S. PARVATHA RAO, J.:
1. The petitioner in these four writ petitions is a Hindu undivided family (HUF) and seeks a writ in the nature of mandamus, etc., directing the respondents, i.e., the Commissioner of Income-tax, Karnataka (Central), Bangalore, and the ITO, Central Circle III, Hyderabad, to accept the partial partitions effected by its karta, Satish Chandra Modi, for the four asst. yrs. 1979-80 (Writ Petition No. 18153 of 1987), 1981-82 (Writ Petition No. 8523 of 1988), 1984-85 (Writ Petition No. 8903 of 1988) and 1985-86 (Writ Petition No. 8913 of 1988), etc.
2. The members of the petitioner-Hindu undivided family are Satish Chandra Modi, his wife, Tarulata, and their two minor sons, Soham and Sourabh. The petitioner has been an assessee under the IT Act, 1961 ("the Act", for short), from the asst. yr. 1971-72. It is claimed on behalf of the petitioner that a partial partition was effected on 19th Jan., 1976, in respect of a sum of Rs. 30,000 belonging to the petitioner Hindu undivided family where under a sum of Rs. 10,000 was given to the minor, Soham, and the balance of Rs. 20,000 had been jointly allotted to the remaining members of the petitioner, i.e., Satish Chandra Modi, Tarulata and Sourabh. It is further claimed that a second partial partition was effected on 16th Oct., 1978, partitioning another sum of Rs. 30,000 belonging to the petitioner-Hindu undivided family and allotting a sum of Rs. 10,000 to the minor, Sourabh, and the remaining Rs. 20,000 to the other three members of the Hindu undivided family, i.e., Satish Chandra Modi, Tarulata and Soham.
3. In the affidavit in support of the writ petitions given by Satish Chandra Modi, it is stated that in respect of the partial partition of 19th Jan., 1976, though a claim was made on behalf of the petitioner before the ITO during the relevant assessment year, he did not record any finding under s. 171 of the Act. It is further stated that after the partial partition of 16th Oct., 1978, the petitioner again made a claim before the ITO that the amount of Rs. 20,000 allotted to Satish Chandra Modi, Tarulata and the minor, Soham, from out of the funds of the petitioner-Hindu undivided family should be assessed in the hands of "the smaller Hindu undivided family" and that this claim of the petitioner was specifically rejected by an order of the concerned Income-tax Officer for the asst. yr. 1979-80 on the ground that there could not be a valid partition between the minor, Sourabh, on the one hand, and the remaining three members whereby a smaller Hindu undivided family with those three members would come into existence. Against the said order of the ITO, the petitioner filed an appeal to the Appellate Assistant Commissioner and the same was dismissed by order dt. 4th Oct., 1982. Thereafter, the petitioner filed a revision petition before the first respondent herein under s. 264 of the Act.
4. In the affidavit in support of Writ Petition No. 8523 of 1988, it is stated that the petitioner filed a return of income for the year 1981-82 on the same basis on which the return had been filed for the asst. yr. 1979-80 and that the ITO did not accept the said partial partitions and made an assessment including therein the incomes of the minor Hindu undivided family, Soham (consisting of Soham and his parents) and the minor Hindu undivided family Sourabh (consisting of Sourabh and his parents) and of both the minors. It is also stated in paragraph 7 of that affidavit that against the order of the ITO refusing to accept the claim of the petitioner for partial partition, the petitioner filed an appeal before the Appellate Assistant Commissioner. Thereafter, the petitioner preferred an application before the first respondent under s. 264 of the Act against the order of the ITO under s. 171(2) of the Act for the asst. yr. 1981-82. In the affidavit in support of Writ Petition No. 8903 of 1988, the same facts were repeated for the asst. yr. 1984-85. In the affidavit in support of Writ Petition No. 8913 of 1988 also the same facts were repeated in respect of the asst. yr. 1985-86 with a further clarification that the appeal to the Appellate Assistant Commissioner against the order of the ITO refusing to accept the claim of the petitioner for partial partitions was dismissed.
5. By a common order dt. 30th March, 1987, the first respondent rejected all the four revision petitions for the asst. yrs. 1979-80, 1981-82, 1984-85 and 1985-86 against the orders of the second respondent under s. 171(2) of the Act disallowing the claim of partial partition. It was observed by the first respondent in the said order that the returns were being filed for the asst. yr. 1979-80 onwards showing three separate Hindu undivided families the main Hindu undivided family and the two smaller Hindu undivided families, minor Hindu undivided family Soham and minor Hindu undivided family Sourabh, and that the second respondent held that there could not be a valid partition between each of the minors, on the one hand, and the remaining three members of the main Hindu undivided family said to be constituting the smaller Hindu undivided families, on the other hand, and that in the revision petitions the petitioner claimed the consequential relief that the incomes of the smaller Hindu undivided families should not be clubbed in the hands of the major Hindu undivided family. The first respondent held that the minor Hindu undivided families could not be created by making partial partitions as contended by the petitioner. The first respondent relied on the decisions of the Supreme Court in Kalloomal Tapeswari Prasad (HUF) vs. CIT (1982) 26 CTR (SC) 415 : (1982) 133 ITR 690 (SC) and State of Maharashtra vs. Narayan Rao Sham Rao Deshmukh (1985) 46 CTR (SC) 349 : (1987) 163 ITR 31 (SC) and observed that the decisions of the Gujarat High Court in CIT vs. Shantikumar Jagabhai (1976) 105 ITR 795 (Guj) and Vimalbhai Nagindas Shah vs. CIT (1983) 140 ITR 29 (Guj) impliedly approving multiple HUFs as of doubtful authority in view of the decision of the Bombay High Court in Rangubai vs. Laxman AIR 1966 Bom 169 to the contra which was approved by the Supreme Court in Gurupad Khandappa Magdum vs. Hirabai Khandappa Magdum (1981) 129 ITR 440 (SC). The first respondent dismissed the revision petitions concluding as follows :
"As stated, it is not the case of the assessee that the minor sons, Shri Soham and Shri Sourabh, took Rs. 10,000 each out of the Hindu undivided family funds and there was a partial partition in respect of these amounts between the main Hindu undivided family on the one hand and the minor sons, Shri Soham and Shri Sourabh, separately, on the other hand. If this were the assessee's position, then his case of multiple Hindu undivided families would not have arisen or survived. In revision, the case made out by the assessee of multiple Hindu undivided families and which is rejected by the ITO cannot be modified. As the claim of multiple Hindu undivided families made by the assessee is not acceptable, the same is hereby rejected. The ITO was justified in rejecting this claim and in further clubbing the income of the allegedly smaller Hindu undivided families in the income of the main Hindu undivided family. . . . "
6. The petitioner questions this common order of the first respondent in these four writ petitions.
7. Before proceeding further, it is necessary to have a clear bearing of the facts of the case. Learned counsel for the petitioner does not dispute that the petitioner-Hindu undivided family is governed by the Mitakshara. The exact nature of the partitions claimed to have been effected is borne out by the memoranda recording the partial partitions, copies of which have been placed before us as material papers. The memorandum relating to the partial partition said to have been effected on 16th Oct., 1978, is as follows :
"Memorandum
Recording partial partition
Parties :
1. Satish Modi,
2. Mrs. Tarulata, w/o. Satish Modi,
3. Master Soham, son of Satish Modi,
4. Master Sourabh, son of Satish Modi.
Whereas
(a) The parties hereto constitute a joint and undivided Hindu family designated 'Satish Chandra Modi, Hindu undivided family' ;
(b) the aforesaid joint and undivided Hindu family (here-in after referred to as 'the major HUF') owns assets and is duly assessed to income-tax ;
(c) on 16th Oct., 1978, it was decided to effect a partial partition of only one asset of the major Hindu undivided family, viz., of a sum of Rs. 30,000 (rupees
thirty thousand only) and such partial partition was duly carried out and completed on 16th Oct., 1978 ;
(d) this memorandum records the partial partition effected as aforesaid.
Witnesseth as follows :
1. A partial partition was effected between the parties hereto on 16th day of Oct., 1978, viz., of a sum of Rs. 30,000 (rupees thirty thousand only) which belonged to the major Hindu undivided family.
2. On such partial partition and as a result thereof, the undermentioned persons got and received the undermentioned amounts :
(a) Rupees 20,000 (rupees twenty thousand only) was received by the minor Hindu undivided family with Soham.
(b) Rupees 10,000 (rupees ten thousand only) was received by Master Sourabh S. Modi.
3. In all other respects the aforesaid Hindu undivided family and the assets and properties thereof remain and shall remain joint, for the benefit and on behalf of all the members thereof.
Dated at Secunderabad (A. P.) this 16th day of Oct., 1978.
(Sd.) (Satish Modi)
(Sd.) (Mrs. Tarulata Satish Modi)
(Sd.) (Master Soham and Master Sourabh by the hand of their father, natural guardian and karta, the said Satish Modi).
8. The memorandum relating to the partial partition said to have been effected on 19th Jan., 1976, is also in similar terms.
9. In respect of the income-tax assessment for the year 1979-80, the second respondent gave notice to the petitioner dt. 6th March, 1982, calling for objections as to why its claim for partial partition (of October 16, 1978) under s. 171 should not be refused. One of the reasons mentioned by him, which is relevant for the purpose of the present case, was as follows :
"Since minor Hindu undivided family is not one of the members of the Hindu undivided family which is subjected to partition, I propose to negative your claim of partial partition. " To this a reply dt. 17th March, 1982, was sent by Satish Chandra Modi, the karta of the petitioner, claiming that the said partial partition was quite in order and that a finding should be recorded to that effect, stating as follows :
". . . . I have to submit that out of the four members of the family, namely, Sri Satish Chandra Modi, Smt. Tarulata Modi, Master Soham and Master Sourabh, Master Sourabh Modi has been given Rs. 10,000 and he has gone out of the Hindu undivided family so far as the said sum of Rs. 30,000 is concerned. The balance of Rs. 20,000 remained jointly with the three members. The main Hindu undivided family consists of Shri Satish Chandra Modi, Smt. Tarulata Modi, Master Soham Modi and Master Sourabh Modi. Master Sourabh Modi having gone out, is no longer a member of the Hindu undivided family so far as Rs. 20,000 is concerned. The ownership of Rs. 20,000 rests with the family consisting of Shri Satish Chandra Modi, Smt. Tarulata Modi and Master Soham Modi and this is definitely a separate entity than the original Hindu undivided family of four members and is a smaller Hindu undivided family."
10. Thus, what is claimed on behalf of the petitioner-Hindu undivided family is that without disrupting it there can be a partial partition under which a minor member entitled to a share can go out of it taking his share in one of its properties thereby creating a smaller Hindu undivided family with its remaining members in respect of the remaining part of that property excluding the share taken away by the minor members and that a finding of such a partial partition could be recorded under s. 171 of the Act.
11. The second respondent, by his order in G. I. R. No. 201-S under s. 171(2) of the Act dt. 29th March, 1982, refused to record a finding of partial partition holding, inter alia, as follows :
" The subject-matter of the partition is a sum of Rs. 30,000 representing part of the capital of the bigger Hindu undivided family. This capital which is the subject-matter of the partition was divided between Master Sourabh Modi and smaller Hindu undivided family consisting of Sri Satish Chandra Modi, his wife, Smt. Tarulata Modi, and the minor son, Sri Soham Modi.
12. Since the smaller Hindu undivided family consisting of Sri Satish Chandra Modi, his wife, Smt. Tarulata Modi, and the minor son, Sri Soham Modi, is not one of the members, who is entitled to claim partition, the question of according partition under s. 171(2) of the Income-tax Act does not arise. In fact, an application under s. 171(2) of the Income-tax Act was put in by two persons one is Sri Sourabh Modi, and (2) smaller Hindu undivided family consisting of Sri Satish Chandra Modi, his wife, Smt. Tarulata Modi, with their minor son, Sri Soham Modi. In fact, the entries were passed in the books evidencing partition of the said capital between these two persons, viz., Sri Sourabh S. Modi and the minor Hindu undivided family, the latter of which is not one of the members at all to claim the partition. "
13. In his common order dt. 30th March, 1987, in Revisions Nos. RP. 72 and 73/264 of 1985-86/CIT(C) and No. RP. 26 and 27/264 of 1986-87/CIT(C), the first respondent held, as already pointed out, that the claim of multiple Hindu undivided families made by the assessee was not acceptable and that the second respondent was justified in rejecting the claim of the petitioner.
14. Learned counsel for the petitioner submits that there can be a partial partition in respect of any of the assets of the Hindu undivided family and that inasmuch as, in the present case, the karta of the petitioner Hindu undivided family effected the partial partition on 19th Jan., 1976, and 16th Oct., 1978, dividing on each occasion Rs. 30,000 which were admittedly the assets of the petitioner-Hindu undivided family at the relevant time, the respondents were bound to record a finding in respect of the said partitions and exclude the said sums and the incomes therefrom in assessing the petitioner-Hindu undivided family. He submits that the said partial partitions effected were genuine, true and permissible under the Hindu law and that they fall within the definition of "partial partition" in the Explanation to s. 171 of the Act and that, therefore, the respondents were bound to record a finding to that effect under s. 171 of the Act. He contends that the decisions of the Supreme Court in Kalloomal's case (supra) and Apoorva Shantilal Shah vs. CIT (1983) 33 CTR (SC) 153 : (1983) 141 ITR 558 (SC) support the petitioner. On the other hand, the learned standing counsel for the Revenue submits that the orders of the respondents are not vitiated by any error apparent on the face of the record and, therefore, this Court should not interfere with the findings of the respondents. He relies on Hari Vishnu Kamath vs. Ahmad Ishaque, AIR 1955 SC 233.
15. At the outset, we have to observe that this Court cannot, in exercise of its jurisdiction under art. 226 of the Constitution, direct the respondents straightaway to accept the claims of partial partitions made on behalf of the petitioner-Hindu undivided family, bypassing the provisions of s. 171 of the Act for the time being in force, especially when sub-s. (1) of that section provides that a Hindu family hitherto assessed as undivided "shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family". (emphasis supplied). Though in CIT vs. Dara Seshavataram (1980) 16 CTR (AP) 371 : (1981) 129 ITR 339 (AP) a Division Bench of this Court held that the presumption under sub-s. (1) of s. 171 was clearly made applicable only to a case of total partition and that in the case of a partial partition the joint family as such continued and, therefore, there was no question of invoking the fiction, the Supreme Court rejected this view in Kalloomal's case (supra). In that case, it was contended on behalf of the assessee before the Supreme Court that the fiction contained in s. 171(1) of the Act did not at all apply to an undivided family which continued to be in fact an undivided family even after a partial partition as regards some of its properties had taken place, on the ground that a deeming provision could operate only where the real state of affairs was different from what the law deemed as existing and it could not where the real state of affairs was the same as the one which law, by a fiction, treated as existing, and that since the undivided family in fact continued even after a partial partition as regards property, there was no need to enact a rule declaring that it should be deemed to continue as an undivided family. The Supreme Court repelled this contention holding as follows :
" After a partial partition as regards property, the property divided is held by the members of the undivided family as divided members with all the incidents flowing therefrom and the property not so divided as members of an undivided family. The fiction enacted in s. 171(1) of the Act can, therefore, operate in such a case also because the family which has become divided as regards the property which is the subject matter of partial partition is deemed to continue as the owner of that property and the recipient of the income derived from it except where and in so far as a finding of partition has been given under s. 171. In such a case, it is obvious that the real state of affairs is in fact different from what is created by the fiction and it cannot be said that there is no occasion for the fiction to operate. That is the true meaning of s. 171(1) of the Act. In view of the substantial changes that are brought about in s. 171, we find it impossible to accept the contention that the fiction in s. 171(1) of the Act does not operate in the case of partial partitions as regards property where the composition of the family has remained unchanged."
16. In view of this authoritative pronouncement of the Supreme Court, we are of the view that the decision of this Court in Dara Seshavataram's case (supra) is no longer good law. Sub-ss. (2) and (3) of s. 171 state how such a finding of total or partial partition is to be given. Sub-s. (2) requires that the ITO shall make an enquiry when at the time of making an assessment under s. 143 or s. 144 of the Act a claim is made by or on behalf of any member of the HUF hitherto being assessed as undivided that a partition, whether total or partial, has taken place among its members. Sub-s. (3) provides that on completion of that enquiry, the ITO shall record a finding as to whether there has been a total or partial partition of that HUF and if so the date on which it has taken place. From this it follows that a claim should have been made by or on behalf of the petitioner before the concerned ITO at the time of making an assessment in respect of the relevant assessment year. It has been held by the Supreme Court in Kalloomal's case (supra) that :
" Where there is no claim made that a partition total or partial had taken place or where it is made and disallowed, an Hindu undivided family which is hitherto being assessed as such will have to be assessed as such notwithstanding the fact that a partition had in fact taken place as per Hindu law. "
17. In the present case, it is not stated on behalf of the petitioner that for its assessment for the asst. yr. 1979-80 any claim was made in respect of the partial partition said to have been effected on January 19, 1976 it is only stated that a claim was made in respect of the second partial partition said to have been effected on 16th Oct., 1978. The notice of the ITO dt. 6th March, 1982, with reference to the income-tax assessment of the petitioner for the asst. yr. 1979-80 did not make any reference to the partial partition said to have been effected on 19th Jan., 1976, nor did the reply on behalf of the petitioner dt. 17th March, 1982, make any reference to the said partial partition. The order of the ITO in G. I. R. No. 201-S dt. 29th March, 1982, also does not make any reference to the earlier partial partition. What is stated on behalf of the petitioner is only that an application dt. 30th June, 1976, was made to the ITO under s. 171(2) of the Act for an enquiry under that provision in respect of the partial partition of 19th Jan., 1976, but that the ITO did not take any action on the same. But the petitioner had not questioned the inaction of the Income-tax Officer in that regard. There is nothing before us to show that the petitioner had questioned the assessment made for the asst. yr. 1976-77 in respect of the petitioner ignoring the said partial partition. In view of these facts, it is not possible for us to entertain the claim of the petitioner in respect of the partial partition of 19th Jan., 1976, and give any directions to the respondents in respect of the said partial partition. However, our findings as regards the partial partition of 16th Oct., 1978, equally apply to the partial partition of 19th Jan., 1976, because the two are similar and stand on the same footing. From a perusal of the order of the first respondent dt. 30th March, 1987, it appears that he entertained the revision applications made on behalf of the petitioner for the four assessment years in respect of both the partial partitions treating them as similar.
18. The question, then, is, whether the partial partition of 16th Oct., 1978, set up by the petitioner is valid under the Hindu law and satisfies the requirements of partition and partial partition under the Explanation to s. 171 and whether the respondents are right in not accepting the same. In Kalloomal's case (supra), the Supreme Court has held that the ITO can record a finding of partition or partial partition under s. 171 only if the partition in question satisfies the definition of the expression "partition" found in the Explanation to s. 171. The Supreme Court further held that a transaction can be recognised as a partition under s. 171 only if, where the property admits of a physical division, a physical division of the property has taken place ; and that where the property does not admit of a physical division then such division, as the property admits of, should take place to satisfy the test of a partition under s. 171 ; and that if a transaction does not satisfy the above additional conditions it cannot be treated as a partition under the Act even though under the Hindu law there has been a partition total or partial. This means that the first basic requirement that has to be satisfied before the additional conditions are to be satisfied, is that the transaction should be a valid partition under the Hindu law applicable to the Hindu undivided family.
19. For answering the question whether the partial partition of 16th Oct., 1978, set up by the petitioner is valid under the Mitakshara school of Hindu law, it is necessary to bear in view the meaning and incidents of "Hindu undivided family". Though under the Act "person" includes a Hindu undivided family (HUF) and it is made a separate assessable entity, that expression is not defined. In C. Krishna Prasad vs. CIT 1975 CTR (SC) 7 : (1974) 97 ITR 493 (SC) the Supreme Court observes that "the expression `HUF' in the IT Act is used in the sense in which a Hindu joint family is understood under the various schools of Hindu law". While dealing with the IT Act of 1922, the Supreme Court has observed in Surjit Lal vs. CIT 1976 CTR (SC) 140 : (1975) 101 ITR 776 (SC) that "joint family" and "undivided family" are synonymous terms and that the expression "Hindu undivided family" has a well-known connotation under the Hindu law and must be construed in the sense in which it is understood under the Hindu law. The Supreme Court also pointed out the unique features of a Hindu undivided family and the distinction between the Hindu undivided family and the coparcenary in the following manner :
" . . . the joint and undivided family is the normal condition of Hindu society. The presumption, therefore, is that the members of a Hindu family are living in a state of union, unless the contrary is established. The strength of the presumption may vary from case to case depending upon the degree of relationship of the members and the farther one goes from the founder of the family, the weaker may be the presumption . . . Thus, a man who separates from his father or brothers may, nevertheless, continue to be joint with the members of his own branch. He becomes the head of a new joint family, if he has a family, and if he obtains property on partition with his father and brothers, that property becomes the ancestral property of his branch qua him and his male issue.
20. It is true that the appellant (before the Supreme Court) cannot constitute a coparcenary with his wife and unmarried daughter but under the Income-tax Act, a Hindu undivided family, not a coparcenary, is a taxable unit. A Hindu coparcenary is a much narrower body than the joint family. It includes only those persons who acquire by birth an interest in the joint or coparcenary property and these are the sons, grandsons and great grandsons of the holder of the joint property for the time being, that is to say, the three generations next to the holder in unbroken male descent. Since, under the Mitakshara law, the right to joint family property by birth is vested in the male issue only, females who come in only as heirs to obstructed heritage (sapratibandhadaya), cannot be coparceners... Outside the limits of coparcenary, there is a 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 nor 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. . . .
21. The joint Hindu family, with all its incidents, is thus a creature of law and cannot be created by act of parties, except to the extent to which a stranger may be affiliated to the family by adoption.
22. In State of Maharashtra vs. Narayan Rao (supra) the Supreme Court observed :
" 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 predicted 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 . . . . 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. . . . "
23. In Sudarsanam Maistri vs. Narasimhulu Maistri (1901) ILR 25 Mad 149, Bhashyam Ayyangar J., said this as regards the nature of the property owned by a joint Hindu family :
"As regards the property of such family, the 'unobstructed heritage' devolving on such family, with its accretions, is owned by the family as a corporate body, and one or more branches of that family, each forming a corporate body within a large corporate body, may possess separate 'unobstructed heritage' which, with its accretions, may be exclusively owned by such branch as a corporate body. "
24. The learned judge observed that two or more members of different branches, or of one and the same branch, of a family cannot acquire a property with the incidents of a joint family in the following manner :
" But so long as a family remains an undivided unit, two or more members thereof whether they be members of different branches or of one and the same branch of the family, can have no legal existence as a separate independent unit ; but if they comprise all the members of a branch, or of a sub-branch, they can form a distinct and separate corporate unit within the larger corporate unit and hold property as such."
25. Referring to this decision with approval, Subba Rao J., speaking for the Supreme Court in Bhagwan Dayal vs. Reoti Devi (Mst.), AIR 1962 SC 287, held as follows :
" Hindu law recognises only the entire joint family or one or more branches of that family as a corporate unit or units and that the property acquired by that unit in the manner recognised by law would be considered as joint family property. But in the case of two or more members of a joint Hindu family belonging to different branches or even to the same branch, they do not acquire the property as a corporate unit or for the corporate unit and, therefore, they are only governed by the terms of the contract, express or implied, where under they have acquired the property."
26. After discussing the various decisions and the tests, the learned judge summarises the legal position as follows :
" Coparcenary is a creature of Hindu law and cannot be created by agreement of parties except in the case of reunion. It is a corporate body or a family unit. The law also recognises a branch of the family as a subordinate corporate body. The said family unit, whether the larger one or the subordinate one, can acquire, hold and dispose of family property subject to the limitations laid down by law. Ordinarily, the manager, or by consent, express or implied, of the members of the family, any other member or members can carry on business or acquire property, subject to the limitations laid down by the said law, for or on behalf of the family. Such business or property would be the business or property of the family. The identity of the members of the family is not completely lost in the family. One or more members of that family can start a business or acquire property without the aid of the joint family property, but such business or acquisition would be his or their acquisition. The business so started or property so acquired can be thrown into the common stock or blended with the joint family property in which case the said property becomes the estate of the joint family. But he or they need not do so, in which case the said property would be his or their self-acquisition, and succession to such property would be governed not by the law of joint family, but only by the law of inheritance. In such a case, if a property was jointly acquired by them, it would not be governed by the law of joint family ; for Hindu law does not recognise some of the members of a joint family belonging to different branches, or even to a single branch, as a corporate unit. Therefore, the rights inter se between the members who have acquired the said property would be subject to the terms of the agreement where under it was acquired. "
27. Reference can also be made to Sunil Kumar vs. Ram Parkash AIR 1988 SC 576. In Kalloomal's case (supra), the Supreme Court graphically and illustratively has described the different kinds of partition of the larger joint Hindu family as follows :
" Take a joint family consisting of a father, his sons and grandsons as shown in the following genealogical tree :
A
B
C
D
E
F
G
H
I
J
When a partition takes place in the above family, there may be a partition when all of them A, B, C, D, E, F, G, H, I and J become divided each of them taking his rightful share in the family property. In this case, there is a total partition. The second kind of partition may be amongst four groups, the first consisting of A only, the second consisting of B, E and F, the third consisting of C, G and H and the fourth consisting of D, I and J each group taking one-fourth share in all the properties and the branch of B, the branch of C and the branch of D continuing as undivided families. The third kind of partition may be a partition where any one of the three branches the branch of B, or the branch of C or the branch of D separates from the rest of the family taking its share thus resulting in two undivided families one family which has gone out of the family and the other consisting of the remaining members. In these cases, the partition can be called partial, both as regards persons and as regards properties. The next kind of partition may be one where all the members divide amongst themselves only some of the family properties and continue as members of an undivided family owning the remaining family properties. This is called a partial partition as regards property. Even here the division of the property, which is the subject-matter of partial partition, may be group-wise also. In the case of a partial partition as regards property, one thing noticeable is that, after such partition, the property which is the subject-matter of partition is held by the members of the family as tenants-in-common and the rest of the family properties continue to be held by them as members of the undivided family.
28. One other aspect that has to be noticed is that partition of a joint Hindu family can be effected only by its coparceners. As observed by the Supreme Court in Kalloomal's case (supra) a declaration of intention of a coparcener to become divided brings about severance of status. There can be no partition when the HUF consists of only one coparcener. In V.V.S. Natarajan vs. CIT 1978 CTR (Mad) 106 : (1978) 111 ITR 539 (Mad) a Division Bench of the Madras High Court held that there can be no partial partition in a Hindu undivided family consisting of the karta, his wife and their two minor daughters. The Madras High Court held that as there was no coparcener in that Hindu undivided family apart from the karta, a partition was an impossibility in a family like that and that there was no valid partition that could be recognised under the provisions of the Income-tax Act. Rejecting the contention that there could be a partition even amongst members as contrasted with coparceners, in view of the language of s. 171 of the Act, the Madras High Court held as follows :
" Emphasis is placed by the learned counsel for the assessee on the word 'member' occurring in the above provision (sub-s. (2) of s. 171). According to him, it is not necessary that a person should be a coparcener in order to be eligible for being allotted a share on a partition. The provisions of the Income-tax Act cannot confer any right to partition which is not available to any person under the personal law by which he is governed. The provision of s. 171(2) is intended to apply only in the course of assessment so as to see whether the family continues to own the same properties which it owned in the earlier years. Sec. 171(2) cannot be held as giving any right to any member of the joint family which he or she did not have under the personal law governing the parties. We have indicated that the wife or the minor daughters of a Hindu coparcener would not be entitled to a share on a partition of the properties of the joint family and they would have only a right to maintenance, etc., for which proper provision would be made in the course of any partition that takes place. Where there is no scope for partition, there is no possibility of making a provision therein. "
29. A Full Bench of the Punjab and Haryana High Court in Sat Pal Bansal vs. CIT (1987) 59 CTR (P&H) 48 (FB) : (1986) 162 ITR 582 (P&H)(FB) upheld the view of the income-tax authority rejecting the claim of partial partition said to have been effected qua the family business capital at the instance of the wife of the karta holding as follows :
" The answer to the question referred to us obviously depends upon the nature of the rights of the wife in the property of the Hindu undivided family. It is not disputed that female members of a Hindu undivided family, according to the Hindu law, have no share in the joint family property and their interest is confined to maintenance only. As stated in paragraph 315 of Hindu law by Mulla, a wife cannot herself demand a partition of the Hindu undivided family property, but if a partition does take place between her husband and his sons, she is entitled to receive a share equal to that of a son and to hold and enjoy that share separately even from her husband. The share which is allotted to the wife or the mother, as held by the Full Bench of the Gujarat High Court in CGT vs. Mrs. Taramati Hariprasad Vasa (1969) 74 ITR 211 (Guj)(FB), is in lieu of her right of maintenance and the allotment of such a share does not show that she had any right or interest in the HUF property. Before one can visualise or think of a partition, the property has to be owned by more than one person. Obviously, the sole owner cannot divide the property. The grant of any share in the property by the sole surviving male member of the HUF to the wife or to the mother would be only in the nature of settlement of the property upon them in lieu of their right of maintenance and cannot by any stretch of reasoning be said to be a partition of the property amongst them. We are, therefore, of the considered view that no partition, partial or otherwise, would be possible in the case of an HUF consisting only of one male member or the sole coparcener. Similar view was taken by the Gujarat High Court in CIT vs. Shantikumar Jagabhai (1976) 105 ITR 795 (Guj) and the Madras High Court in T.G.K. Raman (HUF) vs. CIT (1982) 26 CTR (Mad) 440 : (1983) 140 ITR 876 (Mad), which we fully endorse. "
30. As regards the rights of a wife and widowed mother for shares at the time of partition of a Hindu undivided family, a Full Bench of this Court in A. Seetha mahalakshmamma vs. Y. Chalamaiah, AIR 1974 AP 130, clarified the position as follows after discussing the various texts and schools of Mitakshara :
" We are, however, of the clear opinion that since the parties are governed by the Madras school (sub-school of the Mitakshara), the wife or mother cannot claim any share in the joint family property as the practice of allotting shares to females, even if it existed at some distant period of time, has become obsolete in Southern India."
31. Mayne's Treatise on Hindu Law and Usage (Twelfth edition 1986) has this to say in para 455 at p. 697 :
"In Southern India, the rules of the Mitakshara law allotting a share upon partition to wives, widows, mothers and grandmothers have long since become obsolete, owing to the influence of the Smriti chandrika and the Sarasvati Vilasa which follows it and Apararka. The Smriti chandrika holds such a share to be merely an assignment by way of maintenance. Elsewhere, the Mitakshara rules have been in force. "
32. Now, with this legal background, what are the salient facts of the present case and what do we find as regards the partial partition of 16th Oct., 1978, set up on behalf of the petitioner The petitioner-Hindu undivided family consists of four members of whom three are coparceners, i.e., Satish Chandra Modi, and the two minors, Soham and Sourabh. So long as the petitioner joint family subsists without any severance of status between the coparceners or any one of them, there cannot be a minor joint family comprising Satish Chandra Modi and Sourabh or of Satish Chandra Modi and Soham or of Sourabh and Soham within the petitioner joint family. This follows from Sudarsanam Maistri vs. Narasimhulu Maistri (1901) ILR 25 Mad 149. In that case, the question directly arose as to whether there could be a joint family between two brothers when they continued to be members of the larger joint family consisting of their father, themselves and three other brothers. Bhashyam Ayyangar J., held that it was impossible to regard the two brothers as forming in themselves an undivided family owning joint family property as a corporate body. It was in this connection that the learned judge held that the Hindu undivided family under the Mitakshara doctrine was purely a creature of law and could not be created by act of parties, save in so far as that, by adoption, a stranger could be affiliated as a member of that corporate body and that persons who by birth or adoption were not members of a Hindu family could not, in the absence of a custom having the force of law, by mere agreement, become or be made members of a joint family. The learned judge also clarified the position resulting when one or more persons become divided by partition. He observed as follows :
" So far as this Presidency is concerned, though there is no reported decision bearing directly on the point (Peddayya vs. Ramalingam, ILR 11 Mad 406, dictum at p. 408), the principle generally recognised and acted upon is that though there can be no compulsory partial partition either in respect of the joint property belonging to the family, or in respect of the persons constituting the undivided family, yet by mutual agreement of parties the partition can be partial either in respect of the property or of the persons constituting the family. And according to usage and custom, the remaining members of an undivided family from which one or more alone have become divided, continue as an undivided family in its normal state and not as members, who after partition have become re-united."
33. In the present case, undoubtedly, the petitioner-Hindu undivided family continued after the partial partition of 16th Oct., 1978, and there was no severance of status between its three coparceners. The partial partition set up related to only one of the assets of the petitioner-Hindu undivided family, i.e., Rs. 30,000. The memorandum regarding that partial partition, already extracted above, recites that Rs. 20,000 was received by "minor Hindu undivided family with Soham" and that the remaining Rs. 10,000 was received by Master Sourabh. The claim made on behalf of the petitioner-Hindu undivided family on the basis of this partial partition is that there were two parties to this partial partition one, the minor Soham ; and the other the minor Hindu undivided family with Sourabh. One would have expected that when the assets of Rs. 30,000 belonging to the petitioner-Hindu undivided family was partitioned, a divisible asset, it would be divided between all those entitled to a share, i.e., the three coparceners, Satish Chandra Modi, Sourabh and Soham and Tarulata also, if she was also entitled to a share though not as a coparcener, i.e., into three or four shares, as the case may. Unless there was severance of status between the minor, Soham, and the remaining members of the petitioner-Hindu undivided family, a minor Hindu undivided family consisting of Satish Chandra Modi, Tarulata and Sourabh could not have come into existence. As held by the Supreme Court in Kalloomal's case (supra) when there is partial partition of one or more items of the joint properties, the family ceases to be undivided as regards the properties in respect of which partition takes place. In the present case, if really there was a partial partition in respect of a single asset, i.e., Rs. 30,000 belonging to the petitioner HUF, the petitioner HUF should have got divided in respect of this Rs. 30,000 with a share allotted to each of its members entitled to a share. There could not have been Rs. 20,000 allotted to a minor HUF with Sourabh because when the petitioner gets disrupted in respect of that asset, all the three coparceners and Tarulata hold Rs. 30,000 as tenants-in-common in their individual capacity. If unnatural combinations of coparceners could be constituted into minor HUFs by partial partitions contrary to those illustrated by the Supreme Court in Kalloomal's case (supra), it could result in a chaotic multiplication of such artificial minor Hindu undivided families. Take for instance, a Hindu undivided family consisting of five coparceners father and four sons ; they can constitute innumerable minor Hindu undivided families by different permutations and combinations of the five coparceners by effecting so-called partial partitions between each of such minor Hindu undivided families or more of them and the remaining coparceners by dividing on each occasion a sum of money. We are of the view that this is not permissible under the Mitakshara and that, therefore, the partial partition in question is not valid under the Hindu law.
34. Even assuming that such a partial partition as claimed on behalf of the petitioner in the present case is permissible under Hindu law, we find that it does not satisfy the definition of "partition" and "partial partition" in the Explanation to s. 171 of the Act which is as follows :
" Explanation. In this section,
(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 Hindu undivided family, or the properties belonging to the Hindu undivided family, or both. "
35. It cannot be disputed that the asset in the present case, i.e., Rs. 30,000, admits of physical division. In the present case, there was no physical division between all the sharers as required by the definition of partition. Unless that is satisfied, there can be no partial partition either, because "partial partition" is defined to mean a partition which is partial. In ITO vs. N.K. Sarada Thampatty (1990) 89 CTR (SC) 154 : (1991) 187 ITR 696 (SC) the Supreme Court categorically held as follows :
"Under the Hindu law, members of a joint family may agree to partition of the joint family property by a private settlement, agreement, arbitration or through court's decree. Members of the family may also agree to share the income from the property according to their respective shares. In all such eventualities, the joint status of family may be disrupted but such disruption of family status is not recognised by the Legislature for purposes of income-tax. Sec. 171 of the Act and the Explanation to it, prescribe a special meaning to partition which is different from the general principles of Hindu law. It contains a deeming provision under which partition of the property of the Hindu undivided family is accepted only if there has been actual physical division of the property ; in the absence of any such proof, the Hindu undivided family shall be deemed to continue for the purpose of assessment of tax. Any agreement between the members of the joint family effecting partition or a decree of the Court for partition cannot terminate the status of a Hindu undivided family unless it is shown that the joint family property was physically divided in accordance with the agreement or decree of the court."
36. The decision of the Supreme Court in Apoorva Shantilal Shah vs. CIT (1983) 141 ITR 558 (SC) is of no assistance to the petitioner herein. That was also a case of a Hindu undivided family consisting of four members the karta, his wife, and his two minor sons governed by the Mitakshara school of Hindu law. It was claimed on behalf of that Hindu undivided family that two partial partitions had taken place amongst its members ; one in respect of 200 shares of Gujarat Steel Tubes Ltd., and another in respect of 1,777 shares of the same company. The partial partitions were embodied in the memoranda of agreements of partition. The ITO refused to record that there had been a partial partition of the joint family properties because the remaining shares, after making certain allocations in favour of the two minor sons, were not allotted in their entirety to the remaining third coparcener, i.e., the karta, separately or to the karta and his wife jointly. The ITO also objected to the said partial partitions on the ground that the karta alone could not have effected the partial partitions involving minor coparceners, and also on the ground that the distribution of the shares had not been made equally either amongst the three members, including the two minor sons, or amongst the four members of the Hindu undivided family, as the karta's wife also became entitled to an equal share on partition between the father and the sons. The Supreme Court held in that case that :
" . . . a partial partition of properties brought about by the father between himself and his minor sons cannot be said to be invalid under the Hindu law and must be held to be valid and binding. "
37. The Supreme Court also made it clear that this right of the father to effect a partial partition of the joint family properties between himself and his minor sons, whether in exercise of his superior right as father or in exercise of the right as patria potestas should necessarily be exercised bona fide by the father and is subject to the right of the sons to challenge the partition if the partition is not fair and just. On the question of unequal distribution among the co-sharers, the Supreme Court further held in that case, as follows :
" The other question which falls for determination is whether the partition can be said to be bad as at the time of the partition there was no equal division of the shares by the father amongst himself and his minor sons and a part of the shareholding had not been distributed to the father or to the father and mother jointly. We may point out that the Appellate Assistant Commissioner has found that at the time of division of the shares, the shares had been distributed equally taking into consideration the shares which had earlier been distributed amongst the parties. In our opinion, a partial partition of any joint family property by the father between himself and his sons does not become invalid on the ground that there has been no equal distribution amongst the co-sharers. It is expected that the father who seeks to bring about a partial partition of joint family properties will act bona fide in the interest of the joint family and its members, bearing in mind, in particular, the interests of the minor sons. If, however, any such partial partition causes any prejudice to any of the minor sons and if any minor son feels aggrieved by any such partial partition, he can always challenge the validity of such partial partition in an appropriate proceeding and the validity of such partial partition will necessarily have to be adjudicated upon in the proceeding on a proper consideration of all the facts and circumstances of the case. Till such partial partition has been held to be invalid by any competent court, the partial partition must be held to be valid. It is not open to the income-tax authorities to consider a partial partition to be invalid on the ground that shares have not been equally divided and to refuse to recognise the same. It is undoubtedly open to the ITO before recognising the partition to come to a conclusion on proper enquiry whether the partition is genuine or not. If the ITO on enquiry comes to a finding that the partition is sham or fictitious, he will be perfectly within his right to refuse to recognise the same. In the instant case, there is no finding that the partial partition is sham or fictitious or that the partial partition is not a genuine one and has not been acted upon. As there is no finding that the partial partition is sham or fictitious or not a genuine one, on enquiries made by the ITO, and as the partial partition is otherwise valid under the Hindu law, the partial partition has necessarily to be recognised under the provisions of s. 171 of the Income-tax Act and the assessment must be necessarily made on the basis that there is partial partition of the said shares. "
38. Thus, in that case, it was found that there was division of property between all the co-sharers and it was also observed that the Appellate Assistant Commissioner found that at the time of division of the shares, the shares had been distributed equally. That is not a case where there was no partial partition between all the co-sharers as in the present case.
39. The decision of the Supreme Court in Joint Family of Udayan Chinubhai Etc. vs. CIT (1967) 63 ITR 416 (SC) has also no application to the facts of the present case. That was a case of a partition effected by a decree of a civil Court where under a coparcener went out of the joint family taking his share of the joint family properties and did not continue to remain a member of the undivided Hindu family. An application under sub-s. (1) of s. 25A of the Indian Income-tax Act, 1922, was made for an order recording the partition and the ITO recorded the partition observing that pursuant to the decree of the High Court for partition of the properties, the Hindu undivided family was deemed to have been partitioned. The Supreme Court held that when the partition was accepted by the ITO, the position would continue thereafter and that no fresh application in respect of that partition need be made. The question whether the partition that was effected by the civil Court was valid or not was not before the Supreme Court in that case.
40. The decision of the Supreme Court in State of Maharashtra vs. Narayan Rao Sham Rao Deshmukh (supra) has no relevance for the present case because that deals with the question whether a female, who inherits a share in a joint family property by reason of the death of the male member of the family, ceases to be a member of the family without her volition to separate herself from the family. The decision of the Supreme Court in Gurupad Khandappa Magdum vs. Hirabai Khandappa Magdum (supra) and the other decisions referred to by the first respondent in his common order dt. 30th March, 1987, also are not relevant because they do not touch the question involved in the present case.
41. In the light of the above discussion, we are satisfied that the orders of the respondents in respect of the partial partitions set up on behalf of the petitioner-Hindu undivided family are not vitiated by any error warranting interference by this Court in exercise of the jurisdiction under art. 226 of the Constitution of India. In the result, the writ petitions are dismissed.
No costs.
