# APOORVA SHANTILAL SHAH v. COMMISSIONER OF INCOME TAX GUJARAT-I, AHMEDABAD

- **Citation:** [1983] 2 S.C.R. 492
- **Court:** Supreme Court of India
- **Decided:** 1983-03-03
- **Case number:** Civil Appeal No. 35 of 1982
- **Bench:** P. N. Bhagwati, Amarbndra Nath Sen, Jj.J
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/apoorva-shantilal-shah-v-commissioner-of-income-tax-gujarat-i-ahmedabad-8834
- **Pages:** 25

## Headnote

Partial partition- lVhether the father in exercise of his right as "patrla
potestas" or otherwise can effect a pa,tial partition between himself and his minor
so1',_s of joint family properties of a Hindu Joint Family governed by the Mitakshara
School of Hindu Law-Income Tax Act, 1961, Section 171.
The assessee
is a Hind undivided Family consisting of four members,
namely, Sri Apoorva Sbantilat Shah, his wife Smt. Karuna and their minor sons
Chintan and Tejat. During
the
assessment pertaining to the assessment year
1975-76. Shri
Apoorva as a Karta of the H.U.F. made an application to the
Income Tax Officer for recognising partial partition under S. 171 of the Income
.Tax Act, 1961 (hereinafter referred to as the Act) claiming that two partial parti·
tions had taken place amongst the members of the said family, one on 24.12.1973
in respect of 200 shares of Gujarat Steel Tubes Ltd. and the other on 29.12.1973
in respect of 1777 shares of the same company. The Ince.me Tax Officer refused
to· record them for three reasons. namely (i) the partitions have not been made at
the instance of the minor sons; (ii) after making certain allocations in favour of
the two minor sons, the remaining shares were not allotted in their entirety to the
remaining third coparcener, namely Apoorva separately or Apoorva
and Smt.
Karunajointly describing them as H.U.F'. and (iii) the distribution of shares had
not been made equally either amongst the three members including the two minor
sons or amongst the four members of the H.U.F., as Apoorva's wife Karuna also
became entitled to an equal share on partition between the father and sons. The
appeal preferred before the Assistant Appellate Commissioner was accepted. The
further appeal, by Revenue to the Income Tax Appellate Tribunal was allowed
since the Tribunal was of the opinion that the
partial partitions in the instant
case, being outside the framework of the Hindu Law could not be recognised as
valid for the purposes 6f Section 171 of the Income Tax Act. All the questions
referred to in the reference under Section 256 (1) to the High Court were answered against
the
assessee. The High Court held that under Hindu Law the
father has no power or authority to effect any partial partition of joint family
properties
between himself and &his minor sons. Hence the appeal by speci~l
Jeave.
AHowing the appeal, the Cour~
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APOORVA SHANTILAL v. c.1.r.
493
HELD : J. I. Partial Partition of the shares belonging to the Hindu
A
undivided Family cannot be said to be bad either under the Hindu Law or under
the Indian Income Tax Act. [514 H, SIS A]
1.2. Partial partition of properties brought about by the father between
himself and his minor sons is valid and binding under the Hindu Law. This right
of the father to effect a partial partition of joint family properties between himself
and bis minor sQDs, whether in exercise of bis superior riaht as father or in exercise of the right as patria poles/as has neqessarily (_to 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. [Sll C·E]
•
1.3. The
right of the father to bring about the disruption nf the joint
family properties in exercise pf his superior right, as fathCt" or
of
his rights as
patria potestas is recognised in ancient Hindu Law. [509 D-E]
1.4. The stand taken by the High Court to the effect that the propo,ition
laid
down
by judicial decisions to the effect that partial partition of a joint
Hindu family qua some joint family properties or qua some members of
the
joint family is permissible and valid in law, will apply only when partial partition
is f':ffected with the consent of the members of joint family and cannot be extended
to a case when partial partitiori is sought to be brought by father in exercise of
his superior rights as father or his right as patria potestas is incorrect. (509 F-H]
If the father in exercise of his superior
right

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APOORVA SHANTILAL SHAH
v.
COMMISSIONER OF INCOME TAX
GUJARAT-I, AHMEDABAD
March 3, 1983
[P. N. BHAGWATI AND AMARBNDRA NATH SEN, 'JJ.J "
Partial partition- lVhether the father in exercise of his right as "patrla
potestas" or otherwise can effect a pa,tial partition between himself and his minor
so1',_s of joint family properties of a Hindu Joint Family governed by the Mitakshara
School of Hindu Law-Income Tax Act, 1961, Section 171.
The assessee
is a Hind undivided Family consisting of four members,
namely, Sri Apoorva Sbantilat Shah, his wife Smt. Karuna and their minor sons
Chintan and Tejat. During
the
assessment pertaining to the assessment year
1975-76. Shri
Apoorva as a Karta of the H.U.F. made an application to the
Income Tax Officer for recognising partial partition under S. 171 of the Income
.Tax Act, 1961 (hereinafter referred to as the Act) claiming that two partial parti·
tions had taken place amongst the members of the said family, one on 24.12.1973
in respect of 200 shares of Gujarat Steel Tubes Ltd. and the other on 29.12.1973
in respect of 1777 shares of the same company. The Ince.me Tax Officer refused
to· record them for three reasons. namely (i) the partitions have not been made at
the instance of the minor sons; (ii) after making certain allocations in favour of
the two minor sons, the remaining shares were not allotted in their entirety to the
remaining third coparcener, namely Apoorva separately or Apoorva
and Smt.
Karunajointly describing them as H.U.F'. and (iii) the distribution of shares had
not been made equally either amongst the three members including the two minor
sons or amongst the four members of the H.U.F., as Apoorva's wife Karuna also
became entitled to an equal share on partition between the father and sons. The
appeal preferred before the Assistant Appellate Commissioner was accepted. The
further appeal, by Revenue to the Income Tax Appellate Tribunal was allowed
since the Tribunal was of the opinion that the
partial partitions in the instant
case, being outside the framework of the Hindu Law could not be recognised as
valid for the purposes 6f Section 171 of the Income Tax Act. All the questions
referred to in the reference under Section 256 (1) to the High Court were answered against
the
assessee. The High Court held that under Hindu Law the
father has no power or authority to effect any partial partition of joint family
properties
between himself and &his minor sons. Hence the appeal by speci~l
Jeave.
AHowing the appeal, the Cour~
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APOORVA SHANTILAL v. c.1.r.
493
HELD : J. I. Partial Partition of the shares belonging to the Hindu
A
undivided Family cannot be said to be bad either under the Hindu Law or under
the Indian Income Tax Act. [514 H, SIS A]
1.2. Partial partition of properties brought about by the father between
himself and his minor sons is valid and binding under the Hindu Law. This right
of the father to effect a partial partition of joint family properties between himself
and bis minor sQDs, whether in exercise of bis superior riaht as father or in exercise of the right as patria poles/as has neqessarily (_to 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. [Sll C·E]
•
1.3. The
right of the father to bring about the disruption nf the joint
family properties in exercise pf his superior right, as fathCt" or
of
his rights as
patria potestas is recognised in ancient Hindu Law. [509 D-E]
1.4. The stand taken by the High Court to the effect that the propo,ition
laid
down
by judicial decisions to the effect that partial partition of a joint
Hindu family qua some joint family properties or qua some members of
the
joint family is permissible and valid in law, will apply only when partial partition
is f':ffected with the consent of the members of joint family and cannot be extended
to a case when partial partitiori is sought to be brought by father in exercise of
his superior rights as father or his right as patria potestas is incorrect. (509 F-H]
If the father in exercise of his superior
right
or of bis right as patria
potestas in entitled to bring about a complete disruption of the joint family and
to effect a complete partition of joint family properties of a Hindu joint family
consisting of himself and bis -minor sons even against the wishes of the minors
and if partial partition be permissible with the consent of sons when they have
all become major, the pOwer or authority of the father to effc:ct the partition of
properties c.aonot be limited only to a case where the partition is tot111. Even if ·
the test of consent is to apply, the father as the natural guardian of the minor
sons will normally be in a position to give such consent and it cannot be said as
matter of universal application )hat in all such cases of partition, part.iaJ or other·
wise, there is bound to be a conflict of interest between the father and bis sons.
If tbe father does not act bonafide in the matter when he effects partition of joint
family properties between himself and his minor sons, whether wholly or partially
the sons on attaining majority may challenge the partition and ask for appropriate
~eliefs lincluding a proper partition. In appropriate cases even during minority,
the minor sons through a proper guardian may impeach the validity of the partition brought ab~ut by the fathCr either in entirety of the joint family properties or
only in respect of part thereof, if the partition had been effected by'(be father to
the detriment of the minor sons and to the prejudice of their interest. [SID A-HJ
Charandas Haridas v. Commissioner of Income Tax, Bombay'(1960) 39
I. T.R. 202 (S.C.) Kalloomal Tapeswari Prasad (HUF) v. Commissiontr of Income
Tax. Kanpur (1982) 133 l.T.R. 690 {S.C.) followed:
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SUPREME COUF:T REPORTS
[19831 2 S,C.R.
1.5. The provisions of the Income Tax Act, 1961 before the amendment
by Finance Act (No. 2 of 1980) also clearly recognise partial partition. The defini·
tioo of partial partition in Explanation (b) filakes it clear that partial partition as
regards the persons constituting the Hindu undivided family or as regards properties belonging to the Hindu Undivided family, or both, is recognised. [514 F·G]
2.1. A partial partition of any joint family property by the·father between
himself and his sons does not become inva1lid on the ground that there bas 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 bana fide
in the interest of the joint family and its members bearing in mind in particular
the interest of the minor sons. If, however. any such partial revision causes any
prejudice to any of the minor sons and if any minor son feels aggrieved by any
such partial partition, be can always challenge the validity of such partial parti·
tion in an appropriate proceeding and the validity of such partial partition will
necessarily have to be adjudicated upon in the proceeding on a proper consideratioil of an 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. [515 D-FJ
2.2. It is
not open to the Income-tax Authorities to consider a partial
partition to be invalid on the ground that shares b3.ve not been equally divided
apd to refuse to recognise the same. It is uodoubted_ly open to the: Income-tax
Officer before recognising the partition to come .to a conclusion on proper enquiry
whether the
partition is genuine or not. If the Income·tax Officer on enquiry
comes to a finding that the partition is sham or fictitious, be will be perfectly
within his right to refuse to recognise the same. [515 F-GJ
·
2.3. 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 ha~ not
been acted upon. As there is no finding that the partial partition is sham or ficti·
tious or not a genuineione, on enquiries made by the Income-tax Officer, and as
the partial partition is otherwise valid under the Hindu Law1 the partial partition
baS 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. _[515 H, 5,16 A-BJ
CIVIL APPELLATE JURISDICTION :
Civil Appeal No. 35 of
1982
Appeal by Special leave from the Judgment and Order dated
the 9th July, 1981 of the Gujarat High Court in Income Tax Reference No. 28 of 1980.
P.H. Parekh, Harlsh Salva and Gautam Philip for the AppelJ,.nt.
.,
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APOORVA SHANTILAL v. C.l.T. (A.N. Sen, J.)
49S
S.C. Manchanda, Anii·Dev Singh and Miss A. Subhashini for
the Respondent.
The Judgment of the Court was delivered by
AMARENDRA NATH SEN, J. The principal question for decision
in this appeal by Special Leave is whether the father in exercise
of his right as Patria Potestas or otherwise can effect a partial
partition between himself and his minor sons of joint family properties of a Hindu joint family governed by the Mitakshara School of
Hindu Law.
The assessee, a Hindu undivided family (hereinafter referred to
as H.U.F.), which consists of four members, namely,(l) Shri Apoorva
Shantilal Shah, 2) bis wife Smt. Karuna and their minor sons (3)
Chin tan and 4) Tejal, is the appellant before us. The members of the
H.U.F. are governed by the Mitaksbara School of Hindu Law. The
assessment year in question is the year 1975-76. During the assessment pertaining to the assessment year under consideration, Sbri
Apoorva who is the father of the minor sons and husband of Smt.
Karuna and the Karta of the H. U .F. made an application to the
Income Tax Officer for recognising partial partition under S. 171 of
the Income Tax Act, 1961 (hereinafter referred to as the Act), claiming that two partial partitions had taken place amongst the members
of the said family, one on 24.12.1973 in respect of 200 shares of
Gujarat Steel Tubes Ltd. and the other on 29.12.1973 in respect of
1777 shares of the same company.
On enquiry the Income-Tax Officer (hereinafter for the sake of
brevity referred to as I.T.O.) found that the partial partitions had
been embodied in memoranda of agreements of partition. The I.T.O.
however, refused to record that there had been a partial partition of
joint family properties, as he was of the view that partial partitions in
question could not be recognised inasmuch as the remaining shares,
after making certain allocations in favour of the two minor sons were
not allotted in their entirety to the
remammg . third coparcener,
n•mely, Sbri Apoorva separately or to Shri Apoorva and his wife
Karuna jointly, describing them as members of the H.U.F. The I.T.O.
further held that the said partitions did not purport to have been
made at th~ .instance of the minor children, as this course would require the apprQY!!l ()f the <;:ourt b11t the s~me l!ad been purported to
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496
SUPRBMB COURT RBPORTS
(1983) 2 S.C.R.
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have been m.ade at the instance of Shri Apoorva. The I. T.O. hinted
in the order 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 H. U.F., as Apoorva's wife
Karuna also became entitled to an equal share on partition between
the father and the sons.
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Against the order of the I.T.O. the assessee H.U.F. presented
an appeal before the Appellate Assistant Commissioner (hereinafter
referred to as A.A.C. for the sake of brevity). The A.A.C. allowed
the appeal and held that there had been genuine partial partitions
between the coparceners in respect of the said shares. The A.A.C.
held that it was not necessary to obtain courCs sanction even in a
case where some of the parties to the partition were minors. As regards
the point that the distribution of shareholdings had not been made
on equal basis, the A.A.C., taking into consideration some earlier
partitions, came to the conclusion that the distribution had been
equally made. The A.A.C. further observed that even if the distri·
bution had not been made on equal basis that would not affect the
validity of the partitions in question and the minor sons, if they felt
aggrieved in this regard, could on attainment of majority seek to
avoid the said partitions.
Aggrieved by the order of the A.A.C., the Revenue went up in
appeal to the Income· Tax Appellate Tribunal (referred to as tribunal
hereinafter for the sake of brevity) to challenge]the A.A.C's recogni·
tion of the said partitions. The Tribunal held for reasons recorded in
the order that partial partitions in the instant case were out,ide the
framework of the Hindu Law and as such they could not be recogni·
sed as valid for the purposes of S. 171 of the Act. In that view of the
matter the Tribunal . set asideihe A.A.C's order and restored the
order of the I.T.O.
Under S. 256 (1) of the Act, the Tribunal referred the following question to the High Court :-
(I) Whether on the facts and in the circumstances of
the'.case, the Tribunal was!right in holding that Shri Apoorva
Shantilal could not himself have given consent on behalf
of his minor sons to the partitions proposed b:y him in bis
individual capacity as father 7
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APOORVA SHANTILAL P. C.l.T. (A.N. Sen, .1.)
497
(2) Whether on the facts and in the circumstances of
the case, the Tribunal was right in holding that the partial
partitions were outside the framework of Hindu Law ?
(3) Whether on the facts and in the circumstances of
the case, the Tribunal was right in holding that the partial
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partitions could not be recognised as valid for the purpose
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of section 171 of the Income·tax Act, 1961?
( 4) Whether on the facts and circumstances of the case,
the Tribunal was right in holding that partial partitions
made by a Hindu father in exercise of his patria potestas
cannot be recorded as a valid partitions under section 171
of the Income-tax Act, 1961 ?
(5) Whether on the facts and in the circutnstances of
the case, the Tribunal was right in holding that the partial
partition did not amount to a family arrangement in which
the father acted as a natural guardian of the two minors
sons after he bad exercised. his patria potestas?
(6) Whether the Income-tax Department is competent
to challenge the exercise of patria potestas by a Hindu
father in respect of coparcenery property, making a partial
partition?
For reasons recorded in the judgment the High Court answered
all the questions in the affirmative and against the assessee. The High
Court in its judgment has held that the father under the Hindu Law
has no power or authority to effect any partial partition of Joint
family properties between himself and his minor sons. The High Court
has observed that apart from the decision of the Madhya Pradesh
High Court in the case of Commissioner of Income-tax v. Seth
Gopaldas H.U.F. (') there was no decision of any court on the point.
The High Court also considered other decisions and books and
treatises on Hindu Law. The Higb,Court held that on a consideration
of the authorities, the following propositions were established :.
I. From the. stand point of ancient Hindu Law, what
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was recognised was only a paflition in respect of all the
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SUPREME COURT 'REPORTS
11983) 2 S.C.R.
properties of the H.U.F., upon disruption of the status of
H.U.F. regardless of whether the properties were actually
divided by metes and bounds or whether these were thereafter (after distruption of joint status) held as tenants-in
common.
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2. Partial partition in the sense of division in respect of
part of the assets while continuing the status of HUF in
respect of rest of the assets was not known to the ancient
Hindu Law and was not recognised by ancient Hindu
Law.
3. Partial Partition in the sense of division of some of
the properties whilst continuing the status of HUF in respect of other items of property originally belonging to the
HUF came to be recognised only later on by evolution of
custom and by judge-made law.
4. Such a partial partition was so recognised only if it
was made by consent of all the coparceners. In other words,
partial partitions in respect of only some items of property
whilst continuing the status of HUF in respect of rest of
the items of property could be effected only with the consent
of all the coparceners. When there was a disruption of the
status of the HUF only one or more of the coparceners
could not insist for division of some items of the property
without effecting division in respect of all the items of 'pro·
perties except by consent of all the coparceners.
5. In respect of a joint family consisting of a father
and bis sons, the traditional Hindu Law recognised the
right of a father in his capacity as patria protestas to exercise his extraordinary power to disrupt the Status of HUF
and to divide bis sons inter se without their consent subject
to the rider that 'all' assets of the HUF were subjected to
partition.
6. The aforesaid extra-ordinary power is subject to the
qualification that he gives to his sons an equal share and
division is not unfair (vide Gupte's Hindu Law 2nd Edn.,
Page 259). "The Power of the father to sever the sons inter
se is a survival of the patria potestas and may be exercise<l
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APOORVA SHANTILAL v. C.I.T. (A.N. Sen, J.)
499
by him without the consent of his sons'" ... "Again, in all
cases his power must be exercised by him bonafide and in
accordance with law; the division must not be unfair and
the allotment must be equal. He must give his sons equal
share with himself."
'1. There is nothing in (I) either ancient Hindu Law or
(2) cμstomary or judge·made law which authorises the father
in exercise of his extraordinary power to effect a partial
partition of HUF consisting of himself and his minor sons
by dividing some items of properties whilst continuing the
joint status in respect of the rest of the properties.
The High Court observed :-
"The validity of the aforesaid propositions is incapable
of being disputed and has not been disputed. What has
bee.o contended on behalf of the assessee is that whilst there
is no express provision in so many words, either in the
ancient Hindu texts or Judge-made law, that the power of a
Hindu father to effect partition of a HUF consisting of him·
self and his sons including minor sons in exercise of his
power as patria protestas extends even to partition in respect of only some items of property it is required to be
inferred by implication. Io other words, it is argued that
though there is no express reference to the power to effect
that partial partition in the sense of division of some items
of property while continuing the status of HUF in respect
of the rest and though such power is not recognised in
terms, it follows as a necessary corollary."
The High Court noted that this contention has been negatived by the Madhya Pradesh High Court in the case of Gopalda1
(supra) and the High Court for reasons recorded in~the judgment
rejected this contention. The High Court further held that the
transaction in question was in any event invalid in the facts and in
the circumstances of this case.
Aggrieved by the judgment of the High Court, the assessee
with special leave granted by this Court has preferred this appeal.
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SUPREME COURT REPORTS
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In this appeal before us, two main contentions have been urged
on behalf of the appellant. The first contention urged is that the
High Court went wrong in holding that the father cannot effect any
valid partial partition between himself and his minor sons of joint
family property
belonging
to
a Hindu
undivided
family
consisting of himself, bis wife and minor sons who are governed
by the Mitakaslira School of Hindu Law.
The other contention
raised is that the High Court erred in coming to the conclusion
that in the facts and circumstances of this case, the partial partitions were invalid.
Mr. Desai learned counsel appearing on behalf of the appellant
bas advanced the following arguments.
!. According to the Mitakshara School of Hindu Law, the
father has a power to divide ancestral property among his sons
and the partition made by him is binding on bis sons provided that
the power is exercised bonafide and in accordance with law which
regulates and restricts it in the interests of his sons. This power
on the part of the father is recognised in text books on Hindu
Law and has been accepted in a number of decisions beginning
with the case of Kandaswami v. Doraisami, Ayyar.(')
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2.
A father in any SU•ch case of ancestral property has the
power to separate frcm all or from even some of his sons remaining
joint with the other
sons or leaving them to continue as a
joint family with each other. The consent of the sons is not necessary for the exercise of that power whether they are majors or
minors. In this connection reference is made to para 323 of Hindu
Law by D.F. Mulla and para 458 at p. 559 of Mayne's Hindu Law
(lithe Edn.).
Para 323 of Mulla's Hindu Law, II th Edn. at page 443 and
444 reads as follows :-
"The father of a joint family bas the power to divide
the family property at any moment' during his life, provided he gives his sons equal shares with himself, and if
he does so, the effect in law is not only a separation of the
father from the sons, but a separation of the sons inter se.
The consent of the som1 is not necessary for the exercise
(I) 1.L.R. (1880) 2 Mad. 317,
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APOOilVA SHANnLAL v. C.I.T. (A.N. Sen, J.)
501
of that power. But a grandfather has no pow.er to bring
about a separaration among the grandsons. ' The right
of a father to sever sons inter se is a part of the patria
potestas still recognised by the Hindu Law."
Para 458 of Mayne's Hindu Law and Usage, 11th Edn. at
p.559 and 560 reads as follows :-
"Partition may be either total or partial. A partition
may be partial either as regards the persons making it or
the property divided .
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. It is open to the members of a joint family to sever
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in interest in respect of a part of the joint estate while
retaining their status of a joint family and holding the rest
as the properties of an undivided family.
Any one coparcener may separate from the others, but
no coparcener except the father or grandfathers, can compel the others to become separate amongst themselves. A
father may separate from all or from some of bis sons,
remaining joint with the other sons or leaving them to
continue a joint family with each other. A separation
between coparceners, for instance, between two brothers,
does neither necessarily nor even ordinarily involve a
separation between either of the coparceners and his own
sons."
3. So extensive and wide is this patriarchal power of the
father that it bas been recognised even in cases where all the sons
were minors or an only son was a lunatic. Reference is made to
the decision of the Bombay High Court in the case of Bapu
Hambira Patil v. Shankar Bhau Patil,(') and to the decision of the
Madras High Court in the case of Venkataswara Pattar v. K.
Mankayammal.(')
4. S. 171 of the Income-tax Act, 1971 and S. 25A of the earlier
Act have been . all along accepted as machinery provisions and not
charging sections. In the earlier Act though there was no express
reference to partial partitions, the preferable view experessed in deci·
(1) A.J.R. 1!126 Born. 160.
(2) A.l.R. 1933 Mad. 775,
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sions under that Act was that if there was a partial partition of an
asset of the family or an asset of the family was divided and a
partnership was constituted and the family continued joint as regards
other properties, the assessment on the basis of undivided Hindu
family would be confined to the income of the properties so remaining undivided and the income of the property partitioned would be
excluded from the computation of the income for assessment. It
was only income received from the properties not partitioned that
would be considered to be the income of the joint family. Reliance
has been placed on the decision iu the case of Charandas Haridas v.
C.I.T. Bombay. (1)
5. This power of the father has been described as bis "superior
power" or "peculiar power'\ or "patria potestas". There is neither
principle nor authority for the proposition that the exercise of this
independent and extensive powc:r of the father even in the context
of minor sons could not take into its purview the lesser power to
partition only some of the family properties without disrupting
the status of the members of the joint family as regards other properties even when it is a genuine exercise of the lesser power. At
no time was· there recognised any limitation or inhibition on the
power of the father, though of course the partition effected by
him had to be fair and equitable. There is no text of Hindu Law
which prohibits partial partition whether as to person or as to
property.
6.
The decision of the Privy Council in the case of Appovier
v.· Ram Subba Aiyan,(') when it speaks of partial partition of the
joint family by agreement of tbc coparcener cannot possibly be read
as restricting the patriarchal and superior power of the father to
effect division of the entire joint family properties and to exclude
operation in case of exercise of the lesser right of division of only
some of the family properties.
Mr. Manchanda learned counsel appearing on behalf of the
department, bas advanced the following arguments :
(!) [1960] 39 I. T.R. 202.
(2) [1866] 11 M.I A. 7,,
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APOORVA SHANTILAL 1•. c.I.T. (A.N. Sen, 1.)
503
I. Under ancient Hindu Law, partial partition was unknown.
Severence of status disrupted the family. The joint family foeed not
necessarily have any property. If it has property, then its separation is only an incidence of the severence of status.
2. Partial partition is judge-made law and the earliest case
where this was mooted was in 1846 in the case of Rewun Prashad v.
Radha Beeby.(1)
This was followed in Appovier's case (supra) and
then in certain decisions of Indian Courts.
Reference is also made
to paragraph 458 of Mayne's Book on Hindu Law and Usage for
contending that agreement between the parties is a sine qua non.
3. The powers of patria potestas are confined mainly to
the power to sever the status of the joint family as a whole.
Judge· made
law
which has recognised partial partition has
attempted to extend the ancient,
feudal
archaic
patriarchal
powers ·of patria potestas to joint families so as to include
the power of partial partition with the consent of the parties.
There could be no justification for now extending it, particularly as
the legislature itself, as per the Finance Act (2) 1980 w.e.f. 1,4.80
has de-recognised partial partition altogether. Sub-section· (9) has
been added to S. 171 of the Act and by this provision partial partition of a HUF effected after 31.12.78 will be de-recognised for
income-tax purposes and this sub-section bas been incorporated
with the object of curbing the creation of multiple HUF by making
partial partitions.
Where a HUF is taxed in the status of HUF it
will continue to be taxed as such unless there has been a total partition of the family properties by metes and bounds and an order to
that effect is recorded by I.T.O.
4.
The powers of patria potestas of a father have always been
understood to be restricted and limited to a complete and whole
partition. This power can only be exercised with regard to the
entire property, provided the property is divided equally and fairly
by the father.
We may observe that in course of the hearing, reference
was made to a number of decisions of various courts by the
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(2) (1846] 4 M.J.A. 137@ 165.
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We shall now proceed to consider the decisions which appear to
us to have a material bearing on the question involved in the appeal.
We shall first refer to the decision of this Court in the case of
Charandas
Haridas
(supra).
This
decision which appears to
have
clear bearing on the question and which considers an
earlier decision of the Privy Council, does not appear to have been
cited before the High Court. The material facts of this case may be
briefly noted ;-
Charandas Haridas WllS the Karta of a Hindu undivided fall!ilY
consisting of his wife, Shantabcm, three sons and himself.
He was a
partner in six managing agcmcy firms in six mills. In previous years
the income received by him as partner in these Managing Agencies
was being assessed as the inc:ome of the Hindu undivided family. On
December JI, 1945, CharandaLS Haridas acting for bis three minor
sons and himself and Shantaben bis wife, entered into an oral
agreement for partial partition. By that agreement
Cbarandas
Haridas gave one pie share to bis daughter Pratibba in the managing agency commission from two of the six managing agencies held
by the family. The balance' together with the other shares in the
other managing agencies was divided in five equal shares between
Charandas Haridas, bis wife and sons. This agreement was to
come into effect from !st January, 1946 which was the beginning
of a fresh accounting year. On I Ith September, 1946 Cbarandas
Haridas acting for himself and bis minor sons and Shantaben
executed a memorandum of partial partition in which the above
facts were recited, the document purporting to be a record of what
bad taken place orally earlier. In the assessment year 1947.4g and
1948-49, Cbarandas Harida.s <olaimed that the income should no
longer be treated as income of Hindu undivided family but as
separate income of the divided members. The Income-tax Officer declined to treat the income as any but of the Hindu undivided family,
and assessed the income as before.
An appeal to the Appellate
Assistant Commissioner was unsuccessful and the matter was taken
to the Income-tax Appellate Tribunal. The Tribunal held that by
the document in question, the di vision, if any, was of the income and
not of the assets from which the income was derived inasmuch as
"the agreements of the managing agency with the managed companies did not undergo any change whatever as a result of the alleged
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partition." The Tribunal, ther·efore, held that the arrangement to
share the receipts from this source of income was not binding on
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APOORVA SHANTILAL v. C.l.T. (A.N. Sen, J.)
505
the department, if.the assets themselves continued to remain joint.
It further held that the document was "a farce", and did not save
the family from a•sessment as Hindu undivided family.
The
following question as directed by the High Court on the application
of Charandas Haridas was referred to the High Court :
"Whether there were materials to justify the finding
of the Tribunal that the income in the share of the commission agency of the mills was the income of the Hindu
undivided family ?"
The High Court held that though the finding given by the
Appellate Tribunal could not be construed as a finding that the
document was not genuine, the method adopted by the family to
partition the assets was insufficient to bring about the results intended by it. According to the High Court the Tribunal was right in
holding ·that the document was ineffective and though the income
might have been purporte.d to be divided and might, in fact, have
been so divided, the source of income still remained undivided as
belonging to the Hindu undivided family. The High Court accordingly answered the question in the affirmative holding that there
were materials before the Tribunal to enable the Tribunal to reach the
conclusion that in so far as these income-bearing a ssets were concerned, they still belonged to the Hindu undivided family. The assessee
Cbarandas Haridas filed an appeal in this Court with special leave
granted by this Court. This Court allowed the appeal.
At page
207, this Court referred to the following observations of the Privy
Council in Apoovier v. Rama Subba Aiyan (supra).
"Nothing can express mere definitely a conversion of
the tenancy, and with that conversion a change of the
status of the family quoad this property. '{he produce is
no longer to be brought to the common chest, as representing the income of an undivided property, but the
proceeds are to be enjoyed in six distinct equal shares by
the members of the family, who are thenceforth to become
entitled to those definite shares."
Thereafter this Court proceeded to hold at page 208 :-
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SUPREMB COURT RBPOl!.T~
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"In our opinion, h"re there are three different branches
of law to notice. There iis the law of partnership, which
takes no account of Hindu undivided. family.
There is
also the Hindu Law which permits a partition of the family
and also a partial partition binding upon the family.
There is then the income-tax law, under which a particular
income may be treated as the income of the Hindu undivided family or as the income of the separated members
enjoying separate shares by partition. The fact ofa partition in the Hindu Law· may have no effect upon the position of partner, in so far as the law of partnership is
concerned, but it has full effect upon the family in so far
as the Hindu Law is concerned. Just as the fact of a karta
becoming a partner does not introduce the member of
the undivided family into the partnership, the division of
the family does not change the position of the partner
vis-a-vis the other partner or partuers. The Income-tax law
before the partition takes note, factually, of the position
of the karta, and assess1!e
not him qua partner but as
representing the Hindu undivided family.
In doing so, the
Income-tax law looks not to the provisions of the Partnership Act, but to the provisions of Hindu Law.
When
once the family has
disrupted, the position under the
partnership continues as before, but the position under
the Hindu Law changes. There is then no Hindu undivided
family as a unit of assessment in point of fact, and the
income which accrues cannot be said to be or a Hindu
undivided family. There is nothing in the Indian Incom-tax
law or the law of partnership which prevents the members
of a Hindu joint family from dividing any asset. Such
division must, of course, be effective so as to bind the
members; but Hindu law does not further require that
property must in every case be partitioned by metes and
bounds, if separate enjoyment can otherwise be secured
according to the shares of the members. For an asset of
this kind, there was no other mode of partition open to the
parties if they wished to retain the property and yet held
it not jointly but in severalty, and the law does contemplate that a person should do the impossible.
Indeed, the
result would have been the same, even if the dividing members had said in so many words that they had partitioned
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APOORVA SHANTILAL v. C.l.T. (A.N. Sen, J.)
507
the assets, because in so far as the firms were concerned.
the step would have been wholly inconsequential."
This Court further observed at p. 209 :-
"No doubt, there were many modes of pariition which
might have been adopted; but the question remains that
if the family desired to partition these assets only and
no more, could they have acted in some other manner to
achieve the same result? No answer to the question was
attempted. It is, therefore, manifest that the family took
the fullest measure possible for dividing the joint interest
into separate interests. There is no suggestion here that
this division was a mere pretence nor hao the Appellate
Tribunal given such a finding.
The docur....ent was fully
effective between the members of the famil:', and there was
actually no Hindu undivided family in respect of tnese
particular assets."
In the case of Kal/oomal Tapeswari Prasad (HUF) v. Commi!Jsioner of Income-tax, Kanpur('), this Court observed at p. 702 :-
"Under Hindu Law partition may be either total· or
partial. A partial partition may be as regards persons
who are members of the family or as regards properties
which belong to it. Where there !Jas been a partition, it
is presumed that it was total one both as to the parties
and
property
but when there is a part:tion between
brothers, there :s no presumption that 'there has been partition between one of them and his descendents. It is,
however, open to a party who alleges that the partition
has been partial either as to persons or as to property,
to establish it. The decision on that question depends on
proof of what the parties intended-whether they intended
the partition to be partial either as to persons or as to properties or as to both. When there is partial partition as to
property, the family ceases to be undivided as regards
properties in respect of which such partition has taken
place but continues to be undivided with regard to the
\J) [1982] 133 I.T.R,. 690,
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SUPREMJB COURT REPORTS
[198312 s.c.a.
remaining family property.
After such partial partition the
righfof inheritance and alienation differ according as to
property in question belongs to the members in their divided or undivided capacity. Partition can be brought about,
(I) by a father during his life time between himself and bis
sons by dividing equally amongst them, (2) by agreement,
or (3) by a suit or arbitration."
These two decisions of this Court clearly state that partial
partition under Hindu Law is permissible.
We may mention that in the case of Moti Lal Shyam Sunder
v. Commissioner of bzcom.,-tax, U.P.(1) a division Bench of the
Allahabad High Court also recognised the validity of partial
partition. R .S. Pathak, J. (as bis Lordship then was) who spoke
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for the Bench held for reasons stated in the judgment that the
tribunal was in error in holding that there was no valid partial
partition in law on !st July, 1961.
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It may be noted that in the case of Charandas Haridas (supra)
decided by this Court and in the case of Mori/al Sham Sunder (supra)
decided by the Allahabad High Court to which we have just referred, all the sons were minor.
We have earlier quoted the relevant passages on the subject
from Mulla's Hindu Law and from Mayne's Hindu Law and
Usage. We may now qoute the following observations apppearing
at p. 18 in 'Mitacshare and Daya-Bhaga-Two Treatises on the
Hindu Law of Inheritance translated by H.T. Colebrooke, Bsq.,'
in Ch. I, sec. II (2) :-
"When a father wishes to make a parti!ion, he may
at
his pleasure
separate bis children from
himself,
whether one, two or more sons".
In . 'History of Dharmashastra' by Sbri P.V. Kane (second
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Edition, 1973) Vol. III at p. :592, it bas been stated:-
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"The Manager is called Karla in modern times
though the smritis and digests employ words like Kutumbin
(Yaj II. 45), Grhin, Grhapali, Prabhupa Kat. 543) and not
Karta. He has special powers of disposition (by mortgage,
(1) [1972] 84 I.T.R. 186.
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APOORVA SHANTILAL ¥. C.l.T. (A.N. Sen, J.)
509
sale ot gift) of family property' in a season of distress (for
debts), for the purposes and benefit of the family (maintenance, education and marriages of members and other
dependents) and particularly for religious purposes (Sradhas
and the like). The father has the same powers as manager
and certain other special powers, which no other coparcener
has. The father can separate his sons from himself and also
among themselves if he so desires, even if they do not desire ·
to separate (Yaj. II. 114)".
There are observations more or less to the similar effect in the
other commentaries on Hindu Law by other learned authors.
We
do not, therefore, .