Untwalia, C.J.

1. These, are two references under Section 27(1) of the Wealth-tax Act made by the Income Tax Appellate Tribunal, Patna Bench, on the following question of Jaw :

"Whether, on the facts and in the circumstances of the case, the assessee should be assessed to wealth-tax in the status of a Hindu undivided family or as individual "

2. The facts stated in the statement of the case are these. Shri Mahabir Prasad Poddar and his three sons, named, Atmaram Poddar, Ramautar Poddar and Gopilal Poddar, constituted a Hindu undivided family. The assessee is the widow of Sri Atmaram Poddar who died on January 8, 1953, leaving behind him the assessee, a son and a daughter. The son also died on February 2, 1955. On October 14, 1955, a partition took place in the Hindu undivided family, the head of which was Mahabir Prasad Poddar. The assessee got one-fourth share which was invested in the firm, M/s. Sheonandarai Gajanand, wherein she became a partner. On October 3, 1957, the assessee adopted one Sri Pawan Kumar Poddar as her son. The deed of adoption was executed and registered on August 11, 1964. The assessment years in question in these two references are 1964-65 and 1965-66, the corresponding valuation dates being October 26, 1963, and October 15, 1965, respectively. The assessees stand before the Wealth-tax Officer was that as a result of this adoption a Hindu undivided family was formed between herself and the adopted son and hence she should be assessed in the status of a Hindu undivided family for the purpose of wealth-tax assessment. The Wealth-tax Officer came to the following conclusions:

(a) The assessee adopted the son to herself and not to her deceased husband.

(b) The property which the assessee received as a result of partition became her absolute property under Section 14 of the Hindu Succession Act.

(c) The adoption of the child did not convert the absolute property into joint family property.

(d) Under Section 12(c) of the Hindu Adoption and Maintenance Act, the adopted child did not divest any person of any estate which had vested in him or her before the adoption.

3. Copies of the orders passed by the Wealth-tax Officer for the two assessment years are annexures "A" and "A-1" to the statement of the case and form its part.

4. On appeal, the Appellate Assistant Commissioner also held that the property received by the assessee on partition had become her absolute property and the subsequent adoption of the child could not divest her of the estate and thus confirmed the order made by the Wealth-tax Officer, Copies of the appellate orders passed by the Appellate Assistant Commissioner are annexures "B" and "B-1".

5. On further appeal to the Tribunal it was held :

(a) The provisions of the Hindu Adoption and Maintenance Act had taken away the widows right to make an adoption to her deceased husband and thereby continue his line. The recitals in the adoption deed clearly showed that the adoption made by the assessee was for herself and not for her deceased husband,

(b) By virtue of Section 14 of the Hindu Succession Act the assessee had become a fresh stock of descent as she had become the full owner of her husbands properties. Her adopted son would he her heir. She and her adopted son may form one joint family but the adopted son could not have any right by birth in respect of the properties owned by her. The family consisting of the assessee and the adopted son could not trace its descent to a male ancestor, as the adoption was made to the assessee and not to her deceased husband. The assessee and her adopted son could not constitute a Hindu joint family as recognised in Hindu law and she had been correctly assessed in the status of an individual." A copy of the order of the Tribunal is annexure "C".

6. The view of the Tribunal interpreting certain provisions of the Hindu Adoptions and Maintenance Act, 1956, is clearly wrong and against the decisions of the Supreme Court in Sawan Ram v. Mst. Kalawanti : [1967]3SCR687 and Smt. Sitabai v. Ramchandra : [1970]2SCR1 . In the former case the Supreme Court has pointed out at page 1764-65 :

"......adoption to a Hindu was intended to cover cases where an adoption is by one person, while the child adopted becomes the adopted son of another person also. It is only in such a case that it can be said that the adoption has been made to that other person. The most common instance will naturally be that of adoption by a female Hindu who is married and whose husband is dead, or has completely and finally renounced the world, or has been declared by a court of competent jurisdiction to be of unsound mind. In such a case, the actual adoption would be by the female Hindu, while the adoption will be not only to herself, but also to her husband who is dead or has completely and finally renounced the world or has been declared to be of unsound mind."

7. It would be seen under the new Hindu Adoption Act that even an unmarried female can adopt. In such a case the adoption would be to her only. But the widow does not cease to be the wife of her deceased husband merely by death. The adopted child becomes the child of her husband also. In the case of Smt. Sitabai, Ramaswami J., delivering the judgment on behalf of the court, has pointed out in paragraph 6 at page 347:

"The scheme of Sections 11 and 12, therefore, is that in the case of adoption by a widow the adopted child becomes absorbed in the adoptive family to which the widow belonged. In other words the child adopted is tied with the relationship of sonship with the deceased husband of the widow. The other collateral relations of the husband would be connected with the child through that deceased husband of the widow."

8. It is not necessary to enter into the debatable question in this case as to whether by adoption the adopted child could have divested the widow, the assessee in this case, of her absolute estate. I am inclined to think that on adoption the child came into existence as if he was a natural son of his deceased father. He will have all the rights of such a son. But I do not express any definite opinion in that regard in this judgment. Suffice it to say that the question is not germane for the point at issue. It is clear that when she adopted the child and she had an unmarried daughter in existence, a joint Hindu family came into existence, even assuming it was not existing from before. For the purpose of the wealth-tax, therefore, the status of the assessee was that of a Hindu undivided family and not that of an individual.

9. I would also like to add that even without the adoption, on certain authorities of the Supreme Court and this court, a joint Hindu family was in existence consisting of the widow of Atmaram and her daughter. It is to be remembered that when Atmaram died his natural born son was surviving. Undoubtedly, the joint family was in existence or a Hindu undivided family was there, as a widow could adopt a child. In such a situation on the authorities of this court in Panna Lal Rastogi v. Commissioner of Income Tax, : [1967]65ITR592(Patna) and that of the Supreme Court in N.V. Narendranath v. Commissioner of Wealth-tax : [1969]74ITR190(SC) it can be safely held that the Hindu undivided family was always in existence irrespective of the death of the natural born son of Atmaram or the adoption being made later. I have ventured to express a view of my own in the case of the existence of the joint Hindu family on partition and drawn a distinction between the cases of the continuance of the Hindu undivided family on the death of a male member and the coming into existence of a new family on partition. This I have done, sitting with Nagendra Prasad Singh J., in the case of Commissioner of Wealth-tax v. Pannalal Rastogi : [1974]96ITR110(Patna) (Tax Case No. 19 of 1969 decided on the 22nd November, 1973). Yet I had followed the earlier Bench decision of this court, as I was bound to do, in the case of Panna Lal Rastogi. Following the aforesaid decisions, it has also to be held in this case that even without adoption the Hindu undivided family was there and the status of the assessee in the two assessment years was surely such on her adopting a child which was not only an adoption to her but also to her husband.

10. For the reasons stated above, I would answer the question referred to this court in favour of the assessee and against the revenue and hold that on the facts and in the circumstances of the case the assessee should be assessed to wealth-tax in the status of a Hindu undivided family and not as individual. The assessee must have the costs of this reference. A consolidated hearing fee is assessed at Rs. 100 only.

S.K. Jha J.

11. I agree.