- Bookmark
- Share
- CaseIQ
P.G Narayanaswamy v. Commr. Of Income-Tax
Factual and Procedural Background
The assessee was originally a member of a Hindu Undivided Family (H.U.F) but separated from the family on 2-9-1974. He was assessed individually up to and including the assessment year 1978–1979. The assessee married on 12-6-1978 and for the assessment year 1979–1980, claimed the status of H.U.F in respect of share income from a firm in which he was a partner. The Income-tax Officer rejected this claim based on the Kerala Hindu Joint Family System (Abolition) Act, 1975, which came into force on 1-12-1976. The Appellate Assistant Commissioner confirmed the rejection, and the Appellate Tribunal held that no H.U.F consisting of the assessee and his wife could come into existence due to the abolition of the joint family system by the Kerala Act. The question of law was referred to the High Court at the instance of the assessee.
Legal Issues Presented
- Whether, on the facts and circumstances of the case, the Tribunal was correct in holding that no Hindu Undivided Family (H.U.F) came into existence upon the marriage of the assessee, in view of the Kerala Joint Hindu Family System (Abolition) Act, 1975?
Arguments of the Parties
Assessee's Arguments
- The property obtained by the assessee as his share in the joint family revived the ancestral character upon his marriage.
- A joint family must be deemed to have come into existence on such marriage in the absence of any specific provision in the Kerala Act repugnant to this rule of Hindu Law, and thus the general law should prevail.
- The assessment should have been made in the status of H.U.F.
- Reference was made to the Court’s decision in W.T.O v. Madhavan Nambiar, which held that there can be no joint Hindu family in Kerala after 1-12-1976 due to statutory abolition.
- Since the system was abolished and rights by birth ended, and provisions made for distribution of joint family properties, the ancestral character of property obtained by an individual member cannot revive to create a joint family.
- Under general Hindu law, an H.U.F comes into existence on the marriage of a coparcener, but this rule cannot apply after abolition of the system by statute.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| W.T.O v. Madhavan Nambiar, W.A No. 159 of 1981 | Statutory extinction of the Hindu Joint Family system in Kerala after 1-12-1976. | Confirmed that no joint Hindu family can exist in Kerala post-abolition; the joint family system is statutorily wiped out. |
Court's Reasoning and Analysis
The Court analyzed the effect of the Kerala Joint Hindu Family System (Abolition) Act, 1975, which came into force on 1-12-1976, abolishing the Hindu Joint Family system in the State. The Court noted that the assessee separated from the joint family prior to the Act's enforcement and was assessed individually until 1978–1979. Upon marriage in 1978, the assessee claimed H.U.F status, relying on general Hindu law principles that a new H.U.F arises on marriage.
However, the Court held that the statutory abolition extinguished the joint family system and the right by birth to joint family property. The property held by the individual member after the abolition lost its ancestral character and could not revive the joint family status. The Court emphasized that where a statutory provision specifically abolishes a legal institution, the general law cannot revive it in the absence of express statutory allowance. Accordingly, the Court upheld the Tribunal’s finding that no H.U.F came into existence on the marriage of the assessee.
Holding and Implications
The Court held that the Tribunal was correct in rejecting the assessee’s claim that a Hindu Undivided Family came into existence upon his marriage in the State of Kerala after the abolition of the joint family system by statute.
The direct effect is that the assessee must be assessed individually for the relevant assessment year, and the ancestral character of property shares cannot be revived post-abolition. No new precedent was established beyond affirming the statutory effect of the Kerala Act on the joint family system.
M. Fathima Beevi, J.:— The question referred for our opinion under Sec. 256(1) of the Income-tax Act, 1961 is this:
“Whether, on the facts, and in the circumstances of the case, the Tribunal was right in holding that no H.U.F came into existence on the marriage of the assessed, in view of the Kerala Joint Hindu Family System (Abolition) Act, 1975?”
2. The assessment year in question is 1979–1980. The assessee who was a member of a Hindu Undivided Family separated from the family on 2-9-1974 He was thereafter assessed as individual upto and inclusive of 1978–1979. He got married on 12-6-1978. In the assessment for 1979–1980, these assessee claimed 1 the status of H.U.F in respect of the share income from the firm in which he was a partner.
3. The Income-tax Officer rejected the Claim and held that in view of the Kerala Hindu Joint Family (Abolition) Act, 1975 which came into force on 1-12-1976, the assessee cannot claim the status of H.U.F The, Appellate Assistant Commissioner confirmed the assessment. The Appellate Tribunal held that in view of the abolition of the Hindu Joint Family System by the Kerala Act, no H.U.F consisting of the assessee and his wife came into existence. The assessment on the assessee as an individual was, therefore, confirmed. The Question of law was referred at the instance of the assessee.
4. Sri P.K.G Warrier, learned counsel for the assessee contended before us that the property obtained by the petitioner as his share in the joint family revived the ancestral character on the assessee getting married and a joint family must be deemed to have come into existence on such marriage in the absence of any specific provision in the Kerala Act repugnant to this rule of the Hindu Law, the general law is to prevail and the assessment could have been made only in the status of H.U.F As held by this Court in W.T.O v. Madhavan Nambiar, W.A No. 159 of 1981, there can be no joint Hindu family in the State after 1-12-1976. It is a case of the statutory extinction of joint family. When the system has been abolished and the right by birth has been put an end to, and the provision has been made for distribution of the properties owned by the joint family the dormant character of the property obtained by individual member cannot revive and leave the imprint of joint property. Under the general law the share falling to coparceners does not lose its character of joint family property. H.U.F will come into existence on the marriage of the coparcener and the wife along with the husband can constitute an H.U.F That rule cannot apply after the execution of the H.U.F itself by the Act, when the joint family has been wiped off, the joint family character has been effaced and the absolute right of the individual members had been declared under the statute.
5. Thus by operation of law the property held by an individual member on and after 1-12-1976 has lost its character of ancestral property and that character cannot be revived as no undivided family could come into existence or revive within the State where the System has been statutorily put an end to.
6. We, therefore, hold the view that the Tribunal has rightly rejected the contention of the assessee. We accordingly answer the question in the affirmative, in favour of the revenue and against the assessee.
7. A copy of the judgment under the seal of the High Court and signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.
Alert