27 February 2008
Under section 2(31) of the Income-Tax Act, a Hindu undivided family (HUF) is one of the assessable entities. A Hindu joint family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters. A Hindu coparcenary is a much narrower body than a joint family. It includes only those persons who acquire by birth interest in the joint or coparcenary property, these being the sons, grandsons and great-grandsons of the holder of the joint property for the time being. Therefore, there may be a joint Hindu family consisting of a single male member and widows of deceased coparceners. The belief that there must be atleast two male members to form a Hindu undivided family as a taxable entity also has no force. The expression 'Hindu undivided family' in the Income-tax Act is used in the sense in which a Hindu joint family is understood under the personal law of Hindus. Under the Hindu system of law, a joint family may consist of a single male member and widows of deceased male members, and apparently the Income-tax Act does not indicate that a Hindu undivided family as an assessable entity must consist of atleast two male members. The Bombay High Court had an occasion to consider this point in Dr Prakash B Sultane v CIT ([2005] 148 Taxman 353). The facts in this case were that the assessee was a doctor by profession. His income from profession was assessable in his hands as an individual. The assessee was a member of a bigger Hindu undivided family which was partitioned on January 1, 1972. At the time of partition and right upto January 22, 1980 the assessee was a bachelor. During all these years, the income from assets on partition was assessed in his hands as his individual income. When the assessee got married on January 22, 1980, he contended that immediately after his marriage, the income from the assets received by him on partition was required to be assessed as Hindu undivided family income, the Hindu undivided family consisting of himself and his wife. The Assessing Officer observed that the decisions referred to by the assessee were considered in the judgment of the Madhya Pradesh High Court in CIT v. Vishnukumar Bhaiya (142 I.T.R. 357). Relying upon this judgment, he rejected the application of the assessee and continued to assess his income from the Hindu undivided family property in his individual capacity. In the above case also, the assessee had obtained his share on partition before his marriage and, on his marriage, had claimed the status of Hindu undivided family. His claim was rejected on the ground that "until a son is born the status of the assessee would continue to be that of an individual." The Bombay High Court in Dr Prakash B. Sultane's case held that the property does not lose its character merely because at one point of time there was only one male member or one coparcener. The dictum that "once Hindu undivided family always Hindu undivided family" has been accepted all along.
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