Harries, C.J:— This is a reference under section 66(3), Indian Income-tax Act, made by the Commissioner of Income-tax, Bihar and Orissa, in which the Court is required to answer the following question:—
“Whether the amount of Rs. 16,000 received by the assessee in this case is exempt from taxation by reason of the provisions of section 14(1) of the said Indian Income-tax Act?”
The assessee is Musammat Radha Kuar, the widow of Babu Sarandhari Lal, who died in the year 1922. The assessee was assessed on Rs. 23,786 for the year 1939-1940. This sum included a sum of Rs. 18,000 which is the subject-matter of the present reference.
One Babu Sardhari Lal died in the year 1888, leaving two sons, Babu Tilakdhari Lal and Babu Sarandhari Lal. After the death of Babu Sardhari Lal the two sons continued in a state of jointness until the death of Babu Sarandhari Lal, which, as I have said, took place in the year 1922. Babu Sarandhari Lal left no male issue, but his widow and two daughters survived him. As he was joint with his brother at the date of his death, Babu Sarandhari Lal's interest in the joint family property passed by right of survivorship to his brother Tilakdhari Lal and his two sons, Kamaldhari Lal and Shamaldhari Lal.
However, on the death of Sarandhari Lal, his widow, the present assessee, claimed that her husband had separated from the other members of the family and that he was at the date of his death entitled to a half share in the family property. She filed Title Suit no. 10 of 1923 in the court of the Subordinate Judge, Bhagalpur, claiming that she was entitled to her husband's share in the property and, therefore, asked for partition of the same. In order to avoid litigation Babu Tilakdhari Lal and his two sons arrived at a compromise with the assessee, and the court passed a decree in the terms, of the compromise.
In the petition of compromise it is stated on behalf of all the parties that Babu Sarandhari Lal died as a member of a joint Mitakshara family and that on his death the entire joint family property vested in Tilakdhari Lal and his two sons. The widow also admits in this petition that she was only entitled to maintenance under Hindu Law.
By the terms of the compromise maintenance at the rate of Rs. 1,500 per mensem was to be paid to the assessee for her life by Tilakdhari Lal and his two sons. Further, a sum of Rs. 65,000 was to be paid to the assessee and also her debts were to be discharged by the joint family. A house with land-attached was given to the assessee for her life and after her death to her daughters absolutely. Lastly, a sum of one lakh of rupees was to be settled on each of the daughters of the assessee. It was provided by the compromise that this monthly allowance to be paid to the assessee was to be a first charge on the zamindari properties, of the joint family situate in the district of Bhagalpur. In case of non-compliance with any of the terms of the compromise the parties were entitled to enforce the decree passed on the compromise by execution.
The joint family have paid the assessee the monthly sum of Rs. 1,500 for her maintenance, and it is this sum, namely, Rs. 18,000 per annum, which the Income-tax authorities now claim the right to tax.
Before the Income-tax Officer it was contended by the assessee that this sum was exempt from taxation by reason of section 14(1), Indian Income-tax Act. It was urged that the assessee received this payment as a member of a joint Hindu family. The Income-tax Officer, however, held that she did not receive this money in her capacity as a member of a joint Hindu family, and he, therefore, held that it could be assessed to income-tax.
On appeal the Assistant Commissioner reversed the decision of the Income-tax Officer and held that this sum was exempt from taxation under section-14(1), Indian Income-tax Act.
During the course of an inspection this case came to the notice of the Commissioner who called upon the assessee on the 19th of June, 1940, to show cause why the appellate order, in so far as it related to this sum of Rs. 18,000, should not be set aside and the original assessment order restored under section 33 of the Act. The parties appeared before the Commissioner who held that this sum was not exempt from taxation and accordingly reversed the Assistant Commissioner and restored the order of the Income-tax Officer.
section 14(1), Indian Income-tax Act, is in these terms:—
“The tax shall not be payable by an assessee in respect of any sum which he receives as a member of a Hindu undivided family.”
It cannot now be contended that a Hindu female cannot be a member of a Joint Hindu family. In Mulla's Hindu Law, 9th edition, paragraph 212, the learned author says:—
“A joint Hindu family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters.”
In paragraph 213 he says:—
“A Hindu co-parcenary is a much narrower-body than the joint family. It includes only those persons who acquire by birth an interest in the joint or co-parcenary property.”
According to the learned author, a Hindu co-parcenary consists only of males, whereas the joint family consists not only of the males but also of their wives, widows or unmarried daughters.
This question was considered in recent times in a Full Bench case of the Madras High Court, Vedathanni v. The Commissioner of Income-tax, Madras, in which it was held that there can be a joint family with a single male member provided there are widows of deceased co-parceners or other persons entitled to maintenance from him. Where there is only one male co-parcener and a widow of a deceased co-parcener the two will form a joint Hindu family.
A similar view was taken in Commissioner of Income-tax, Bombay v. Makanji Lalji and in Bhagwati v. Commissioner of Income-tax, C.P & U.P.
The matter has also been considered by their Lordships of the Privy Council in the recent case of Kalyanji Vithaldas v. Commissioner of Income-tax, Bengal. At page 37, Sir George Rankin, who delivered the judgment of the Board, observed:
“The phrase ‘Hindu undivided family’ is used in the statute 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-parcenary’—all the more that it is not possible to say on the face of the Act that no female can be a member.”
At page 39 he observed that the Board does not agree that a Hindu joint family necessarily consists of male members only. From these cases, therefore, it is clear that a widow can be a member of a joint Hindu family.
In the present case, as I have stated, the assessee at first claimed that her husband died in a state of separation. By the compromise that claim was abandoned, and it was admitted by her that her husband died in a state of jointness with Tilakdhari Lal and his two sons. On the death of her husband, therefore, the widow remained a member of the joint family and her husband's interest in the joint family property passed by survivorship to the other co-parceners. The widow had no right whatsoever to a share in the property, and her right was to maintenance and the maintenance only. The compromise provided for this maintenance at the rate of Rs. 1,500 per mensem or Rs. 18,000 per annum. The compromise also gave her for her life a residence, her debts were also paid and a large sum given to her absolutely.
Presumably, the widow now lives apart from the other members of the family in the house which was given to her and which will pass on her death to her two daughters. The fact that she is living apart from the other members of the family does not, however, affect her position in law. A widow cannot by her own act separate from the other members of the joint family, and merely living apart from them in no way effects a separation. The assessee is, therefore, still a member of this joint family, though she does not live with them. She receives a sum of Rs. 18,000 per annum for her maintenance, and it appears to me clear that she is receiving it as a member of a joint family. It is true that she it receiving it under the terms of a compromise decree, but the very terms of that decree show that she is receiving this annual payment in virtue of her position as a widow in the family. That being so, it appears to me clear that section 14(1), Indian Income-tax Act, applies to this case and that this sum of Rs. 18,000 is exempt from taxation.
This precise point was decided in the Madras Full Bench case, to which I have already referred, Vedathanni v. The Commissioner of Income-tax, Madras, in which it was expressly held that maintenance and arrears of maintenance received by a widow of a member of a joint Hindu family is exempt from taxation under section 14(1) and other sections of the Indian Income-tax Act. In that case a widow held a decree for maintenance, but nevertheless it was held that she received the money as a member of an undivided Hindu family and; therefore, the sum was exempt from taxation.
A very similar point was considered by a Bench of the Bombay High Court in Commissioner of Income-tax, Bombay v. Makanji Lalji. In that case a Hindu widow, a member of a Hindu undivided family, brought a suit for maintenance against her husband's brother and his son, and under a consent decree passed by the High Court in 1930 the amount of maintenance was fixed at Rs. 165 per month and certain family property was charged. The assessee in that case was the joint family, and it claimed a deduction from the family income of the amount of maintenance paid to the widow. The Bench held that the assessment being on a Hindu undivided family, the whole of the income of the Hindu undivided family was liable to assessment, and that it was impossible to deduct the sum payable to the widow of a deceased brother, who received it in her capacity ultimately as a member of the joint family. In this case the Bench makes it abundantly clear that the payment made to the widow under the decree for maintenance was a payment made to her as a member of the joint family.
A Bench of the Allahabad High Court in Bhagwati v. Commissioner of Income-tax, C.P & U.P has gone further and has held that payments made to a widow for her maintenance are received by her as a member of an undivided Hindu family even after the family has disrupted and partition has been effected. This question was expressly left open in the Madras Full Bench case to which I have referred, and it is unnecessary in this case to consider whether the sum of Rs. 18,000 would become taxable in the event of disruption and partition in this family. The family is still joint, and, therefore, the question of what would occur on disruption does not arise.
The Commissioner in his letter of reference has stated that an invariable test as to whether this sum is taxable is whether the payment would cease if she ceased to be a member of an undivided family. He points out that this payment of Rs. 18,000 per annum is to be made for the lifetime of the widow, and, therefore, it would not cease if the family disrupted and partition was effected. It must be remembered that where a family separates provision must be made for the widow; and here provision is made for her life even if a separation takes place in this family. Whoever takes the property charged with maintenance will have to discharge the obligation. What may or may not happen on partition does not, in my view, affect the question as to whether this sum is taxable while the family is still joint. Whilst the assessee remains a member of the undivided family she receives this income in her capacity as such a member. If there was separation and partition, it might be argued that she was no longer a member of an undivided family, but that event has not occurred. In my judgment, as the assessee receives this annual sum as a member of an undivided Hindu family it is in her hands exempt from taxation by reason of section 14(1), Indian Income-tax Act.
For the reasons which I have given, I would answer the question submitted in the affirmative. The assessee is entitled to her costs, and I would assess the hearing fee at three hundred rupees. The assessee is also entitled to the return of Rs. 100 in deposit with the Commissioner of Income-tax.
Manohar Lall, J.:— I agree.
S.A.K
Answer accordingly.