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2001 DIGILAW 628 (MAD)

Commissioner of Income Tax v. D. K. Nambudripad

2001-06-18

A.SUBBULAKSHMY, R.JAYASIMHA BABU

body2001
Judgment :- Jayasimha Babu, J. The revenue contends that because the assessee was born, though long prior to the independence of this country, in the area that subsequently formed the State of Kerala, the assessee is bound by all the enactments passed by the State of Kerala in the field of his personal law, more than 25 years after independence. The statute on which the revenue relied is the Kerala Joint Hindu Family System (Abolition) Act, 1975. The facts noticed by the Tribunal show that the assessee had, when the princely States of Cochin and Travancore had existed and the composite Madras Presidency was also in existence prior to independence, obtained a certificate of Naturalization on 17-9-1940 by which he became British subject, which status he had till the country gained independence. The assessee joined the Madras Government service in 1941 and retired from that service in 1969. Throughout his service he had worked within the Madras Presidency State of Tamil Nadu only. After his retirement, he had settled down in the city of Madras. As regards the properties owned by HUF of which he is the karta, there are two documents, one registered at the Sub-Registrar's Office, Vadakkancherri, Cochin and the other at the Sub-Registrar's Office at Qttapallam in the years 1949 and 1950, respectively. All the assessments of the assessee are made in the State of Tamil Nadu. The Assessing Officer for the assessment years 1977-78 to 1982-83 relying upon the Kerala Joint Hindu Family System (Abolition) Act sought to assess the assessee as an association of persons at the maximum marginal rates declining to assess the assessee as a Hindu joint family in which status assessments had been made for the years 1974-75 to 1976-77. The appellate authority concurred with the Assessing Officer. The Tribunal, disagreeing with the revenue's view and what had been done by its officers, held that the assessee is entitled to be treated as a Hindu joint family notwithstanding the enactment of the said Kerala Act.We are in agreement with that view of the Tribunal. The Act passed by the Kerala State Legislature is applicable to the State of Kerala and not beyond it. The assessee has throughout been in Tamil Nadu after he took up employment in the then Madras Presidency. The Act passed by the Kerala State Legislature is applicable to the State of Kerala and not beyond it. The assessee has throughout been in Tamil Nadu after he took up employment in the then Madras Presidency. He became a British subject in 1940 and ceased to be subject of the princely State which later became part of the State of Kerala. He has been assessed as a HUF in Tamil Nadu. The fact that this HUF has some properties in Kerala, does not disentitle the HUF from being assessed in that status. The assessment is made on the person owning the properties, the assessment being for the purpose of levying income-tax. The status of the assessee outside the State of Kerala is unaffected by the said Kerala Act which put an end to the joint family system in Kerala. The said Act cannot be applied to persons outside Kerala on the sole ground that they had been born there and even when they had established permanent residence outside the State and were permanently domiciled outside that State. The Supreme Court in the case of CIT v. N. Ramanatha Reddiar (HUF), after considering the said Kerala Act held that it is not permissible for the Income-tax Department to continue to make assessments in the status of HUF in Kerala after the commencement of that Act. In this case, the assessment is not in Kerala, but outside Kerala and in respect of person who is very much domiciled outside Kerala. The Tribunal was right in holding that the Kerala Joint Hindu Family System (Abolition) Act was inapplicable to the assessee. We answer the question referred to us as to whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the provisions of the Kerala Joint Hindu Family System (Abolition) Act are inapplicable to the facts of the case and that the assessee should be assessed only in the status of HUF for the assessment years 1977-78 to 1983-84, in favour of the assessee and against the revenue.