# NARENDRAKUMARJ.MODI v. COMMISSIONER OF INCOME TAX, GUJARAT II, AHMED ABAD

- **Citation:** [1977] 1 S.C.R. 112
- **Court:** Supreme Court of India
- **Decided:** 1976-08-04
- **Case number:** Civil Appeal No. 156 of 1971
- **Bench:** H. R. Khanna, V. R. Krishna Iyer, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/narendrakumarj-modi-v-commissioner-of-income-tax-gujarat-ii-ahmed-abad-6893
- **Pages:** 6

## Headnote

Income Tax A ct. 1922-Section 25-A (3 )-Claims for partition and disruption of the Hindu Undivided Family disallowed by /.T.0.-Appeal under ther
Act filed againsl the orders of I.T.O. also dismissed-No referorce 1111der the Act
clzal/e11gi11g the Tribu11c./'s order di.lmissinl!' the appeal was taken, but .rnbse•
que111ly got a preliminary decree for partition, passed by the civil court duri11g
the pe11dc11cy of the appeal-Whether the Income Tax Awhorities are bou11d by
C
Liie s1d>.,eq11.c111 partition decree of the civil court.
D
E
F
G
H
Right of ma11agement-Hi11du Law-Joi11t
Hindu
U11divided
Whether a juliior member of the family can act m a karta ivit/1 tf1,,
all the other members, if the senior member gives up his riplzt.
Fami/yco11se11t of
Bapalal Purshottamdas Modi was the karta and head of a Hindu Undivided
Family posse,sing many immovable properties and carrying on. business of
various types including money lending.
Bapalal had five sons, viz. Vadilal
Ramanlal, Jayantilal, Gulabchand and Kanti!al; out of whom Ramanlal and
Jayantilal predeceased him in 1933 and 1956 respectivelv and the
app·~llant
was one of the sons of Jayantilal.
As per the general power of attorney dated
5.10-1948, executed by Bapalal in his favour, Gulabchand, the third son was
acii'ng as a karta and wa~ filin0 the various tax returns without any objection
what;oever by the other members of the Hindu Undivided Family.
Bapalal
relinquished all his rights in the joint family property on 22-lG-54 1~.aving the
corpus of the joint family properties to his four surviving sons and Rajnikant,
son of Ramanlal.
All of them executed on 24-10-54, a memo of partition
disrupting the Hindu Undivided Family and partitioning
the
properties. Irr
the course of the proceeding' of' the income-tax af.sessment for the assessment
year 1955-56 against the H.U.F. of Bapalal Purshottamlal Modi, an applicatioh under s. 25A of the Income Tax. Act, 1922 claiming partition was made.
The claim was disallowed by the I.T.O. by his order dat•ed 28-1-1960.
Dur'ng
the pendency of the appeal, a suit for partition was filed in 1961 and a decree
for partition was obtained on June 30, 1965. The appeal to the Appellate
Assistant Commissioner wa' dismissed on September 30, 1965 and the second
appeal 10 the Income Tax Appellate Tribunal was also dismissed on March.
28. 1969. The appellants d'd not ask for a reference to the High Court, as
provided under the Act, but went on filing the returns in respect of the·
subs·equent assessment years.
When the Income Tax Officer got attach·d 1h'
entire amount i'n the Savings Bank A/c towards the tax liability bv an order
dated May 12. 1970, the appellant filed a writ P'dition challenQ!ing the various
orders passed in the proceedings under s. 25A for the assessment years 195$.66
to 1965-66 and the several attachment orders.
Th·~ High Court dic1m'ssed the
writ in /i111i11e, but granted a certificate under Art. 133(1)(b) of the Co'nstitu"
ti on.
Dismissing the appeal, the Court,
HELD: (l) Sub section (3) of s. 25A provides that where an order accept·
ing partition had not been passed in respect of a H'ndu Undivided Family assessed a<; undivided, such familv shall be deemed for the purpos-es of the Act to
continue to be Hindu Undivided Family.
The Income Tax Officers who had
their own view to take, were not bound by the d1ecree, since in the instant case
ihe partit'on preliminary decree came much later and there, wa~ no rPference
under the Income Tax Act challenging the order of the Tribunal.
[116 C-DJ
(2) A junior member of the family can, with the consent of all the other
members, act as a karta, if the senior' member give~ up his right. [116 El
NARENDRA v. COMMR. INCOME TAX (Untwalia, .f.)
113

## Text

A
B
112
NARENDRAKUMARJ.MODI
v.
COMMISSIONER OF INCOME TAX, GUJARAT II,
AHMED ABAD
August 4, 1976
[H. R. KHANNA, V. R. KRISHNA IYER AND N. L. UNTWALIA, JJ.j
Income Tax A ct. 1922-Section 25-A (3 )-Claims for partition and disruption of the Hindu Undivided Family disallowed by /.T.0.-Appeal under ther
Act filed againsl the orders of I.T.O. also dismissed-No referorce 1111der the Act
clzal/e11gi11g the Tribu11c./'s order di.lmissinl!' the appeal was taken, but .rnbse•
que111ly got a preliminary decree for partition, passed by the civil court duri11g
the pe11dc11cy of the appeal-Whether the Income Tax Awhorities are bou11d by
C
Liie s1d>.,eq11.c111 partition decree of the civil court.
D
E
F
G
H
Right of ma11agement-Hi11du Law-Joi11t
Hindu
U11divided
Whether a juliior member of the family can act m a karta ivit/1 tf1,,
all the other members, if the senior member gives up his riplzt.
Fami/yco11se11t of
Bapalal Purshottamdas Modi was the karta and head of a Hindu Undivided
Family posse,sing many immovable properties and carrying on. business of
various types including money lending.
Bapalal had five sons, viz. Vadilal
Ramanlal, Jayantilal, Gulabchand and Kanti!al; out of whom Ramanlal and
Jayantilal predeceased him in 1933 and 1956 respectivelv and the
app·~llant
was one of the sons of Jayantilal.
As per the general power of attorney dated
5.10-1948, executed by Bapalal in his favour, Gulabchand, the third son was
acii'ng as a karta and wa~ filin0 the various tax returns without any objection
what;oever by the other members of the Hindu Undivided Family.
Bapalal
relinquished all his rights in the joint family property on 22-lG-54 1~.aving the
corpus of the joint family properties to his four surviving sons and Rajnikant,
son of Ramanlal.
All of them executed on 24-10-54, a memo of partition
disrupting the Hindu Undivided Family and partitioning
the
properties. Irr
the course of the proceeding' of' the income-tax af.sessment for the assessment
year 1955-56 against the H.U.F. of Bapalal Purshottamlal Modi, an applicatioh under s. 25A of the Income Tax. Act, 1922 claiming partition was made.
The claim was disallowed by the I.T.O. by his order dat•ed 28-1-1960.
Dur'ng
the pendency of the appeal, a suit for partition was filed in 1961 and a decree
for partition was obtained on June 30, 1965. The appeal to the Appellate
Assistant Commissioner wa' dismissed on September 30, 1965 and the second
appeal 10 the Income Tax Appellate Tribunal was also dismissed on March.
28. 1969. The appellants d'd not ask for a reference to the High Court, as
provided under the Act, but went on filing the returns in respect of the·
subs·equent assessment years.
When the Income Tax Officer got attach·d 1h'
entire amount i'n the Savings Bank A/c towards the tax liability bv an order
dated May 12. 1970, the appellant filed a writ P'dition challenQ!ing the various
orders passed in the proceedings under s. 25A for the assessment years 195$.66
to 1965-66 and the several attachment orders.
Th·~ High Court dic1m'ssed the
writ in /i111i11e, but granted a certificate under Art. 133(1)(b) of the Co'nstitu"
ti on.
Dismissing the appeal, the Court,
HELD: (l) Sub section (3) of s. 25A provides that where an order accept·
ing partition had not been passed in respect of a H'ndu Undivided Family assessed a<; undivided, such familv shall be deemed for the purpos-es of the Act to
continue to be Hindu Undivided Family.
The Income Tax Officers who had
their own view to take, were not bound by the d1ecree, since in the instant case
ihe partit'on preliminary decree came much later and there, wa~ no rPference
under the Income Tax Act challenging the order of the Tribunal.
[116 C-DJ
(2) A junior member of the family can, with the consent of all the other
members, act as a karta, if the senior' member give~ up his right. [116 El
NARENDRA v. COMMR. INCOME TAX (Untwalia, .f.)
113
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 156 of 1971.
From the Judgment and Order dated 19-10-1970 of the Gujarat
High Court in Special Civil Appln. No. 1177 /70.
B. R. L. Iyengar, S. K. Dholakia and R. C. Bhatia, for the
appe!lant.
B. B. Ahuja, for respondent No. 1.
The Judgment of the Court was delivered by
UNTWALIA, J.
The appellant's writ petition filed in the High
Court of Gujarat was dismissed in limine by a Bench of the High
Court on October 19, 1970.
The Commissioner
of Income
tax,
Gujarat II, respondent no. 1 was the authority against whom several
reliefs had been claimed in the writ petition.
Subsequently were added
the other members of the family of the appellant as respondents to
the writ petition.
The appellant obtained a certified from the High
Court for appeal to this Court under sub-clause (b) of clau:;e (1) of
Article 133 of the Constitution of India as it stood before the 30th
Constitution Amendment Act.
Hence this appeal to this Court.
Having beard Mr. B. R. L. Iyengar, Senior Advocate for the appellant at some length we found that the appellant was ill-advised to file
the writ petition and to pursue the matter upto this Court.
The appeal
being devoid of any substance must fail.
We proceed to state the
facts and discuss the points urged before us very briefly.
.
One Bapalal Purshottamdas Modi was the head of a Hindu Undivided family.
The joint family possessed many immovable properties and carried on business of various types such as money-lending
etc.
Bapalal had five sons namely Vadila·l,
Ramanlal,
Jayantilal,
Gulabchand and Kantilal.
Ramanlal died long ago in or about the
year 1933.
Jayantilal died in 1956.
The appellant is one of the sons
of Jayantilal.
.
The appellant's case in the writ petition was that Bapalal was the
karta of the Hindu Undivided family.
He executed a general power
of attorney on October 5, 1948 in favour of his third son Gulabchand
to manage his (Bapalal's) separate property.
On October 22, 1954
Bapalal relinquished his right, title and interest in the joint family properties on taking a sum of Rs. 75,000/-
leaving the corpus and
management of the joint family properties to his four surviving sons and
Rajnikant, son of late Ramanlal.
These five members also executed
a memo of partition on October 24, 1954 disrupting the erstwhile
Hindu Undivided family and partitioning the properties.
In course of the proceedings for assessment of the income-tax for
the assessment year 1955-56 against the Hindu Undivided family of
Bapalal Pursbottamlal Modi, an application under Section 25A
of
the Income-tax Act, 1922 was made claiming partition w.e.f. October
24, 1954.
Notices of the enquiry under section 25A were served on
all the members of the family.
At the enquiry the statements of
various persons including the appellant were recorded by the Incometax Officer.
He, by his order, dated January 28, 1960 disallowed the
B.
c
D
E
F
G
H
.B
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lE
IF
H
I 14
SUPREME COURT REPORTS
(1977] 1 S.C.R.
claim under section 25A of the Income-tax Act, 1922. It is asserted
that in the year 1961 a suit for partition had also been filed and the
City Civil Court Ahmedabad passed a decree for partition on June 30,
1965.
In an appeal filed before the Appellate Assistant Commissioner
from the order of the Income-tax Officer dated January 28, 1960
reliance was placed on the Civil Court partition decree also.
The
Appellate Assistant Commissioner, however, dismissed the appeal by·
his order dated September 30, 1965: . A second appeal to the Incometax Appellate Tribunal was dismissed on March 28, 1969.
Incometax assessment was made against the Hindu Undivided family for the
year 1955-56.
Assessments were also made against the Hindu Undivided family, sometimes treating it as Association of Persons or Unregistered .Partnership Firm as per returns filed from time to time, for
the subsequent years upto the assessment year 1965-66.
Copies of
all the assessment orders were enclosed with the writ petition as
Anncxurc 'I' collectively.
Appeals taken to the Tribunal from some
of the assessment orders were also dismissed.
Notices were being
issued and served under sections 22 and 23 of the Income tax Act,
1922 for the assessment years which were governed by the said Act:
In respect qf the assessment years 1962-63 onwards
notices
were
issued and served under sections 142 and 143 of the Income tax Act,
1961:
A large sulm of tax and penalty became due as the demands
from time to time were partly paid.
The Income-tax authorities took
steps for realization of the income tax dues against the
appellant's
family and got attached various properties.
In Civil Suit No. 806
of 1961 in which the preliminary partition decree was passed on
June 30, 1965, respondent Kantilal had been appointed as a receiver
Later on one Mr. Bhatt was appointed Receiver.
A Savings Bank
Account No. 412002 was being operated
by the
Receiver.
The
Income-tax Officer attached the entire amount of Rs. 56,294.43
in
the said account by his orders dated May 12, 1970. Thereupl)n, the
appellant filed -the writ petition challenging the various orders passed
in the proceeding under section 25A of the Income tax Act, 1922;
the assessments made for the years 1955-56 to 1965-66 and the
attachment orders qn various grounds. In a:
single writ petition
rambling allegations were made challenging the multifarious proceedings and the orders on various grounds and the following
prayers
were made :
" (a) declaring void and illegal and quashing the proceedings of the income tax authorities making assessments
on Hindu Undivided Family, Association of persons
and unregistered partnership firm aforesaid for the
years beginning from the assessment year 1955-56
and also the proceedings for the recovery of the taxes
so assessed, and
(b) quashing the orders of the income-tax Authorities refusing to record partition and directing the Respondent and his Subordinates to record under Section
25A of the Act that the erstwhile joint family property bas been divided or .Partitioned in definite portions, each member getting an
equal
share,
on
October, 1954;
..
}-
NARENDRA v. COMMR. INCOME TAX (Untwalia, J.)
115
( c) directing the respondent and his
subordinates
to
cancel or withdraw the imgugned orders and all steps
taken for tho recovery of. the amounts so assessed;
( d) directing the respondent and his subordinates. not to
take any further steps for the recovery of the tax so
assessed;
( e) quashing all the penalty orders and such other orders
passed in pursuance of the assessment proceedings
aforesaid;
(f) quashing an the orders of attachment or in the nature
of attachment passed by the Income tax Authorities
in these proceedings for the assessment year 1955-56
onwards, and
· ( g) to pass such other and further orders as your Lordships deem just and expedient in the circumstances of
the case."
A
B
c
It seems to us that the High Court rightly dismissed the appellant's
petition in limine.
Since the ·valuation under Article 133 ( 1 )(b) was
beyond Rs. 20,000/-, the appellant was granted a certificate as a
D
matter of course.
It was pointed out to the appellant's counsel that so many proceedings and orders could not be challenged in one writ petition and
he was asked to make his submissions in the appeal confining the
writ .petition to one matter only.
Counsel chose to confine it to the
attack on the attachment order 0£ the Income tax Officer in respect
of the money lying in the Savings Bank Account.
While doing so,
he traversed the entire a/legations in the petition by adopting an ingenious method.
Counsel submitted that the attachment had been made
for realization of the income tax dues based upon various orders which
were void and ultra vires.. All those orders could be attacked collaterally while attacking the attachment order.
Mr. Iyengar urged the following points in, support of the appeal.
( 1) That the orders of the various au!.horities rejecting the
claim of the partition under section 25A
of the
Income tax Act, 1922 were without jurisdiction and
on their face suffered from many infirmities of law.
(2) That after Bapalal relinquished his interest in
the
.ioint family properties and ceased to be the karta,
there was no karta of the family.
Gulabchand-a
junior member of the family could not act as a karta.
Other members of the family did not accept him to be
the karta.
E
F
G
(3) That eveo after the death of Bapalal in thel year 1958
various notices under the Income tax Act were issuH
ed and served in the name of Bapalal Purshottamdas !Modi-a dead person-and hence the entire proceedings and assessment orders were nullities.
A
B
c
D
E
F
G
H
116
SUPREME COURT REPORTS
[1977) 1 s.c.R.
( 4) That the appellant had no opportunity of taking any
part in the income tax proceedings and his property
cannot be made liable for realization of the dues determined in such proceedings.
None of the points urged on behalf of the appellant merits any
detailed discussion.
We were taken through the power of attorney
executed by Bapalal in favour of Gulabchand, the deed of relinquishment executed by him on October 22, 1954 and the alleged memoran~
dum of partition of October 24, 1954; the orders of the Income tax
officer, the Appellate Commissioner and the Tribunal in the proceedings under section 25A of the Income tax Act, 1922. In our opinion
the orders do not suffer from any infirmity of law or any such defect
which will make them void. Notice of the enquiry had been given t<>
all the members as admitted by the appellant himself. He had been
examined in the proceedings.
Sub-section (3) of Section 25A provides.
that where an order accepting partition had not been passed in respect
of a Hindu family assessed as undivided such family shall be deemed
for the purposes of the Act to continue to be Hindu undivide family.
A partition preliminary decree came much later. The income tax authorities had their own view to take. They were not bound by the decree.
No reference was taken un.der the income tax Act·challenging the order
of the Tribunal dismissing the appeal.
It was clear from some of the assessment orders that Gulabchand
was acting as a karta even during the life time of Bapalal as he had
retired to live in Brindaban. At the relevant time no body disputed his
authority to act as karta. His eldest brother Vadilal was an old man
of about 70 years of age.
His elder brother Jayantilal-father of the
appellant died in the year 1956.
In these circumstances he appears
to have acted as thee karta with consent of all the other members. A
junior member of the family could do so.
See Mulla's Hindu Law
page 296, fourteenth edn.
Where occurs the following passage :
"So long as the members of a family remaiin undivided,
the senior member of the family is entitled to manage the
family properties," including even charitable properties (q);
and is presumed to be the manager until the contrary is
shown(r). But the senior member may give up his right of
management, and a junior member may be appointed
manager(s)."
Notices were being issued in the name of the family which was carrying on the business in the assumed name of Bapalal Purshottamdas
l\Jodi. They were neither issued to nor served on BapaJ,al-the dead
person. In response to the notices returns were being filed by the managing member of the family. At nd stage before the income tax authorities a contention was raised that the notice was served on a dead
person.
There is no substance in the third point.
Coming to the
fourth and the last point urged on behalf of the appellant we find that
the appellant is bound by the assessment made in respect of the income
of his family which continued in the eye of law to be joint. The share
•
•
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NARENDRA v. COMMR. INCOME TAX ( Vntwalia, !.)
11 7
-Of the appellant's properties received by him from the joint family or
A
the income thereof is liable for the income tax dues in question. The
.appellant, as we have said above, was ill-adv:sed to file a misconceived
petition on wholly untenable grounds.
In the result the appeal fails and is dismissed with costs to respondent no. 1.
S.R.
Appeal dismissed .
B