Fazl Ali, C.J:— The question to be decided in this reference has been formulated by the Income-tax Appellate Tribunal in these words:—
“Whether in the circumstances of the case the maintenance allowance received could be said to be exempt under section 14(1) of the Income-tax Act.”
The assessee Maharani Cyan Manjuri Kuari of Hathwa is the mother of the present holder of an impartible estate known as the Hathwa estate. The estate is an ancestral one and the assessee and her son are members of a Hindu undivided family which is governed by the Mitakshara law. The estate is at present under the management of the Court of Wards which pays a certain sum as maintenance allowance to the assessee, the nature of which is described by the Appellate Assistant Commissioner of income-tax in these words:—
“The latter (the Court of Wards) determines and pays, under the Court of Wards Act, allowances of the ward and his family and dependants for their maintenance—this discretion in giving the allowances being a matter which no Court might question. The amount in issue is such a separate allowance for the maintenance of the mother of the ward, paid by the Court of Wards periodically and regularly. It passes on receipt by the mother, under her absolute control and she is under no obligation to the Court of Wards or anybody to render an account of how she spends it.”
The Appellate Assistant Commissioner was of the view that the allowance was liable to be taxed but the Appellate Tribunal held that it was exempt from taxation under section 14(1) of the Income-tax Act. The Commissioner of Income-tax being dissatisfied with the decision of the Tribunal moved the Tribunal to refer the question of law formulated above and hence this reference.
Section 14(1) of the Income-tax Act in force at the time of this assessment ran as follows:—
“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.”
Mr. Dutt, the learned Standing Counsel for the Income-tax Department, contends that this section is wholly inapplicable to the present case on two grounds which are stated to be these— (1) because section 14(1) contemplates that the receipt should be from the joint income of the family and not otherwise, whereas the income from an impartible zamindari is the absolute property of the incumbent of the estate unlike the income of an ordinary joint family estate which forms part of the joint family property; and (2) because the assessee as the mother of the holder of the estate has no vested right to receive maintenance out of the property of the holder, but her right to maintenance is based upon the son's personal obligation to maintain his aged parents.
The question would have ordinarily presented no difficulty, but the position is somewhat complicated by the fact that the estate out of which the maintenance allowance is paid is impartible and its devolution is governed by the rule of primogeniture. The incidents of an impartible estate have been considered by the Privy Council in many cases, but I shall refer here only to such of them as bear on the question as to whether an estate, though impartible, can still be regarded as joint family property. In Sartaj Kuari v. Deoraj Kuari it was held by the Judicial Committee that an impartible zamindari is alienable at the pleasure of the holder of the zamindari and the same view was reiterated in the first Pittapur case, Venkata Rao v. Court of Wards. These two cases were followed by the second Pittapur case, Raja Rama Rao v. Raja of Pittapur in which their Lordships observed as follows:—
“It was admitted on both sides of the Bar that in an ordinary joint family ruled by the Mitakshara law the junior members, down to three generations from the head of the family, have a coparcenary interest accruing by birth in the ancestral property; that this coparcenary interest carries with it the inchoate right to raise an action of partition, and that until partition is de facto accomplished these same persons have a right to maintenance. It seems clear that this right is or inherent quality of the right of coparcenary—that is, of common property. The individual enjoyment of the common property being ousted by the management of the head of the family, they have a right till they exercise their right to divide, to be maintained out of the property which is common to them, who are excluded from the management, and to the head of the family who is invested with the management. As it is expressed by the late Mr. Mayne in his work, ‘Those who would be entitled to share in the bulk of the property are entitled to have all their necessary expenses paid out of the income’. It follows that the right to maintenance, so far as founded on or inseparable from the right of co-parcenary, begins where coparcenary begins and ceases where co-parcenary ceases”.
“Their Lordships will now revert to the position of an impartible zamindari as it has been fixed by the decisions before referred to. An impartible zamindari is the creature of custom, and it is of its essence that no coparcenary exists. This being so, the basis of the claim is gone, inasmuch as it is founded on the consideration that the plaintiff is a person who, if the zamindari were not impartible, would be entitled as of right to maintenance. There is no claim based on personal relationship.”
These observations along with the decisions in Sartaj Kuari v. Deoraj Kuari and Venkata Rao v. Court of Wards appear to suggest that an impartible estate cannot in any sense be joint family property; but the true legal position has been clarified in some of the more recent cases. In Baijnath Prashad Singh v. Tej Bali Singh Lord Dunedin after explaining some of the previous decisions observed:—
“The question of how to select the head of the family in a joint family is part of the general law. That the custom of impartibility does not touch it is shown by the long list of authorities above cited, and there is, in their Lordships' view, no necessary logical deduction from the decisions in the Sartaj Kuari case and Rama Rao v. Raja of Pittapur, which forces them to an opposite conclusion.”
“Their Lordships are, therefore, of opinion that this zamindary being the ancestral property of the joint family though impartible, the successor falls to be designated according to the ordinary rule of the Mitakshara law, and that the respondent, being the person who in a joint family would, being the eldest of the senior branch, be the head of the family, is the person, designated in his impartible raj to occupy the gaddi.”
Lord Dunedin pointed out in this case that the true position was summed up in the observation made in the Tipperah case to the effect that “when a custom is found to exist it supersedes, the general law, which, however, still regulates all beyond the custom”; that is to say, such of the incidents of the joint family as are unaffected by custom are still governed by the general law. In Collector of Gorakhpur v. Ram Sundar Mal Lord. Blanesburgh summed up the effect of the decision of Lord Dunedin in these words:—
“The decision of the Board in Sartaj Kuari v. Deoraj Kuari and the First Pittapur case appeared, to be destructive of the doctrine that an impartible zamindari could be in any sense joint family property.
This view apparently implied in these cases was definitely negatived by Lord. Dunedin when delivering the judgment of the Board in 1921 in Baijnath Prasad Singh's case(5).
He then proceeded to make the following observations with reference to the right of the junior members of a family to be maintained, out of the impartible estate:—
“One result is at length clearly shown, to be that there is now no reason why the earlier judgments of the Board should not be followed, such as, for instance the Challapalli's case(6) which regarded their right to maintenance, however limited, out of an impartible estate as being based upon the joint ownership of the junior members of the family, with the result that these members-holding zamindari lands for maintenance could still be considered, as joint in estate with the zamindar in possession.”
The last observation has been the subject of considerable, comment and discussion but the fact remains that the decision in Collector of Gorakhpur v. Ram Sundar Mal reiterates and re-emphasises the principle that an impartible estate is ordinarily—though in a limited sense—joint family property. This view derives further support from the following observations made in Shibaprasad Singh v. Prayag Kumari Debee.
“Impartiality is essentially a creature of custom. In the case of ordinary joint family property, the members of the family have (1) the right of partition, (2) the right to restrain alienations by the head of the family except for necessity, (3) the right of maintenance and (4) the right of survivorship. The first of these rights cannot exist in the case of an impartible estate, though ancestral, from the very nature of the estate: The second is incompatible with the custom of impartibility as laid down in Sartaj Kuari's case and the First Pittapur case and so also the third as held in the Second Pittapur case. To this extent the general law of the Mitakshara has been superseded by custom, and the impartible estate, though ancestral, is clothed with the incidents of self-acquired and separate property. But the right of survivorship is not inconsistent with the custom of impartibility. This right therefore still remains, and this is what was held in Baijnath's case. To this extent the estate still retains its character of joint family property, and its devolution is governed by the general Mitakshara law applicable to such property.”
The proposition that an impartible estate is in a limited sense joint family property by no means implies that the income from such property belongs to the joint family. On the other hand, there is a long line of decisions in which it has been held that the income of the estate is the absolute property of the incumbent and apart from custom and relationship to the holder, the junior members of the family have no right to maintenance out of the estate though such a custom, need not be proved in regard to the sons of the holder of an estate because it has so often been judicially recognised as not to require proof. See Rani Jagdamba Kumari v. Wazir Narain Singh(7); Shibaprasad Singh v. Prayagkumari Debee; Raja of Bobbili v. Commissioner of Income-tax, Madras(8); Commissioner of Income-tax, Bihar and, Orissa v. Sir Rajendra Narayan Bhanja Deo of Kanika(9) and Raja Rama Rao v. Raja of Pittapur.
The questions which were debated before us in the present case were (1) whether for the purpose of the Income-tax Act an ancestral impartible estate can be regarded as a joint family property and (2) whether the income from such an estate is the income of the holder of the state or of the entire family. Apart from the cases to which reference has been made the most direct answer to both these questions is to be found in Commissioner of Income-tax, Punjab, North-West Frontier and Delhi Provinces, Lahore v. Dewan Bahadur Dewan Krishna Kishore, Rais, Lahore which was decided by the Privy Council in 1941. In this case it was held (1) that as regards house property for the purpose of section 9 of the Income-tax Act, 1922, the income of an impartible estate to which the assessee has succeeded by the rule of primogeniture is chargeable in his hands as that of a Hindu undivided family and not as that of an individual inasmuch as under the Hindu law the estate is owned by the joint family; and (2) that for the purpose of sections 8 and 12 of the Act the income of such an estate is chargeable in the hands of the assessee as that of an individual and not as that of a Hindu undivided family, as such income is not the income of the undivided family but is the income of the assessee notwithstanding the fact that he has sons from whom he has not divided. The statement which is most pertinent to the present case is to be found in the following passage which I quote from the judgment delivered by Sir George Rankin:—
“Though the co-ownership of the junior member may be ‘in a sense’ only, carrying no present right to joint possession, if the question be whether the Hindu undivided family or the present holder is owner of the estate the answer of the Hindu law is that it is joint family property.”
Two points thus seem to be beyond question (1) the assessee is a member of a joint family and (2) the impartible estate in the hands of her son (which at present is under the management of the Court of Wards) may for the purpose of this case be regarded as a joint family property. The question which has yet to be answered is whether she receives maintenance as a member of the joint family or otherwise. The learned Assistant Commissioner was of the view that the maintenance allowance was received by her as a regular gift on the ground of affection and regard the giver has for the recipient”. But this view seems to me to be based upon a misconception of law. The nature of a mother's right to maintenance has been explained in Mulla's Hindu Law in these words:—
“A Hindu is under legal obligation to maintain his wife, his minor sons, his unmarried daughters and his aged parents whether he possesses any property or not. The obligation to maintain these relations is personal in character, and arises from the very existence of the relation between the parties.”
It is therefore quite clear that the obligation to maintain a mother is a legal obligation. The mere fact that it is also a personal obligation and is not dependent upon possession of any property is of little importance, because it simply show that the right to maintenance possessed by the mother is even higher than the right possessed by the junior members of the family. A mother has to be maintained by a son even if he has no property, but it does not follow that she is not entitled to receive maintenance out of the joint family property if she is a member of the joint family with her son and the son is in possession of the joint family property. The point to be emphasised is that the mother is entitled to be maintained as of right both as a mother and as a member of the joint family and if she receives maintenance out of the joint family property in the hands of her son it is difficult to say that she does not receive it as a member of the Hindu undivided family as required by section 14(1). This view is supported by Commissioner of Income-tax, Central Provinces and United Provinces v. Rani Rudh Kumari. In that case a Taluqdar who had no male issue bequeathed his entire estate by will to his junior Rani. On his death the estate was taken up by the Court of Wards and the Rani was given a monthly allowance of Rs. 3,500. After some years the Rani herself made a will bequeathing the entire estate to the assessee's son who was the Rani's daughter's son's son, and directing that the monthly allowance of Rs. 3,500 should after her death be paid to the assessee, that is to say, the mother of the holder of the estate. By a subsequent arrangement the assessee was paid only Rs. 2,500 per month by the Court of Wards. It was held that the maintenance allowance received by her was exempt from taxation under section 14(1) because it was received by her as a member of the Hindu undivided family. The learned Judge who delivered the leading judgment in the case relied on Kedar Narain Singh v. Commissioner Of Income-Tax, C.P & U.P, Central Provinces and United Provinces in which it was held by a Bench of the Allahabad High Court that only those members of a Hindu undivided family can claim exemption under section 14(1) of the Act who either on partition would be entitled to demand a share or are entitled to maintenance under Hindu law and who therefore might be said to have an interest in the joint income of the property. There can be no doubt that a widowed mother is entitled to maintenance under the Hindu law out of the joint family property in the hands of her son.
In Musammat Radha Kuer v. Commissioner of Income-tax, Bihar and Orissa it was held that the widow of a deceased coparcener can be a member of a joint Hindu family and the maintenance paid to her was exempt from taxation under section 14(1) of the Income-tax Act. In Vedathanni v. Commissioner of Income-tax, Madras, it was 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) notwithstanding the fact that the maintenance allowance was paid to her under a decree for maintenance. The same view was taken in Commissioner of Income-Tax, Bombay Presidency v. Makanji Lalji. These cases do not relate to an impartible estate, but I do not see why the same principle should not apply if it is found that the widow is entitled to be maintained as a matter of right out of such an estate. I also do not see why the position of a widowed mother should be inferior to that of any other widow.
Several other cases were cited before us in the course of the argument, but I would refer here only to two of them. In Commissioner of Income-tax, Madras v. Sri Raja Vricheda Narayana Gajapati Raju Bahadur Garu it was held that a sum received as maintenance by an assessee as the brother of the last holder of an ancestral impartible estate entitled under, the law to receive maintenance out of such estate is a sum received by him as a member of a Hindu undivided family within the meaning of clause (2) of section 14 of the Income-tax Act. A similar view was expressed in Vijayananda Gajpatiraj Kumar of Vizianagram v. Commissioner of Income-tax in which the learned Judges observed—
“If the sum be considered to be in the nature of a gift pure and simple by the assessee's father and brother, it cannot be characterised as income received by a member of a Hindu undivided family as such…………It seems to us that if the assessee was, by custom applicable to the Vizianagram estate entitled to be maintained with the revenues of the estate, and, if the allowance fixed for him by his father and brother is in satisfaction of his right to be so maintained, he should be considered to have received it as a member of a Hindu undivided family.”
In my opinion, the test laid down in this passage is the true test which should be applied to this case. The assessee in the present case did not receive the maintenance as a gift pure and simple. It is said that her right to maintenance's not based on custom. But if under the law the assessee was entitled to be maintained with the revenue of the estate and if the allowance fixed for her was in satisfaction of the right to be so maintained, then she must be deemed to have received it as a member of the Hindu undivided family. A person who is entitled by law to receive maintenance cannot be in an inferior position to that of a person who is entitled to receive maintenance by custom. The question is whether the maintenance is received, by her by virtue of some right, whether based on custom or law or is the nature of a gift or indulgence.
Another important case to which reference must be made is that of Commissioner of Income-tax, Bihar and Orissa v. Maharajadhiraja Kumar Visheswar Singh which was strongly relied upon by Mr. Dutt. In that case the assessee's brother had made a babuana grant in favour of the assessee by means of an indenture in accordance with the custom prevailing in the Darbhanga Raj. In the life-time of his father the assessee was to receive an allowance of Rs. 38,000 per year but the present holder of the estate made an allowance of Rs. 48,000 per annum to the assessee in addition to the babuana grant. The question was whether the assessee was taxable in respect of Rs. 48,000 and this question was referred to the High Court and heard by a Bench of three Judges. The Bench held that the sum in question was not assessable to income-tax and the grounds for the decision were stated by Agarwala, J. who delivered the judgment in that case in these; words:—
“Once it is shown that the custom prevailing in a family does not negative the right of the junior members of the family to maintenance, their right to maintenance out of an impartible estate must be held to be based upon the joint ownership of the junior members of the family [See Collector of Gorakhpur v. Ram Sundar Mal.]
In the present case, of course, the family custom, does entitle the junior members to maintenance so that in so far as maintenance is paid out of joint family property the recipient receives it as a member of the family by virtue of his right to it and it is exempted from taxation by section 14(1).”.
In my opinion this case which is binding on this Bench is decisive of the matter before us. The only difference between the present case and the case which was before the Special Bench is that here the maintenance is given not to a junior member of the family but to the mother of the holder of the estate and her right to receive maintenance is based not upon custom but upon law. These distinctions, however, do not affect the principle which is applicable to this case.
In Raj Kumar Rananjaya Singh v. Commissioner of Income-tax, United Provinces and Central Provinces it was held that the maintenance allowance received by an assessee (who was the son of a taluqdar of Oudh) from his father out of the income of the taluqdari estate was not exempt from taxation under section 14(1) of the Income-tax Act. But the learned Judges who decided the case definitely held that the taluqdari estate in question was not in any sense of the word joint family property.
Again, in Ambica Prasad Singh v. Commissioner of Income-tax, Bihar and Orissa an annual allowance which was received by a father from his son was held not to be exempt from taxation under section 14(1). In this case, however, the assessee used to receive an annual allowance from his son out of, the property inherited by the latter from his maternal grandfather which was therefore, not joint family property. In this case as well as in a number of other cases it has been pointed out that the principle underlying section 14(1) is that the same income should not be taxed twice—that is to say, once in the hand of the joint family and again in the hand of the individual. It was contended by Mr. Dutt that in the present case there is no question of double taxation. But the argument overlooks the fact that the income of the property in the present case escapes taxation because it is a zamindari estate yielding mainly agricultural income. If the income was non-agricultural, it would have been taxed in the hands of the owner of the estate.
I would, therefore, answer the question which has been referred to us in the affirmative and hold that the maintenance allowance is exempt from taxation under section 14(1) of the Income-tax Act.
The assessee will be entitled to her costs, hearing fee Rs. 250.
Manohar Lall, J.:— I have had the advantage of reading the exhaustive judgment prepared by my Lord the Chief Justice. In my opinion after the decision of their Lordships of the Judicial Committee in Dewan Krishna Kishor's case there is no difficulty in deciding the present question. That decision lays down with regard to an impartible estate that “though the co-owhership of the junior member may be ‘in a sense’ only, carrying no present right to joint possession, if the question be whether the Hindu undivided family or the present holder is owner of the estate the answer of the Hindu aw is that it is joint family property. The assessee as an individual cannot therefore be charged in respect of it under section 9 of the Act. But their Lordships do not affirm that the family consists for this purpose solely of the assessee and his sons”. It was also pointed out at page 709: “Income is not jointly enjoyed by the party entitled to maintenance, and the party chargeable; and their Lordships see no reason to restrict the observations which they have cited from the judgment in Jagadamba's case, to the special class of cases where no maintenance is payable to any junior member. It cannot, in their view, be held that the respective chances of each son to succeed by survivorship make them all co-owners of the income with their father, or make the holder of the estate a manager on behalf of himself and them, or on behalf of a Hindu family of which he and they are some of the male members”. It will be noticed that a distinction is drawn between a co-owner of the income from an impartible estate and the ownership of the estate which still is a joint family property.
It is now no longer open to controversy that the assessee although a female is a member of the joint family and as stated just now the impartible estate in the hands of her son must be regarded as a joint family property. How else does she receive the maintenance if not as a member of the joint family? It was suggested that she receives the maintenance because of the moral or legal obligation of the son to maintain the mother, but that does not mean that she is not being maintained as a member of the joint family.
Further, I do not see how the case of the Special Bench of this Court [Commissioner of Income-tax, Bihar and Orissa v. Maharajadhiraja Kumar Visheswar Singh], can be distinguished.
For these reasons I agree that the question should be answered in favour of the assessee. I also agree that the hearing fee should be assessed at Rs. 250.
Reference answered.
K.D