Mishra, J.@mdashThe two questions referred to the Court for opinion are whether, on the facts and in the circumstances of the case, the Tribunal
is justified in law in holding that the income of the estate of the deceased person subsequent to the date of death is assessable under s. 168 in the
hands of the executor and whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that in view of the
application of s. 168 there is no scope for application of s. 26 and that the estate for the purpose of assessment under s. 168 is to be considered as
a single estate without any right of co-ownership ?
2. Smt. P. Visalakshi and Smt. P. Savithri, two sisters, it is said inherited the estate of K. Periyaswamy (who died intestate on 28th Aug., 1975),
along with four others including their mother, P. Balammal, their grandmother (mother of their father), Smt. K. Meenakshi, and two other sisters.
Periyaswamy owned a building at Karur along with his partner, Sri K. Ponnuswamy, in equal shares. He was also a partner in the firms Amarjothi
Fabrics and Amarjothi Traders, which were carrying on business in textiles. Periyaswamy retired from the partnership and the money due to him
was held by the firms as deposit. He received interest thereon. Thus the estate left by him on his death was the half-share in the property in Karur
and the deposit with the firms. His widow, Balammal, filed a return disclosing Rs. 6,976 as income from house property and Rs. 27,426 as income
by way of interest and claimed that she administered the estate of the deceased K. Periyaswamy. The ITO considered that on the death of
Periyaswamy, his heirs including the two daughters abovenamed succeeded to the property under s. 8 of the Hindu Succession Act, that they took
the property as tenants-in-common as provided under s. 19(b) of the Hindu Succession Act and, consequently, were entitled to 1/6th of the
income and each was liable to be assessed on such 1/6th portion of the income from the estate. He accordingly made the assessment in which he
included 1/6th share of the income from the property of the deceased and other sources. The assessees appealed contending in the appeals that
Balammal was the executor of the estate of the deceased Periyaswamy in terms of s. 168 r/w the Explanation thereto of the IT Act, 1961,
hereinafter referred to as ""the Act"". They thus were not liable to be assessed on the 1/6th share of the income from the property which belonged to
Periyaswamy, the deceased. The AAC accepted their case. The Revenue preferred an appeal before the Tribunal. The Tribunal recorded its
agreement with the view of the AAC.
3. Chapter XV of the Act deals with special cases of tax liability and incorporates a general provision under s. 159 falling under the said Chapter
that where a person dies, his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not
died, in the like manner and to the same extent as the deceased. Sec. 160 defines a representative assessee to mean (i) in respect of the income of
a non-resident specified in sub-s. (1) of s. 9, the agent of the non-resident, including a person who is treated as an agent under s. 163; (ii) in
respect of the income of a minor, lunatic or idiot, the guardian or manager who is entitled to receive or is in receipt of such income on behalf of
such minor, lunatic or idiot; (iii) in respect of income which the Court of Wards, the Administrator-General, the Official Trustee or any receiver or
manager (including any person, whatever his designation, who in fact manages property on behalf of another) appointed by or under any order of a
Court, receives or is entitled to receive, on behalf or for the benefit of any person, such Court of Wards, Administrator-General, Official Trustee,
receiver or manager; (iv) in respect of income which a trustee appointed under a trust declared by a duly executed instrument in writing whether
testamentary or otherwise [including any wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913)], receives or is
entitled to receive on behalf, or for the benefit, of any person, such trustee or trustees. Sec. 163 defines an agent, s. 164 speaks about the charge
of tax where the share of the beneficiaries is unknown; s. 165 speaks of cases where part of the trust income is chargeable and s. 168 states as
follows :
168. Executors. - (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the
executor, -
(a) if there is only one executor, then, as if the executor were an individual; or
(b) if there are more executors than one, then, as if the executors were an AOP;
and for the purposes of this Act, the executor shall be deemed to be resident or non-resident according as the deceased person was a resident or
non-resident during the previous year in which his death took place.
(2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own
income.
(3) Separate assessments shall be made under this section on the total income of each completed previous year or part thereof as is included in the
period from the date of the death to the date of complete distribution to the beneficiaries of the estate according to their several interests.
(4) In computing the total income of any previous year under this section, any income of the estate of that previous year distributed to, or applied
to the benefit of, any specific legatee of the estate during that previous year shall be excluded; but the income so excluded shall be included in the
total income of the previous year of such specific legatee.
Explanation. - In this section, ''executor'' includes an administrator or other person administering the estate of a deceased person.
4. In the case of Commissioner of Income Tax, Bombay City-II Vs. Usha D. Shah, , a Bench of the Bombay High Court has said that the term
executor"" is not to be understood in the restricted sense of the term as the Explanation to the section gives an extended meaning to the word so as
to include an administrator or other person administering the estate of the deceased person. The Court said so while expressing its opinion on the
question whether the assessee was liable to Income Tax assessment in respect of any income arising from the undistributed personal estate of her
deceased husband and in respect of any income arising from the undistributed share of the interest of the deceased in the joint family of his father,
Kantilal. The Bombay High Court has said :
The effect of s. 168 is that it is made obligatory that the estate of a deceased person is charged to tax in the hands of an executor. It is important
to note that the words used are ''estate of a deceased person shall be chargeable to tax in the hands of the executor''. The provision in s. 168(1)
does not, therefore, seem to leave any discretion to the IT authorities in respect of assessing the income of the estate of a deceased person to tax.
Such income is to be taxed in the hands of the executor. The word ''executor'' is not to be understood in the restricted sense of the term because
by the Explanation it has been given an extended meaning to include an administrator or other person administering the estate of a deceased
person. A person who is actually administering the estate of a deceased person, therefore, would for the purposes of s. 168 be an executor in
whose hands the income of the estate of the deceased person must be charged to tax. The extended definition is obviously intended to include a
person who is in de facto management of the property of the deceased person. It is true that Dinesh in this case has not left any will. There was no
executor in that sense nor were any letters of administration obtained, but the mother of Dinesh was in fact in management of the entire estate of
Dinesh after his death. In view of the wide definition of ''executor'' made by the Explanation, she would be covered by the definition and, as earlier
pointed out, since there was no discretion left with the tax authorities, the income from the estate of Dinesh could be charged to tax only in the
hands of his mother, Pushpavati. The necessary consequence must be that the income which was sought to be included as income of the assessee
could not be brought to tax in her hands.
5. The Bombay High Court again, however, considered the liability to wealth-tax and the scope of s. 19A in short the liability to be assessed on
inherited assets in the case of Commissioner of Wealth-tax, Bombay City-II Vs. Keshub Mahindra, . The argument before the Court was that
though the deceased father had died intestate and he had not left any will and, therefore, the assessee could not claim to be an executor or an
administrator because he had not obtained any letters of administration, still he was a person who was administering the estate of the deceased
person, as contemplated by the Expln. to s. 19A of the WT Act. Relying upon the observations of a decision of this Court in A. and F. Harvey
Ltd. as Agents to Executors of the Estate of Late Andrew Harvey Vs. Commissioner of Wealth-tax, and its own assessment of the law on the
subject the Bombay High Court in this judgment referred to the abovecited judgment and observed as follows :
Now, that was a case in which the husband of the assessee had died and the other members of the family of the husband had disputed the very
status of the assessee as the wife of Dinesh, who had died. Admittedly, the entire estate left behind by Dinesh was being managed by Dinesh''s
mother or the assessee''s mother-in-law. There was ultimately, a settlement between the assessee and the other members of the family, as a result
of which the assessee had received a sum of Rs. 10,70,000, in full satisfaction of her claim as the widow of deceased, Dinesh. This settlement took
place on 16th Aug., 1963. In the assessment of the assessee for the asst. yrs. 1961-62, 1962-63 and 1963-64, the assessee had disclosed certain
income which did not include any part of income from the estate left behind by Dinesh. What the ITO wanted to do was that he wanted one-sixth
share of the income arising from the property, business and other sources of the HUF of Kantilal Manilal, the father of Dinesh, to be included as
the income of the assessee. The income of the entire property of Dinesh was shown by the mother-in-law in her return, and the ITO wanted one-
sixth of that income to be included in the income of the assessee. The compromise which had taken place specifically provided that till such time as
the distribution of the estate did in effect take place, the income before the distribution of the estate had to be taxed in the hands of the mother-in-
law, in her capacity as the administrator of the estate. On those facts, the Division Bench held that the estate was being administered by the
mother-in-law and having regard to the provisions of s. 168, the income of the estate must be taxed in her hands.
The Bombay High Court in this case also observed :
The nature of the charge in the two Acts has no similarity. While under the Indian IT Act the liability to pay Income Tax accrues on the income
earned throughout the accounting year, the liability to be assessed to wealth-tax arises only in respect of the net wealth held on a particular date,
namely, the valuation date. Therefore, if a person is not alive on the valuation date and he dies before the valuation date, under the provisions of the
Act, there is no question at all of that person being assessed to wealth-tax for any period prior to the valuation date, and, with respect, we may
point out that the concept of assessment for the whole of the financial year appears to be foreign to the provisions of the Act.
The Court has observed that the WT Act and the IT Act are not in pari materia at all; the nature of the charge in the two Acts has no similarity.
6. Referring to the word ""executor"" as defined in the Expln. to s. 168 of the Act while dealing with a case of liability to estate duty, a Bench of the
Gujarat High Court, however, in Commissioner of Income Tax, Gujarat -I Vs. Navnitlal Sakarlal, said :
The word ''executor'' as defined in the Expln. to s. 168 of the IT Act, 1961, means an executor as known under the Indian Succession Act, 1925,
as well as an administrator known under the Indian Succession Act and, what is more, any other person administering the estate of a deceased
person is also included in this special definition of ''executor'', though, under the Indian Succession Act, such other person administering the estate
of the deceased would never be referred to either as an ''executor'' or as an ''administrator''.
That was a case of a person who had executed a will and had considerable self-acquired movable properties in his individual right and a half-share
in certain coparcenary properties. The remaining half-share belonged to another. The will provided that, after discharging all the debts, liabilities
and obligations and after meeting the expenses of illness, obsequial ceremonies and disbursing charities out of his self-acquired properties, the said
properties as also his right, title and interest in the coparcenary properties would, on his death, devolve upon the two grandsons of Balabhai,
namely, the assessee and his brother, Nandkishore, and in accordance with the terms of the will the assessee and his brother were to become
entitled to use and enjoy the same. No person was named in the will as the administrator or executor of the will and according to the provisions of
the will the legatees themselves were to take possession of the properties of the testator on his death. One of the sons, however, describing himself
as the legal representative of the deceased furnished returns in respect of the income of the estate. His case was that since the administration and
distribution of the estate had not been completed till 5th Aug., 1970, only he could be assessed in respect of the income from the estate for those
assessment years in representative capacity. The Department''s contention was that the administration of the estate must be held to have become
complete and the estate should be deemed to have been distributed. The Tribunal came to the conclusion that the assessee was not taxable in
respect of any part of the income of the estate because the administration of the estate of the deceased was not complete and the actual distribution
of the estate of the deceased had not commenced before the due date. The Gujarat High Court held, however, that the assessee was an ""executor
within the meaning of s. 168 of the Act in these words :
It is worthwhile noting that this definition is an inclusive section and hence by well-settled canons of construction of statutes, the word ''executor''
in s. 168 means an executor as known under the Indian Succession Act, as well as an administrator known under the Indian Succession Act, and,
what is more, any other person administering the estate of a deceased person is also included in this special definition of the word ''executor''
though, under the Indian Succession Act, such other person administering the estate of the deceased would never be referred to either as an
''executor'' or as an ''administrator''. Under the scheme of the Indian Succession Act, an executor is the person who is named in the will by the
testator himself for administering his estate whereas an administrator is a person appointed by a competent Court to administer the estate of a
deceased person. By the extended definition set out in the Expln. to s. 168 of the IT Act, 1961, an executor and an administrator appointed by the
Court and any other person administering the estate of a deceased person are all included in the extended meaning of the word ''executor'' for
purposes of s. 168. Under s. 159 of the IT Act, 1961, it has been provided that where a person dies, his legal representative shall be liable to pay
any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. Under s.
2(29) of the IT Act, 1961, a ''legal representative'' has the meaning assigned to it in cl. (11) of s. 2 of the CPC, 1908. When one turns to the CPC,
one finds that s. 2(11) of the CPC defines a ''legal representative'' to mean a person who in law represents the estate of a deceased person, and
includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person
on whom the estate devolves on the death of the party so suing or sued. Therefore, reading the provisions of s. 2(11) of the CPC in the light of the
provisions of s. 2(29) of the IT Act, 1961, and the provisions of s. 159 of the IT Act, 1961, it is clear that an executor who certainly represents
the estate of a deceased person in law and an administrator who also similarly represents the estate of a deceased person in law, and what is more,
any person who intermeddles with the estate of the deceased, all fall within the definition of ''legal representative'' for the purpose of the IT Act and
it is such a legal representative who is referred to in s. 159 of the IT Act and it is such a legal representative who is liable to pay any sum which the
assessee would have been liable to pay, if he had not died, in the like manner and to the same extent so far as the provisions of the IT Act are
concerned.
Rejecting the contention that the expression ""executor"" occurring in s. 168 of the Act should receive a meaning restricted to what is recognised as
executor"" or ""administrator"" in terms of the Indian Succession Act, the Gujarat High Court observed :
Whatever the position might have been prior to the enactment of the IT Act, 1961, so far as this Act is concerned, any person who in fact
administers an estate of a deceased person either by intermeddling with it and thus becoming an executor of his own wrong or by virtue of letters of
administration granted to him in any one of the five manners known to law or by virtue of the fact that he is an executor named by the testator in the
will, a person who actually administers the estate would be an executor for purposes of s. 168 and under the provisions of s. 168, sub-s. (3),
separate assessments have to be made under s. 168 on the total income of each completed previous year or part thereof as is included in the
period from the date of death to the date of complete distribution to the beneficiaries of the estate according to their several interests.
The Gujarat High Court derived support for the above view from the judgment of the Supreme Court in the case of Administrator-general of West
Bengal Vs. Commissioner of Income Tax, Calcutta, and the observations in V.M. Raghavalu Naidu and Sons by executors, C.G. Krishnaswami
Naidu and Another Vs. Commissioner of Income Tax and Excess Profits Tax, of a learned Judge of this Court.
7. In Rani Jagadamba Kumari Devi Vs. Commissioner of Income Tax, , the Calcutta High Court said as follows :
This question was considered by the Madras High Court in the case of V. Ramanathan Vs. Commissioner of Income Tax, Madras, , where it was
held that the heirs who succeeded to the estate, an executor or administrator in whom the estate vests virtue officii and even an intermeddler in
possession of the estate, effectively represented the estate.
8. The judicial opinion, thus, is in favour of an extended meaning given to the word ""executor"" and even a person who had entered upon such a
property on account of default of others or is in possession of the estate of the deceased de facto is included in the definition of the word
executor"". In the case of a family which at some stage was joint and undivided, tenancy in common alone may not be enough to treat it as divided
and a special mention in this behalf is necessary to partition as understood under the Hindu law including the Hindu Succession Act and under s.
171 of the Act (IT Act). Sec. 171 of the Act says that a Hindu family assessed as undivided shall be deemed for purposes of the Act to continue
to be an HUF, except where and in so far as a finding of partition has been given under the section in respect of the HUF. Partition in this section is
defined as follows :
(a) ''Partition'' means -
(i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical
division of the property producing the income shall not be deemed to be a partition; or
(ii) where the property does not admit of a physical division, then such division as the property admits of, but a mere severance of status shall not
be deemed to be a partition;
(b) ''partial partition'' means a partition which is partial as regards the persons constituting the HUF, or the properties belonging to the HUF, or
both.
9. A Bench of this Court (of which one of us was a member) had occasion to deal with a case of a Hindu who had a family consisting of his wife
and unmarried minor daughters and who purportedly put certain monies in the common stock of the family, calling it an HUF and such monies in
the common stock were later gifted by him to the wife and minor daughters, in TC No. 1189 of 1981, judgment dt. 10th Nov., 1994 [ K.V. Iyer
Vs. Commissioner of Income Tax, ] and in the judgment the Court has noted various authorities and held that the HUF must be construed in the
sense in which it is understood in the Hindu law. Noting the consensus that the phrase HUF is used in the statute with reference, not to one school
only of Hindu law, but to all schools, outside the limits of the coparcenary, there is fringe of persons, males and females who constitute an
undivided or joint family; there is no limit to the number of persons who can compose it or to their remoteness from the common ancestor and to
their relationship with one another; a joint Hindu family consists of persons lineally descended from a common ancestor and includes their wives
and unmarried daughters; the daughter, on marriage, ceases to be a member of her father''s family and becomes a member of her husband''s family,
the joint Hindu family is thus a larger body consisting of a group of persons who are united by the tie of sapindaship arising by birth, marriage or
adoption, and the joint Hindu family is a creature of law under which the absence of an antecedent history of jointness is of no impediment for a
sole Hindu male forming a joint family with his wife and unmarried daughters. In that case, the Court has held :
It is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be
determined whether the family property can properly be decided as joint family property of the HUF or not. By throwing into the common stock of
the family, whether the assessee in the instant case created any interest in favour of the other family members or not, he had created a common
stock of the family. The common stock of the family must be construed to be one which is covered by sub-s. (2) of s. 4 of the GT Act.
10. In a short cryptic and trite statement of law, a Bench of the Rajasthan High Court in the case of Commissioner of Income Tax Vs. M.M. Jain,
considered the question whether the self acquired property of a father dying intestate after the coming into force of the Hindu Succession Act is to
be treated as ancestral property in the hands of the son and answered it in these words :
It is settled principle of law that even the self acquired property of a father dying intestate coming to the son is to be treated as ancestral property
in the hands of the son.
11. In Commissioner of Income Tax, Madras Vs. Rm. Ar. Ar. Veerappa Cheitiar, , the Supreme Court has said that under the Hindu law it is not
predicated of a Hindu joint family that there must be a male member and so long as the property which was originally of the joint Hindu family
remains in the hands of the widows of the members of the family and is not divided among them, the joint family continues. It was a case of one A,
who had three wives, V, L and N, had a son, B, whose wife was U. A constituted an HUF possessing a large estate in Ceylon. B died in 1934. A
died in 1938 leaving him surviving L and N and U. The Ceylon Revenue authorities levied estate duty on the death of A and B. The levy was
challenged and ultimately the Privy Council set aside the entire levy. In 1957, the Ceylon Government deposited in Court the duty as well as the
interest thereon which had been realised from the estate of the deceased A and the deceased B. In the meantime, disputes arose between L, N
and U and a suit for partition was filed. A settlement was reached whereby the three widows L, N and U, each adopted a son and the estate was
divided on 17th Feb., 1947. The respondent, the son adopted by U, who was entitled to 5/24ths of the estate, received a sum of money being his
share of the interest on the estate duty. The question was whether any part of it was assessable to tax. The High Court held that the interest
referable to the period up to 17th Feb., 1947, was capital in nature and that referable to the period thereafter was income. The Revenue appealed
to the Supreme Court. The Supreme Court held that : ""after the death of A the property was held by the three widows as members of an HUF.
Payment of the estate duty was doubtless made out of joint family funds and the interest which accrued due also acquired the character of joint
family property when received. The amount of interest accrued as income of the family but it was not the income of the individual members. When
a share out of the estate which included the interest on estate duty was received by the respondent it had not the character of income. Once the
income was received by the joint family, the amount lost its character of income; it became merged in the joint family assets and became the capital
of the family. The share received by the respondent was, therefore, a share in the capital of the family"". The Supreme Court on that basis said :
So long as the property which was originally of the joint Hindu family remains in the hands of the widows of the members of the family and is not
divided among them, the joint family continues.
Some problems, it appears, cropped up on account of the provisions under the Hindu Succession Act, such as s. 6 which has provided that when
a male Hindu dies after the commencement of the Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest
in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with the Act. Provided that, if
the deceased had left surviving him a female relative specified in class I of the Schedule or a male relative specified in that class who claims through
such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as
the case may be, under the Act and not by survivorship. By the two Explanations, the law has recognised for the purposes of the above that the
interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the
property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not and nothing contained in the
proviso shall be construed as enabling a person who has separated himself from the coparcenary before the death of the deceased or any of his
heirs to claim on intestacy a share in the interest referred to therein. The Explanations also say that the section has to be r/w ss. 8 and 30 of the
Act, which provide for the general rules of succession in the case of males and testamentary disposition in accordance with the provisions of the
Indian Succession Act, 1925, or any other law for the time being in force and applicable to Hindus.
12. A Bench of the Madhya Pradesh High Court in the case of Commissioner of Wealth-tax Vs. Rameshwar Lal Agarwal, has considered a case
of assessment under the WT Act. The assessee filed his returns in the status of an HUF on the ground that after the death of his father, which was
after the Hindu Succession Act, 1956, came into force, whatever property was left, was, in fact, the property of the HUF consisting of himself, his
wife and his son. The WTO assessed him as an individual on the ground that the concept of an HUF had been done away with after the Hindu
succession Act, 1956, came into force and whatever property devolved on the heir, assumed the character of individual property. The Tribunal
held that in cases of Hindus governed by the Mitakshara law, where a son inherited the self acquired property of his father, the son took it as the
joint family property of himself and his son and, therefore, the proper status of the assessee was that of an HUF. The High Court held that the
Tribunal was justified in holding that the property left by the assessee''s father was the property of the HUF consisting of the assessee, his son and
wife. The Madhya Pradesh High Court in this judgment has, besides other cases, taken notice of two judgments of the Supreme Court, one in the
case of Gurupad Khandappa Magdum Vs. Hirabai Khandappa Magdum and Others, and another in the case of State of Maharashtra Vs.
Narayan Rao Sham Rao Deshmukh and Others, .
13. The Supreme Court in the former case, viz., Gurupad Khandappa Magdum vs. Hirabai Khandappa Magdum (supra) considered the case of a
plaintiff, who was the wife of one Khandappa Sangappa Magdum, who died on 27th June, 1960, leaving behind him, the plaintiff, two sons
Gurupad and Shivpad (defendants Nos. 1 and 2, respectively) and three daughters, defendants Nos. 3 to 5. Hirabai filed the suit for partition and
separate possession of 7/24ths share in two houses, land, two shops and movables on the basis that these properties belonged to the joint family
consisting of her husband, herself and two sons and alleged that if a partition were to take place during Khandappa''s lifetime between himself and
his two sons, the plaintiff would have got a 1/4th share in the joint family properties, the other three getting a 1/4th share each, and Khandappa''s
1/4th share would devolve upon his death on six sharers; the plaintiff and her five children, each having a 1/24th share therein. The plaintiff,
accordingly, claimed 7/24th share in the joint family properties. The defendants admitted the plaintiff''s claim except the first defendant, who
contested. He contended that the suit properties did not belong to the joint family, that they were Khandappa''s self acquisition and that, on the
date of Khandappa''s death in 1960, there was no joint family in existence. He alleged that Khandappa had effected a partition of the suit
properties between himself and his two sons, in December, 1952, and December 1954, and that, by a family arrangement dt. 31st March, 1955,
he had given directions for the disposal of the share which was reserved by him for himself in the earlier partitions. The trial Court rejected the first
defendant''s case that the properties were Khandappa''s self acquisitions and that he had partitioned them during his lifetime. Upon that finding the
plaintiff became indisputably entitled to a share in the joint family properties but following the judgment of the Bombay High Court in Shiramabai
Vs. Kalgonda Bhimgonda and Others, , the trial Judge limited that share to 1/24th, refusing to add 1/4th and 1/24th together. As against that
decree, the first defendant filed an appeal in the Bombay High Court. The plaintiff filed cross objections. A Division Bench of the Bombay High
Court dismissed the first defendant''s appeal and allowed the plaintiff''s cross objections by holding that the suit properties belonged to the joint
family, that there was no prior partition and that the plaintiff is entitled to a 7/24ths share. The first defendant moved the Supreme Court. It is
important to note that before the appeal was taken up for hearing by the Supreme Court, another Division Bench of the Bombay High Court in
Rangubai Vs. Laxman Lalji Patil, , had already reconsidered and dissented from the earlier Division Bench judgment in Shiramabai vs. Kalgonda
Bhimgonda''s case (supra). One learned Judge was common to the two Benches. In the later judgment, the Bombay High Court observed that
Shiramabai''s case (supra), was not fully argued and was incorrectly decided and that on a true view of the law, the widow''s share must be
ascertained by adding the share to which she is entitled at a notional partition during her husband''s lifetime and the share which she would get in
her husband''s interest upon his death. In this judgment, the Supreme Court extracted s. 6 of the Hindu Succession Act, the Explanations thereto
and referred to s. 14(1) thereof. The Supreme Court has stated as follows :
The Hindu Succession Act came into force on 17th June, 1956, Khandapa having died after the commencement of that Act, to wit in 1960, and
since he had at the time of his death an interest in Mitakshara coparcenary property, the pre-conditions of s. 6 are satisfied and that section is
squarely attracted. By the application of the normal rule prescribed by that section, Khandappa''s interest in the coparcenary property would
devolve by survivorship upon the surviving members of the coparcenary and not in accordance with the provisions of the Act. But, since the
widow and daughter are amongst the female relatives specified in class I of the Schedule to the Act and Khandappa died leaving behind a widow
and daughters, the proviso to s. 6 comes into play and the normal rule is excluded. Khandappa''s interest in the coparcenary property would,
therefore, devolve, according to the proviso, by intestate succession under the Act and not by survivorship. Testamentary succession is out of
question as the deceased had not made a testamentary disposition though, under the Expln. to s. 30 of the Act, the interest of a male Hindu in
Mitakshara coparcenary property is capable of being disposed of by a will or other testamentary disposition.
There is thus no dispute that the normal rule provided for by s. 6 does not apply, that the proviso to that section is attracted and that the decision of
the appeal must turn on the meaning to be given to Expln. 1 to s. 6.......
Before considering the implications of Expln. 1, it is necessary to remember that what s. 6 deals with is devaluation of the interest which a male
Hindu has in a Mitakshara coparcenary property at the time of his death. Since Expln. 1 is intended to be explanatory of the provisions contained
in the section, what the Explanation provides has to be co-related to the subject-matter which the section itself deals with. In the instant case, the
plaintiff''s suit, based as it is on the provisions of s. 6, is essentially a claim to obtain a share in the interest which her husband had at the time of his
death in the coparcenary property. Two things become necessary to determine for the purpose of giving relief to the plaintiff. One, her share in her
husband''s share and two, her husband''s own share in the coparcenary property. The proviso to s. 6 contains the formula for fixing the share of the
claimant while Expln. 1 contains a formula for deducing the share of the deceased. The plaintiff''s share, by the application of the proviso, has to be
determined according to the terms of the testamentary instrument, if any, made by the deceased and since there is none in the instant case, by the
application of the rules of intestate succession contained in ss. 8, 9 and 10 of the Hindu Succession Act. The deceased, Khandappa, died leaving
behind him two sons, three daughters and a widow. The son, daughters and widow are mentioned as heirs in class I of the Schedule and,
therefore, by reason of the provisions of s. 8(a) r/w the first clause of s. 9, they take simultaneously and to the exclusion of other heirs. As between
them the two sons, the three daughters and the widow will take equally, each having one share in the deceased''s property under s. 10 r/w rr. 1
and 2 of that section. Thus, whatever be the share of the deceased in the coparcenary property, since there are six sharers in that property each
having an equal share, the plaintiff''s share therein will be 1/6th.
The next step, equally important, though not equally easy to work out, is to find out the share which the deceased had in the coparcenary property
because, after all, the plaintiff has a one-sixth interest in that share. Expln. 1 which contains the formula for determining the share of the deceased
creates a fiction by providing that the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have
been allotted to him if a partition of the property had taken place immediately before his death. One must, therefore, imagine a state of affairs in
which a little prior to Khandappa''s death, a partition of the coparcenary property was effected between him and the other members of the
coparcenary. Though the plaintiff, not being a coparcener, was not entitled to demand partition yet, if a partition were to take place between her
husband and his two sons, she would be entitled to receive a share equal to that of a son. (See Mulla''s Hindu Law, 14th Edn., page 403,
paragraph 315). In a partition between Khandappa and his two sons, there would be four sharers in the coparcenary property, the fourth being
Khandappa''s wife, the plaintiff. Khandappa would have, therefore, got a one-fourth share in the coparcenary property on the hypothesis of a
partition between himself and his sons.
Two things are thus clear : One, that in a partition of the coparcenary property Khandappa would have obtained a 1/4th share and two, that the
share of the plaintiff in the 1/4th share is a 1/6th share, that is to say, 1/24th. So far there is no difficulty. The question which poses a somewhat
difficult problem is whether the plaintiff''s share in the coparcenary property is only 1/24th or whether it is 1/4th plus 1/24th, that is to say, 7/24ths.
The learned trial Judge, relying upon the decision in Shiramabai Vs. Kalgonda Bhimgonda and Others, , which was later overruled by the Bombay
High Court, accepted the former contention while the High Court accepted the latter. The question is which of these two views is to be preferred.
We see no justification for limiting the plaintiff''s share to 1/24th by ignoring the 1/4th share which she would have obtained had there been a
partition during her husband''s lifetime between him and his two sons. We think that in overlooking that 1/4th share, one unwittingly permits one''s
imagination to boggle under the oppression of the reality that there was in fact no partition between the plaintiff''s husband and his sons. Whether a
partition had actually taken place between the plaintiff''s husband and his sons is beside the point for the purpose of Expln. 1. That Explanation
compels the assumption of a fiction that in fact ''a partition of the property had taken place'', the point of time of the partition being the one
immediately before the death of the person in whose property the heirs claim a share.
The fiction created by Expln. 1 has to be given its due and full effect as the fiction created by s. 18A(9)(b) of the Indian IT Act, 1922, was given
by this Court in Commissioner of Income Tax, Delhi Vs. S. Teja Singh, . It was held in that case that the fiction that the failure to send an estimate
of tax on income under s. 18A(3) is to be deemed to be a failure to send a return, necessarily involves the fiction that a notice had been issued to
the assessee under s. 22 and that he had failed to comply with it. In an important aspect, the case before us is stronger in the matter of working out
the fiction because in Teja Singh''s case (supra), a missing step had to be supplied which was not provided for by s. 18A(9)(b), namely, the
issuance of a notice under s. 22 and the failure to comply with that notice. Sec. 18A(9)(b) stopped at creating the fiction that when a person fails to
send an estimate of tax on his income under s. 18A(3), he shall be deemed to have failed to furnish a return of his income. The section did not
provide further that in the circumstances therein stated, a notice under s. 22 shall be deemed to have been issued and the notice shall be deemed
not to have been complied with. These latter assumptions in regard to the issuance of the notice under s. 22 and its non-compliance had to be
made for the purpose of giving due and full effect to the fiction created by s. 18A(9)(b). In our case, it is not necessary, for the purposes of
working out the fiction, to assume and supply a missing link which is really what was meant by Lord Asquith in his famous passage in East End
Dwellings Co. Ltd. vs. Finsbury Borough Council (1952) AC 109. He said :
''If you are bidden to treat an imaginary state of affairs as real, you must also imagine as real the consequences and incidents which, if the putative
state of affairs had in fact existed, must inevitably have flowed from or accompanied it; and if the statute says that you must imagine a certain state
of affairs, it cannot be interpreted to mean that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable
corollaries of that state of affairs.''
In order to ascertain the share of heirs in the property of a deceased coparcener, it is necessary in the very nature of things, and as the very first
step, to ascertain the share of the deceased in the coparcenary property.... Expln. 1 to s. 6 resorts to the simple expedient, undoubtedly fictional,
that the interest of a Hindu Mitakshara coparcener ''shall be deemed to be'' the share in the property that would have been allotted to him if a
partition of that property had taken place immediately before his death. What is, therefore, required to be assumed is that a partition had in fact
taken place between the deceased and his coparceners immediately before his death. That assumption, once made, is irrevocable. In other words,
the assumption having been made once for the purpose of ascertaining the share of the deceased in the coparcenary property, one cannot go back
on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made that a partition
had in fact taken place must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. To make the
assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of
the share of the heirs is truly to permit one''s imagination boggle. All the consequences which flow from a real partition have to be logically worked
out, which means that the share of the heirs must be ascertained on the basis that they had separated from one another and had received a share in
the partition which had taken place during the lifetime of the deceased. The allotment of this share is not a processual step devised merely for the
purpose of working out some other conclusion. It has to be treated and accepted as a concrete reality, something that cannot be recalled just as a
share allotted to a coparcener in an actual partition cannot generally be recalled. The inevitable corollary of this position is that the heir will get his
or her share in the interest which the deceased had in the coparcenary property at the time of his death, in addition to the share which he or she
received or must be deemed to have received in the notional partition.
The interpretation which we are placing upon the provisions of s. 6, its proviso and Expln. 1 thereto, will further the legislative intent in regard to the
enlargement of the share of female heirs, qualitatively and quantitatively. The Hindu Law of Inheritance (Amendment) Act, 1929, conferred heirship
rights on the son''s daughter, daughter''s daughter and sister in all areas where the Mitakshara law prevailed. Sec. 3 of the Hindu Women''s Right
to Property Act, 1937, speaking broadly, conferred upon the Hindu widow the right to a share in the joint family property as also a right to
demand partition like any male member of the family. The Hindu Succession Act, 1956, provides by s. 14(1) that any property possessed by a
female Hindu, whether acquired before or after the commencement of the Act, shall be held by her as a full owner thereof and not as a limited
owner. By restricting the operation of the fiction created by Expln. 1 in the manner suggested by the appellant, we shall be taking a retrograde step,
putting back as it were the clock of social reform which has enabled Hindu women to acquire an equal status with males in matters of property.
Even assuming that two interpretations of Expln. 1 are reasonably possible, we must prefer that interpretation which will further the intention of the
legislature and remedy the injustice from which Hindu women have suffered over the years.
We are happy to find that the view which we have taken above has also been taken by the Bombay High Court in Rangubai Vs. Laxman Lalji
Patil, , in which Patel J., very fairly, pronounced his own earlier judgment to the contrary in Rangubai Vs. Laxman Lalji Patil, , as incorrect.
Recently, a Full Bench of that High Court in Sushilabai Ramchandra Kulkarni Vs. Narayanrao Gopalrao Deshpande and Others, , the Gujarat
High Court in Vidyaben Vs. Jagdishchandra Nandshankar Bhatt and Others, and the High Court of Orissa in Ganga Devi Vs. Krushna Prasad
Sharma, , have taken the same view. The Full Bench of the Bombay High Court in Sushilabai''s case (supra), has considered exhaustively the
various decisions bearing on the point and we endorse the analysis contained in the judgment of Kantawala, C.J., who has spoken for the Bench.
14. In State of Maharashtra vs. Narayan Rao Sham Rao Deshmukh (supra), the Supreme Court considered the definition of ""family"" in the
Maharashtra Agricultural Lands (Ceiling on Holdings) Act (27 of 1961) and the effect of the same upon a joint Hindu family under the Hindu
Succession Act and answered the contention that on the death of the father, the family became disrupted or divided and the son, the mother and
the grandmother, ceased to be members of a joint Hindu family. The Supreme Court observed :
In order to examine the validity of this submission, it is necessary to refer to some of the relevant features of an HUF and to consider the effect of
the provisions of s. 6 of the Act on ''such family''.
As observed in Maume''s Hindu Law and Usage (1953 Edn.) the joint and undivided family is the normal condition of a Hindu society. An HUF is
ordinarily joint not only in estate but in food and worship, but it is not necessary that a joint family should own joint family property. There can be a
joint family without a joint family property. At paragraph 264 of the above treatise, it is observed thus :
''264. It is evident that there can be no limit to the number of persons of whom a Hindu joint family consists, or to the remoteness of their descent
from the common ancestor, and consequently to the distance of their relationship from each other. But the Hindu coparcenary is a much narrower
body..... For, coparcenary in the Mitakshara law is not identical with coparcenary as understood in English law : when a member of a joint family
dies, ""his right accrues to the other members by survivorship, but if a coparcener dies, his or her right does not accrue to the other coparceners,
but goes to his or her own heirs"". When we speak of a Hindu joint family as constituting a coparcenary, we refer not to the entire number of
persons who can trace descent from a common ancestor, and amongst whom no partition has ever taken place; we include only those persons
who, by virtue of relationship, have the right to enjoy and hold the joint property, to restrain the acts of each other in respect of it, to burden it with
their debts, and at their pleasure to enforce its partition. Outside this body, there is a fringe of persons possessing only inferior rights such as that of
maintenance, which, however, tend to diminish as the result of reforms in Hindu law by legislation.''
A Hindu coparcenary is, however, a narrower body than the joint family. Only males who acquire by birth an interest in the joint or coparcenary
property can be members of the coparcenary or coparceners. A male member of a joint family and his sons, grandsons and great grandsons
constitute a coparcenary. A coparcener acquires a right in the coparcenary property by birth but his right can be definitely ascertained only when a
partition takes place. When the family is joint, the extent of the share of a coparcener cannot be definitely predicated since it is always capable of
fluctuating. It increases by the death of a coparcener and decreases on the birth of a coparcener. A joint family, however, may consist of female
members. It may consist of a male member, his wife, his mother and his unmarried daughters. The property of a joint family does not cease to
belong to the family merely because there is only a single male member in the family. [See Gowli Buddanna Vs. Commissioner of Income Tax,
Mysore, Bangalore, , and Smt. Sitabai and Another Vs. Ramchandra, ]. A joint family may consist of a single male member and his wife and
daughters. It is not necessary that there should be two male members to constitute a joint family. [See N.V. Narendranath Vs. Commissioner of
Wealth-tax, Andhra Pradesh, ]. While under the Mitakshara Hindu law there is community of ownership and unity of possession of joint family
property with all the members of the coparcenary, in a coparcenary governed by the Dayabhaga law, there is no unity of ownership of
coparcenary property with the members thereof. Every coparcener takes a defined share in the property and he is the owner of that share. But
there is, however, unity of possession. The share does not fluctuate by birth and deaths. Thus it is seen that the recognition of the right to a definite
share does not militate against the owners of the property being treated as belonging to a family in the Dayabhaga law.
We have earlier seen that females can be the members of a Hindu joint family. The question now is whether a female who inherits a share in a joint
family property by reason of the death of a male member of the family ceases to be a member of the family. It was very forcefully pressed upon us
by the learned counsel for the respondents relying upon the decision of this Court in Gurupad Khandappa Magdum Vs. Hirabai Khandappa
Magdum and Others, , that there was a disruption of the family in question on the death of Sham Rao as for the purpose of determining the interest
inherited by Gangabai alias Taibai and Sulochanabai it was necessary to assume that a notional partition had taken place immediately before the
death of Sham Rao and carried to its logical end as observed in the above decision, Gangabai alias Taibai and Sulochanabai should be deemed to
have become separated from the family. The facts of the abovesaid case were these............
We have carefully considered the above decision and we feel that this case has to be treated as an authority for the position that when a female
member who inherits an interest in the joint family property under s. 6 of the Act files a suit for partition expressing her willingness to go out of the
family she would be entitled to get both the interest she has inherited and the share which would have been notionally allotted to her, as stated in
Expln. 1 to s. 6 of the Act. But it cannot be an authority for the proposition that she ceases to be a member of the family on the death of a male
member of the family whose interest in the family property devolves on her without her volition to separate herself from the family. A legal fiction
should no doubt ordinarily be carried to its logical end to carry out the purposes for which it is enacted but it cannot be carried beyond that. It is no
doubt true that the right of a female heir to the interest inherited by her in the family property gets fixed on the death of a male member under s. 6 of
the Act but she cannot be treated as having ceased to be a member of the family without her volition as otherwise it will lead to strange results
which could not have been in the contemplation of Parliament when it enacted that provision and which might also not be in the interest of such
female heirs. To illustrate, if what is being asserted is accepted as correct it may result in the wife automatically being separated from her husband
when one of her sons dies leaving her behind as his heir. Such a result does not follow from the language of the statute. In such an event she should
have the option to separate herself or to continue in the family as long as she wishes as its member though she has acquired an indefeasible interest
in a specific share of the family property which would remain undiminished whatever may be the subsequent changes in the composition of the
membership of the family. As already observed the ownership of a definite share in the family property by a person need not be treated as a factor
which would militate against his being a member of a family. We have already noticed that in the case of a Dayabhaga family, which recognises
unity of possession but not community of interest in the family properties amongst its members, the members thereof do constitute a family. That
might also be the case of families of persons who are not Hindus. In the instant case, the theory that there was a family settlement is not pressed
before us. There was no action taken by either of the two females concerned in the case to become divided from the remaining members of the
family. It should, therefore, be held that notwithstanding the death of Sham Rao, the remaining members of the family continued to hold the family
properties together though the individual interest of the female members thereof in the family properties had become fixed.
15. The Supreme Court has thus clarified that Khandappa''s case (supra) is not an authority for the proposition that Hirabai had ceased to be a
member of the family on the death of the male member of the family whose interest in the family property devolved on her without her volition to
separate herself from the family. The law in this behalf is thus that a legal fiction should no doubt ordinarily be carried to its logical end to carry out
the purposes for which it is enacted but it cannot be carried beyond that. It is no doubt true that the right of a female heir to the interest inherited by
her in the family property gets fixed on the death of a male member under s. 6 of the Hindu Succession Act, but she cannot be treated as having
ceased to be a member of the family without her volition as otherwise it will lead to strange results which could not have been in the contemplation
of Parliament when it enacted that provision and which might also be not in the interest of such female heirs. The ownership of a definite share in
the family property by a person need not be treated as a factor which would militate against his being a member of a family. Even in the case of a
Dayabhaga family, unity of possession is recognised but not community of interest in the family properties amongst its members. The members
thereof do constitute a family and possessed lands together but they do not have joint interest and are tenants in common. The relevant observation
in this judgment of the Supreme Court, however, is ""that might also be the case of families of persons who are not Hindus"". The Court accepted
Hira Bai''s case that notwithstanding the death of Sham Rao, the remaining members of the family continued to hold the family properties together
though the individual interest of the female members thereof in the family properties had become fixed.
16. We would have concluded on the said basis that in a case where only female heirs inherit and they are more than one, whether the property
inherited by them was ancestral in the hands of the person from whom they inherited or was separate and/or self acquired, they inherit definite
shares but until the property is divided they continue to have unity of possession. In such a situation, until the property is divided and they come to
have separate possession, one of them may hold the property in a representative capacity. Such a representative capacity is referable to s. 171 of
the Act and to a HUF and if it is not covered by s. 171 of the Act for the reason of the nature of the property inherited together by more than one
person in the same class of heirs to s. 168 of the Act. Before, however, we do so, we may refer to the judgment in TC Nos. 338 to 340 of 1982,
dt. 24th Nov., 1994, by a Division Bench of this Court [ Commissioner of Income Tax Vs. Smt. P. Dhanalakshmi and others, ] in which the Court
has observed :
It remains to be seen that the Expln. under s. 168 of the Act states that it would be applicable only in the case of a specified legatee. Legatees are
entitled to succeed to the estate in accordance with the terms of the will. In the present case, the deceased had not executed any will in favour of
the legatees. In the absence of the fact that the succession is a testamentary succession, s. 168 of the Act cannot be made applicable. The Expln.
to s. 168 states that in this section ''executor'' includes an administrator or other person administering the estate of a deceased person. This does
not mean that the administrator includes the de facto administrator. While considering a question of similar nature in Mahamaya Dassi Vs.
Commissioner of Income Tax, , the Calcutta High Court held that s. 247 only contemplates the preservation of the property until the question as to
the existence or the validity of the will is determined. An administrator pendente lite gets any right or authority not on the death of the testator but
from the date of appointment and by virtue of appointment by the appropriate Court. In view of the nature and duties required to be performed by
the administrator pendente lite appointed under s. 247 of the Succession Act and in view of the circumstances under which administration pendente
lite can be made, an administrator pendente lite is not an administrator as contemplated by s. 168 of the IT Act and s. 168 will not apply to him.
A similar question came up for consideration before this Court in A. and F. Harvey Ltd. as Agents to Executors of the Estate of Late Andrew
Harvey Vs. Commissioner of Wealth-tax, , wherein, while considering the provisions of s. 19A of the WT Act, 1957, which is corresponding to s.
168 of the IT Act, this Court held ''that if he had died intestate, the estate would have gone to his heirs, and, therefore, it is in the hands of the heirs
that the assessment will have to be made and not in the hands of anybody else. Consequently, s. 19A is confined only to a case where an assessee
dies after executing a will and appointing an executor or executors. In such a case, s. 19A provides for the assessment of the estate of the
deceased in the hands of the executor or executors till the administration is completed. However, the Bombay High Court in Commissioner of
Income Tax, Bombay City-II Vs. Usha D. Shah, held that the term ''executor'' is not to be understood in the restricted sense as the Explanation to
the section gives an extended meaning to the word ''executor'', so as to include an administrator or other person, administering the estate of the
deceased person, that is, one who is in de facto management of the property of the deceased person. This judgment of the Bombay High Court
was later on explained by the same High Court in a subsequent decision in Commissioner of Wealth-tax, Bombay City-II Vs. Keshub Mahindra,
in the following manner : ''We have already pointed out that s. 19A is a special provision, and unless a person falls within the provisions of s. 19A,
it will not be possible to give him the benefit of s. 19A, the operation of which, we have found, is attracted only in a case where the deceased has
left a will''. No argument can, therefore, be advanced in favour of the contention raised by the assessee on the basis of a decision in Mrs. Usha D.
Shah''s case (supra)
And conclude :
In the present case, the deceased has not left a will bequeathing the property to any of the legatees. In such circumstances, since the succession in
the present case happens to be an intestate succession, s. 168 of the Act cannot be made applicable to make an assessment in a representative
capacity. In that view of the matter, we answer the questions referred to us in the negative and in favour of the Department.
17. A Bench decision of this Court in Dhanasekaran Vs. Manoranjithammal and others, is also cited at the Bar. However, that case, in our view,
needs no discussion, for, what it has decided relates to title or the interest of a minor in the property, which he shared with his mother.
18. It is indeed, in our view, necessary to correct the law and tell all concerned that the observations in the judgment in Tax Cases Nos. 338 to
340 of 1982, dt. 24th Nov., 1994 - P. Dhanalakshmi''s case (supra) are opposed to the public policy of recognising the unity of possession of
more than one person, who together inherit the property and thus have unity of possession but since they inherit specific shares, they do not have
the unity of title and representative capacity of one or the other of them or of more than one of them until the property is divided and distributed in
accordance with their respective shares.
19. The observations in Mahamaya Dassi Vs. Commissioner of Income Tax, have been taken note of by us and we have found nothing in the said
judgment which could justify the approach that s. 168 of the Act is applicable only in the case of a specific legatee. We have also noticed that the
difference in the law as found in s. 19A of the WT Act and s. 168 of the (IT) Act is one which is in tune with the consensus of the Courts that the
term ""executor"" in s. 168 of the Act is not to be understood in any restricted sense as the Explanation to the section has given an extended meaning
to the word ""executor"" so as to include an administrator or any other person administering the estate of the deceased person, that is, including the
one who is in de facto management of the property of the deceased person. The Court was not properly informed when it took the view that the
word ""executor"" should receive a limited meaning for the purpose of s. 168 of the Act. The above view has been expressed in the teeth of the view
expressed by the Supreme Court that, in the case of a property inherited together by more than one person belonging to the same class of
heirs/legal representatives, so long as the unity of possession exists, whether the property inherited was ancestral property of the deceased or was
a separate property of the deceased including self-acquired property, any one or more than one of them can have the representative capacity until
partition, by metes and bounds, they cannot be separately subjected to tax to the extent of their definite share.
This will apply to Hindus governed by Mitakshara school of law or Dayabhaga school of law as well to those as belonging to other religious
communities whose inheritance gives to them their separately identified interest but gives no separate possession, i.e., they do not have unity of title
but they do have unity of possession.
We hold for the said reason that the Tribunal has committed no mistake. The question is answered accordingly. No costs.
