GOWLI BUDDANNA vs. COMMISSIONER OF INCOME-TAX, MYSORE, BANGALORE

CIVIL APPEAL No. 328/1965Supreme Court[1966] 3 S.C.R. 22410 January 1966Bench: 3 JudgesAuthor: K. SUBBA RAO, J.C. SHAH, S.M. SIKRI A11 pages
AI SummaryDismissed

What were the facts?

The assessee, Gowlibuddanna, was the adopted son of Buddappa. Buddappa, his wife, two unmarried daughters, and the assessee were members of a Hindu undivided family. Buddappa was assessed as the manager of this family. After Buddappa's death, for the assessment year 1951-52, the Income-tax Officer assessed the assessee (Buddanna) on the income derived from the family's business dealings, treating it as income of a Hindu undivided family. The assessee contended that he should be assessed as an individual. This assessment was confirmed by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. The High Court, on reference, also upheld the assessment.

What did the Supreme Court hold?

The Tribunal held that the property of a joint family does not cease to belong to the family merely because it is represented by a single coparcener who possesses rights akin to an owner. In this case, the property originally belonged to a Hindu undivided family. Upon Buddappa's death, although the family was represented solely by the assessee, the property continued to be that of the undivided family, and its income was taxable as such. The Tribunal clarified that under Section 3 of the Act, a Hindu undivided family, not a Hindu coparcenary, is an assessable entity. A Hindu joint family includes wives and unmarried daughters, and can consist of a single male member and widows of deceased coparceners. The contention that at least two male members are required for a Hindu undivided family to be a taxable entity was rejected. The Tribunal expressly left undecided the question of whether a Hindu undivided family consisting of a single member (male or female) can be treated as a taxable entity under the Act.

What were the issues?

1. Whether a sole surviving male coparcener, along with his widowed mother and sisters, constitutes a Hindu undivided family within the meaning of the Income-tax Act, 1922? (Question of law, turning on Section 3 of the Act). The assessee argued that the expression 'Hindu undivided family' means a Hindu coparcenary, and when only one coparcener remains, assessment cannot be made in the status of a Hindu undivided family. Alternatively, even if it means a Hindu joint family, there must be at least two male members for it to be a taxable entity, and in their absence, the sole surviving male member should be assessed as an individual. The revenue contended that the entity is a Hindu undivided family as defined in Hindu law, irrespective of the number of male members, and the property continued to belong to the family.

Which sections of the Income-tax Act were involved?

Section 3,Section 66(1),Section 66-A(2)

AI-generated summary — verify with the full judgment below

GOWLIBUDDANNA A v. COMMISSIONER OF INCOME-TAX, MYSORE, , BANGALORE .. .

January 10, 1966 B [K. SUDDA RAO, J. C. SHAH AND S. M. SIER!, JJ.] lnc<nne Tax Act, 1922 (II o/ 1922), 1. 3-Hlndu undivid1d fom//y- Whether includes ;oint family with one surviving male mtmber and /nna/e member-1. ' B, hill wife, his two unmarried daughters and the appellant who was c B's adop!cd son, were members of a Hindu undi\'ided family. In respect of the income from dealings of the family, B was assessed during his JifjH,jmc in tho status of a manager of the Hindu undivided family. After ru. death for the ~ent year 1951-52, the Incom<rtax Ofllcer UICllCd the appellant on the basis that tho income waa that of a Hindu undivided family and rejected the latter's contention that he should be assessed as an indhidual. The order of assessment was confirmed by the Appellate Aaalotant Commissioner, the Tribunal and on a reference, by tbo Hi&h D Coun.

It was contended on behalf of the appellant that tbe expression 'Hindu • undivided family' used in s. 3 of the Income Tax Act, 1922, means a '

Hindu coparcenary and when on the death of one out of two c~arcCllll'3 the enfjre property devo

The order continues below.

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