for all the remaining years the status was declared to be a Hindu undivided family, and assessments for these years were made in the status of a Hindu undivided family. Surendra died in October, 1952, Ganapati in January, 1955, and Bidhu on the 16th January, 1959. Ganapati left no male children but eight daughters. In 1955 a partition suit, being Suit No. 2539 of 1955, was filed in this court by the daughters of Ganapati for a declaration that they were jointly entitled to one-third share in the estate left by Gagan and for partition thereof. This was resisted by the heirs of Surendra and by Bidhu who contended, inter alia, that Gagan did not have any self-acquired property of his own but the properties were the joint family properties of Ramcharan and Gagan and so Gagan could only dispose of his half share in such properties by his will. Accordingly, as under the will Ganapati had been given half share in the estate of Gagan, Ganapati was only entitled to one-fourth share in the entire estate which had devolved on his heirs. In this suit some time in 1956, a receiver was appointed of the entire estate but subsequently by an order dated the 13th April, 1959, the present petitioner, Mr. B.C. Ghose, was appointed receiver in respect of the fisheries comprised in the said estate while another receiver was appointed in respect of the remaining properties of the said estate, who is the petitioner in the next matter being Matter No. 701 of 1967. Even after the appointment of the receivers the income was being assessed in their hands in the status of a Hindu undivided family till the assessment year 1959-60. Some time in 1965 proceedings were started by the respondent-Income-tax Officer to complete the regular assessment for the years 1960-61 to 1965-66 in respect of which provisional assessments had already been made on the basis of the beneficiaries' status being that of a Hindu undivided family. In spite of the objections of the petitioner assessments were completed for 1961-62 and 1962-63 while the reassessment for 1960-61 under Section 147 of the Income-tax Act, 1961, was still pending. In respect of the assessment year 1963-64 the petitioner by his letter dated the 14th March, 1966, required of the respondent not to proceed on the basis of the assessee being a Hindu undivided family without giving an opportunity to the petitioner to present his case. This application was made and the rule obtained on the 16th November, 1967, and an interim order prohibiting the respondent Income-tax Officer from enforcing any demand in respect of the said assessment was granted by this court.

(2.) Mr. Sen, the learned counsel for the department, produced before me all the assessment records of the petitioner and I find that for the assessment year 1960-61, the respondent-Income-tax Officer completed the assessment on both the receivers on the 3rd of March, 1969, and that in making the assessment orders, the Income-tax Officer had dealt with the petitioner's contention that the status should not be taken as that of Hindu undivided family. It is to be mentioned in this connection that a preliminary decree was passed by this court in the said partition suit on August 11, 1960, declaring the shares of the heirs and legal representatives of each of the three brothers, Surendra, Ganapati and Bidhu, as one-third of the estate left by Gagan and directing partition of the said properties An appeal has been taken from that decree which is still pending in this court.

(3.) Mr. Banerjee, the learned counsel for the petitioner, submitted that at no point of time did the present beneficiaries and/or their predecessors-in-interest constitute a Hindu undivided family. As it would appear from the will of Gagan, the properties were the self-acquired properties of Gagan and the devolution of the estate was under the will and not by inheritance. In the case of persons governed by the Dayabhaga law, the heirs do not automatically form a Hindu undivided family and for this proposition the decision of a Division Bench of this court, of which I happened to be a member in Commissioner of Wealth-tax v. Gouri Sankar Bhar, [1968] 68 I.T.R. 345 (Cal.) was relied on. In that case it was held that on the death of a Hindu governed by the Dayabhaga school of Hindu law, his heirs do not spontaneously, by operation of law, become members of a Hindu joint family. They remain as co-owners with definite and ascertained shares in the properties left by the deceased, unless they voluntarily decide to live as a joint family. The heirs of a Hindu governed by the Diyabhaga school cannot, therefore, be assessed to tax as a Hindu undivided family on the entire net wealth left by the deceased but each of the heirs must be separately assessed to tax on his share as an individual unless there is evidence to show that the heirs had voluntarily decided to constitute themselves into a Hindu joint family. Mr. Banerjee submitted that there is no evidence in this case that Surendra, Ganapati and Bidhu decided to form a joint Hindu family or on their repective deaths their heirs and legal representatives also continue to be members of a joint family. Mr. B. Das, also appearing for the petitioner, further elaborated this argument by pointing out that as Ganapati only left eight daughters, of whom six were married and who were living at different places with their husbands, it is not practicable to consider them as members of a joint family along with the sons of Surendra and Bidhu. Further, the family arrangement dated the 19th December, 1940, described the properties as joint properties in which each of the parties is declared to have an undivided one-third share which they were entitled to have partitioned and demarcated. The enjoyment of the properties were separate and distinct as each of the three brothers was entitled to an equal one-third share of the income from the estate. It was submitted that this document also negatives any presumption of jointness between the members of the three brothers. In the judgment given by this court in making the preliminary decree, the court has held that the estate was the personal and self-acquired property of Gagan and was not the joint property of Gagan and his brother, Ramcharan. Reference was also made to another decision of this court in the case of Biswa Ranjan Sarvadhikary v. Income-tax Officer, F-Ward, District II Calcutta, [1963] 47 I.T.R. 927 (Cal.) where the facts were as follows : A Hindu governed by the Dayabhaga school of Hindu law died intestate leaving him surviving his widow and one son. For many years thereafter, the widow and the son were assessed separately in respect of their shares of the rental income from the immovable properties left by the deceased. In the relevant year, the Income-tax Officer attempted to assess the entire income as the income of a Hindu undivided family consisting of the mother and the son. The court held that the mother and the son, being governed by the Dayabhaga school of Hindu law, had defined shares in the properties and they could not be assessed in the status either of an association of persons or of a Hindu undivided family. The court further observed that the petitioner was entitled to resort to the writ jurisdiction of the High Court when he received the letter containing the opinion of the Income-tax Officer and his proposal to make an assessment on the basis of a Hindu undivided family which he had no jurisdiction to make. Mr. Das laid emphasis on the fact that in that case also the court exercised its writ jurisdiction in a case where there was a mere threat of action by the Income-tax Officer. Mr. Das further submitted that the question in this application is one of the proper exercise of jurisdiction and if there is an error of jurisdiction such error would be rectified by this court by the issue of a proper writ. His submission was that the finding that the beneficiaries constituted a Hindu undivided family is a jurisdictional fact in the sense that it gives the Income-tax Officer jurisdiction to impose the tax at the rate applicable to a Hindu undivided family and if the Income-tax Officer by an erroneous decision of that fact confers on himself a jurisdiction which is not vested in him, this court would certainly interfere. This proposition is too well established to need any authority. Mr. Das referred me to a recent decision of the Supreme Court in the case of State of Madhya Pradesh v. D.K. Jadav, A.I.R. 1968 S.C. 1186 where it was observed that it was well established that where the jurisdiction of an administrative authority depended upon a preliminary finding of fact, the High Court was entitled, in a proceeding for a writ, to determine upon its own independent judgment whether or not that finding was correct. Following this decision, B.C. Mitra J. in the case of Rama Krishna Iyer v. Fifth Industrial Tribunal, held that it was well settled that, if questions of fact raised in a writ petition are jurisdictional facts and if in deciding such a fact the Tribunal went wrong, the High Court may go into the question of fact and correct the wrong decision in the exercise of its writ jurisdiction. Mr. Das accordingly submitted that it would be proper for this court in this application to go into and decide the question as to whether the beneficiaries in this case constitute a Hindu undivided family. Finally, Mr. Das placed before me the decision of the Allahabad High Court in the case of L. Baij Nath v. Commissioner of Income-tax, [1954] 26 I.T.R. 324 (All.). The decision is fairly represented in the head note which is as follows: