Judgment 1. This is a reference under Sec. 66(1) of the Income-tax Act. The question referred is "whether in the facts and circumstances of the case, the clubbing of the income of Shrimati Mohanvati Mehra in the hands of her husband was valid in law?". The facts of the case are not in dispute and may be briefly narrated. 2. H.C. Mehra, the assessee, and his son, Davindra Mehra, along with others, were partners in the firm called M/s. D. V. Varinder. On the death of Davindra Mehra, unmarried and intestate, on the 2nd May, 1956, his mother, Shrimati Mohanvati Mehra, and wife of the assessee, succeeded to her sons interest in the partnership and, the partnership deed providing for the continuation of the firm without dissolution on the death of any one of the partners, she became a partner in the firm in which her husband was one of the partners. During the accounting period ending with the 31st December, 1957, the share of the profit of the assessee in the said firm was determined at Rs. 32,116 only. The share of the profit of the assessees wife, namely, of Shrimati Mohanvati Mehra, in the said firm was computed at Rs. 21,194. The Income-tax Officer clubbed together the share of the profit of the assessee with that of the share of the profit of his wife in accordance with the provisions of Sec.16(3) (i) of the Income-tax Act (hereinafter referred to as "the Act") and computed the total taxable income of the assessee at Rs. 53,310 only and assessed him thereon accordingly. On appeal, the learned Appellate Assistant Commissioner agreed with the Income-tax Officer and held that, on the language of Sec.16(3) (a) (i) of the Act, the income received by the wife of the assessee from the aforesaid firm in which the assessee was himself a partner had rightly been included in computing the total income of the assessee for the purpose of assessment. The assessee, thereupon, took the matter in second appeal to the Income-tax Appellate Tribunal. The assessee, thereupon, took the matter in second appeal to the Income-tax Appellate Tribunal. Two points were urged on behalf of the assessee before the said Tribunal, viz., (i) that Sec.16(3) was repugnant to the provisions of the Hindu Succession Act, and (ii) that, in view of the fact that the wife of the assessee had stepped into the shoes of her deceased son by succeeding to his interest in the partnership had become a partner in her own right and the income in question was derived from the assets which belonged to her absolutely, the provisions of Sec.16(3) (a) (i) were not applicable to the facts of the present case. The Tribunal, however, rejected both these contentions and held that there was no ambiguity in the wordings of Sec.16(3) (a) (i) and that, in accordance with that section, the income of the wife, having directly arisen out of her membership in the firm in which her husband, namely, the assessee, was also a partner, had to be included in computing the total income of the assessee for the purpose of assessment. The assessee, thereupon, desired the Tribunal to refer to this Court the aforesaid two questions arising out of the order of the Tribunal. The Tribunal has, however, referred only one of the two questions as set out above and has declined to refer the question whether Sec.16(3) (a) (i) of the Act is ultra vires of the Hindu Succession Act. 3. It is quite clear that, in adopting the course which the Income-tax authorities have adopted in this case, they have relied on the express words of Sec.16(3) (a) (i) of the Act. That sub-section states that, in computing the total income of any individual for the purpose of assessment, so much of the income of a wife of such individual as arises directly or indirectly from the membership of the wife in a firm of which her husband is a partner, shall he included. All the ingredients of this sub-section are present in this case. The wife is a partner in the firm in which her husband is also a partner and the income earned by her directly arises out of her membership in the firm. All the ingredients of this sub-section are present in this case. The wife is a partner in the firm in which her husband is also a partner and the income earned by her directly arises out of her membership in the firm. Upon the ordinary and natural meaning of the words used in the sub-section in question, the inclusion of the wifes share of income from the firm in the assessment of the assessee appears to be quite valid in law and the question referred for our opinion has to be answered against the assessee. It has not been and could not be contended that there was any ambiguity in the words used in the sub-section in question. The first and perhaps the most elementary rule of construction is to adhere to the words of the statute and to give them their ordinary meaning and natural import and give full effect to the clear and unequivocal language used. When once the meaning is plain, it is not the province of a Court to scan the wisdom or the policy of the Legislature in enacting as it has done. Examining the parallel and similar provision in Sec.16(3) (a)(ii) which covers the case of minors admitted to the benefits of partnership of which the individual assessee was also a partner, Leach, C. J. delivering the judgment of the Court in Commissioner of Income-tax Madras V/s. Lakhmanier, AIR 1941 Mad 924 observed that it was "difficult to imagine words which would express the intention" of the Legislature "more clearly than the words used in this section. The above observations are clearly applicable to the provisions of Sec.16(3)(a)(i) as well. The Supreme Court in the case of Commissioner of Income-tax, Bombay V/s. Manilal Dhanji, 1962-44 ITR 876 at p. 881: (AIR 1983 SC 433 at p. 436), while dealing with Sec.16(3) of the Act, has made the following significant observations: "This sub-section aims at foiling an individuals attempt to avoid or reduce the incidence of tax by transferring his assets to his wife or minor child or admitting his wife as a partner or admitting his minor child to the benefits of a partnership in a firm in which such individual is a partner. The sub-section creates an artificial liability to tax and must be strictly construed." It follows, therefore, that, upon the wordings of this sub-section, the matter is concluded against the assessee. The sub-section creates an artificial liability to tax and must be strictly construed." It follows, therefore, that, upon the wordings of this sub-section, the matter is concluded against the assessee. It has, however, been strenuously contended on behalf of the assessee that a literal construction of the provisions of this sub-section would lead to a manifest contradiction of the purpose for enacting the same and, therefore, it is a fit case in which the Court must depart from the rule of literal construction and hold that when the Legislature has used the word "membership" it really meant mere membership, and not a membership of the genuine sort where the wife has made her independent contribution to the assets of the partnership, otherwise, it has been contended, it will amount to taxing the husband on the income derived by the wife from her independent resources. Elaborating this argument, it was pointed out that the fundamental conception behind the Income-tax law is to tax a person on his own income, and not on the income of someone else, and it was with a view to foil the attempt of a husband to evade him being taxed on what really was his own income, by making a part of it appear in the name of his wife, that this sub-section was enacted, but surely it was not intended by the Legislature to cover the case of a genuine partnership in which the wife was a partner in her own right, having contributed her own assets to the assets of the partnership. In the present case, for instance, it was pointed out that Shrimati Mohanvati Mehra having succeeded in her own right to the interest of her son in the partnership it was a case of deriving income from what was her independent asset and quite obviously it was not a case in which she was a mere nominee of her husband. However plausible this argument might appear to be, we are afraid, it cannot be upheld both on principle as well as on authority. As has been observed in the passage which has been quoted from 1962-44 ITR 876 (881): ( AIR 1963 SC 433 (436)), Sub-section (3) of Sec.16 of the Act creates an artificial liability to tax. However plausible this argument might appear to be, we are afraid, it cannot be upheld both on principle as well as on authority. As has been observed in the passage which has been quoted from 1962-44 ITR 876 (881): ( AIR 1963 SC 433 (436)), Sub-section (3) of Sec.16 of the Act creates an artificial liability to tax. The income continues to be that of the wife; but for the purposes of assessment, the law creates an artificial liability on the husband in so far as the wifes income has to be clubbed with the income of the husband derived respectively from the partnership. In the Madras case referred to above, AIR 1941 Mad 924 (SB), it appears that similar arguments were advanced on behalf of the assessee, but they were repelled. For instance, it was argued that, as the minors in that case had antecedent rights and as no new right had been created or conferred by the father when" the family business had become a partnership business, it could not be said that the minors had been admitted to the benefits of the partnership and on those facts the applicability of Sec.16(3)(a)(ii) was challenged. This part of the submission was rejected on the ground that the partition of the family put an end to the joint status and the family properties had ceased to exist as family assets. It was further contended on behalf of the assessee that, as the minors were not admitted gratis into the firm, but owed their membership to the fact that they contributed their shares in the joint family property, Sec.16(3)(a)(ii) could have no application. This contention was negatived in the following words: "The suggestion is that unless the minors are admitted to the benefits of the partnership without any contribution to the assets, Sec.16(3) (a) (ii) has no application. This is really putting the first contention in another way. There is nothing in the section which justifies the Court in drawing a distinction between a case where a minors property is with a firm and the case where the minor is allocated a share without any contribution to the assets. The section can only be construed in accordance with the words used in it and there is no foundation for this argument in view of what the section says. The section can only be construed in accordance with the words used in it and there is no foundation for this argument in view of what the section says. We agree with the Commissioner that Sec.16(3)(a)(ii) has been rightly applied in this case and we answer the reference accordingly....." Apart from this Madras decision, it appears to us that this question is concluded by the observations of the Supreme Court in Balaji V/s. Income-tax Officer, Special Investigation Circle, Akola, 1961-43 ITR 393: (AIR 1862 SC 123). In that case, the constitutional validity of Sec.16(3) (a) (i) of the Act was raised by an application under Article 32 of the Constitution. While dealing with the challenge of legislative incompetency, it was held by the Supreme Court that Entry 54 in the Federal Legislative List of the Government of India Act, 1935 should be read not only as authorising the imposition of a tax but also as authorising an enactment which prevents the tax imposed being evaded. It was further held that the provisions of Sec.16(3) (a) (i) and (ii) were provisions made by the Legislature to prevent evasion of tax. Dealing with this matter, their Lordships observed as follows: "The short question, therefore, is whether Sec.16(3) (a) (i) and (ii) is a provision made by the Legislature to prevent evasion of tax. Under the relevant provision of the Income-tax Act, if a firm is registered, the share of each partner in the profit of the firm would be added to his other income and charged as part of his total income. ..... This provision was intended for the benefit of partners of a business, for it made them liable only to pay tax on their own income. But it gave an effective handle to evade taxation in another direction. A husband or a father could nominally take his wife or his minor sons in partnership with him so that the tax burden might be lightened, for, if the income was divided between a number of people, the Income derived by an individual therefrom might fall under the limits of taxable income or under a less onerous slab. This device enables an assessee to secure the entire income of the business but at the same time to evade income-tax which he would have otherwise been liable to pay. This device enables an assessee to secure the entire income of the business but at the same time to evade income-tax which he would have otherwise been liable to pay. The Income-tax Enquiry Commission of 1936 made certain recommendations to prevent evasion of tax in such cases. The Legislature accepted those recommendations and the loopholes were sought to be plugged by enacting the said subsection. Sub-section (3) (a) (i) and (ii) was, therefore, enacted for preventing evasion of tax and was well within the competence of the Federal Legislature." The next attack on the constitutional validily of the provision was on the ground that it violated the doctrine of equality before the law enshrined in Article 14 of the Constitution. While repelling this contention, their Lordships made the following significant observation: "It was then said that there might be genuine partnerships between an individual and his wife and, therefore, there is no reasonable relation between the classification and the object sought to be achieved, at any rate to the extent of those genuine cases. But there is no classification between genuine and non- genuine cases the classification is between cases of partnership between husband, wife and/or minor children, whether genuine or not, and partnership between others. In demarcating a group, the net was cast a little wider, but it was necessary, as any further sub-classification as genuine and non-genuine partnerships might defeat the purpose of the Act." (the underlining (here into ) is ours). 4 The last attack on the constitutional validity of this provision was on the ground that it infringed the rights conferred under Article 19(1)(f) and (g) of the Constitution. In that connection, it was argued on behalf of the Department that the provisions of Sec.16(3) (a)(i) and (ii) of the Act constituted reasonable restrictions on the exercise of the rights conferred under Article 19(1)(f) and (g) of the Constitution in the interest of the general public. This argument was accepted, and it appears that the precise question which is sought to be raised in the present case was argued in the case before the Supreme Court. But their Lordships finally came to the conclusion that the provisions of Sec.16(3) of the Act did not impose an unreasonable restriction on the fundamental right as enshrined in Article 19(1) (f) and (g) of the Constitution. But their Lordships finally came to the conclusion that the provisions of Sec.16(3) of the Act did not impose an unreasonable restriction on the fundamental right as enshrined in Article 19(1) (f) and (g) of the Constitution. It may be useful to set out the observations of their Lordships in this connection in extenso, because the very observations made, while dealing with the question of reasonableness or otherwise indicate quite clearly that, to their Lordships mind, no weight need be attached to the contention such as had been made in this case. They observed as follows: "Learned counsel for the petitioner argued that the restrictions are not reasonable for the following reasons (1) the husband is made to pay tax on the income which his wife derived from the business, that is, a tax is levied on one person on the income of another, (2) such an imposition not only prevents a husband from taking his wife as a partner in his business but also prevents a wife, who has got a business of her own, from taking her husband as a partner in the business; (3) the husband has to pay a tax at a rate higher than that he would have to pay if the income of the wife was not added to his income; (4) the same situation is created inter se between a parent and his minor children vis-a-vis their joint business. Learned counsel, therefore, contended that the provisions prevented the honest pooling of resources of the members of a family so intimately connected with each other to the detriment of the family prosperity and that it amounted to an unreasonable restriction on the said fundamental rights. There is some plausibility in this argument, but if an overall picture of the situation is taken, the reasonableness of the restrictions will be apparent. In State of Madras V/s. V. G. Row, (1952) SCR 597: ( AIR 1952 SC 196 ) Patanjali Sastri, C. J. lays down the following test of reasonableness: The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. So judged, can it be said that the restrictions imposed under the impugned provisions are not reasonable? So judged, can it be said that the restrictions imposed under the impugned provisions are not reasonable? The object sought to be achieved was to prevent the prevalent abuse, namely, evasion of tax by an individual doing business under a partnership nominally entered with his wife or minor children. The scope of the provisions is limited only to a few of the intimate members of a family who ordinarily are under the protection of the assessee and are dependants of him. The person selected by the provisions, namely, wife and minor children, cannot also be ordinarily expected to carry on their business independently with their own funds, when the husband or the father is alive and when they are under his protection. Doubtless some of the said partnerships may be genuine and the wife or minor children may have contributed capital to the business; but the provisions do not in any way affect their rights and even the liability inter se between the husband and the wife or the minor children, as the case may be, in respect of the tax paid. It is true that in computing the total income of an individual for the purpose of assessment, their income in their capacity as partners shall be included in the income of the individual; but the section does not prevent the husband or the father, as the case may be, from debiting against them in the partnership accounts that part of the tax referable to the share or shares of their income. It may be that a father or a husband may have to pay tax at a higher rate than ordinarily he would have to pay if the addition of the wifes or childrens income to his own brings his total income to a higher slab. But it may not necessarily be so in a case where the income of the former is not appreciable; even if it is appreciable, he can debit a part of the excess payment to his wife and children. In short, the firm, though registered, would be treated as a distinct unit of assessment, with the difference that, unlike in the case of a registered firm, the entire income of the unit is added to the personal income of the father or the husband, as the case may be. In short, the firm, though registered, would be treated as a distinct unit of assessment, with the difference that, unlike in the case of a registered firm, the entire income of the unit is added to the personal income of the father or the husband, as the case may be. This mode of taxation may be a little hard on a husband or a father in the case of genuine partnership with wife or minor children, but that is offset, to a large extent by the beneficent results that flow therefrom to the public, namely, the prevention of evasion of income-tax, and also by the fact that, by and large, the additional payment of tax made on the income of the wife or the minor children will ultimately be borne by them in the final accounting between them." (the underlining (here into . ) is ours). It is apparent from the observations made by their Lordships that the cases of genuine partnerships between a husband and a wife in which the wife may have made her independent contribution to the assets of the partnership were very much present and were actually dealt with. None the less, and despite the fact that their Lordships had held that the object behind the enactment of Section 16(3) was prevention of evasion of tax, their Lordships had no hesitation in coming to the conclusion that the provisions were fully constitutional. The decision in B. M. Amina Umma V/s. Income-tax Officer, Kozhikode, 1954-26 ITR 137: (AIR 1951 Mad 1120), which was a case of assessment upon clubbing together of the income derived from partnership by the mother and her three minor children under the provissions of Sec.16(3)(a)(ii) of the Act was approved by the Supreme Court in the case just referred to. 5 It follows from the above extracts and the discussions that it is well settled that the provisions of Sec.16(3) of the Act create an artificial liability to tax and that the provisions must be strictly and literally construed. 5 It follows from the above extracts and the discussions that it is well settled that the provisions of Sec.16(3) of the Act create an artificial liability to tax and that the provisions must be strictly and literally construed. On behalf of the assessee, our attention was drawn to certain cases where the meaning of certain words as used in the statute was held to be liable to be enlarged in view of certain circumstances viz., Mineral Development Ltd. v. The Union of India, AIR 1954 Pat 340 at p. 343 and In Re The Hindu Womens Rights to Property Act, 1937 and the Hindu Womens Rights to Property (Amendment) Act 1938 and In re A Special Reference under Sec.213 of the Government of India Act, 1935, 1941 FCR 12: (AIR 1941 FC 72). In view, however, of the rule laid down by the Supreme Court in the case reported in 1962-44 ITR 876 (881): ( AIR 1963 SC 433 (436) ) and 1961-43 ITR 393: ( AIR 1962 SC 123 ), we have no hesitation in holding that none of these cases have any application to the facts of the present case. It follows that the question referred for the opinion of the High Court must be answered in favour of the Department and against the assessee. The Department is entitled to its costs. Hearing fee Rs. 250.