Family partition of Hindu Undivided Family which is as per amended provisions of Hindu Succession Act, 1989 is recognised u/s 171 of I-T Act - Revenue cannot deny recognition : ITAT.

CHENNAI, JULY 01, 2007 : BRIEFLY stated facts of the case are that the Assessee is a Hindu Undivided Family consisting of Shri P.C. Ramakrishna, his wife and his two daughters. There was an oral total partition of H.U.F. on 16.9.1994 between Sri P.C. Ramakrishna, his wife and two daughters. Under this oral partition, the two daughters were allotted Rs.12,50,000/- each and these amounts were adjusted against a sum of Rs. 12,50,000/- advanced to each of them earlier as loan by H.U.F. In the said partition, all other properties of H.U.F. were allotted to Sri P.C. Ramakrishna. This oral partition took place on 16.9.1994 which was subsequently confirmed by a Deed of Declaration confirming the partition.

This partition was filed before the AO under sec. 171 of the Act seeking recognition of the partition as provided under the Act. The petition was proceeded by the AO who vide his order dated 17.3.1998 held that partition is a sham one and the mere contrivance to divest the family funds to reduce the incidence of tax and accordingly he declined to grant recognition to the partition in exercise of his powers u/s. 171 of the Act.

Aggrieved, the Assessee preferred an appeal before the C.I.T(Appeals). The C.I.T.(Appeals) held that the provisions of sec.171 of the Act cannot confer any right to a partition which is not available to any person under the Hindu Law; that according under the Hindu Law, there should be a partition between two or more coparceners and therefore, it cannot be a partition where the H.U.F. consists of only one coparcener. Finally, he held that even after introduction of amendment in Tamil Nadu in 1989, the daughters cannot claim partition in the joint family property of the HUF and accordingly, he confirmed the action of the AO. Aggrieved, the assessee moved Tribunal in second appeal.

The Tribunal summarized its detailed observations as follows :-

Considering the provisions of Hindu Succession Act, 1956 as amended by Hindu Succession (A.P.Amendment) Act, 1986, introduction of sec.29A which was confirmed by the Hon'ble Apex Court in the case of S. Sai Reddy ([1991] 3 SCC 647) and also the amendment of Hindu Succession 1956 by the Hindu Succession (T.N.Amendment) Act 1989, which are the provisions similar to the Hindu Succession ( A.P.Amendment) Act, we are of the considered opinion that the difference between daughter and son of the Mitakshara Hindu Family is removed and the daughter is conferred the coparcenary rights in the joint family property by birth in the same manner and to the same extent as the son.

Daughter is entitled to claim partition and her share in the joint family property i.e. H.U.F. property, is without dispute. In the present case, Sri P.C. Ramakrishna, H.U.F. apart from P.C. Ramakrishna, Karta, two daughters along with his wife are the members of H.U.F. After the amendment of Hindu Succession (T.N.Amendment) Act, 1989 vide clause (i) and (ii), the daughter in H.U.F. shall by birth become a coparcener in her own right in the same manners as the son and have the same rights in the coparcenary property as she would have had if she had been a son, inclusive of the right to claim by survivorship and shall be subject to liabilities and disabilities in respect thereto as the son. She is entitled to partition of a Joint Hindu Family coparcenary property and in such partition, Hindu Family coparcenary property shall be so divided to a daughter so as to allot the same share as is allottable to a son.

The amendment brought out w.e.f. 25th March, 1989 has removed the distinction as regards to a son or a daughter in respect thereto coparcenary property of Joint Hindu family as governed by Mitakshara law and daughters are clearly treated as coparceners. In the present case, there are two daughters to the Karta. Hence, there are three coparceners in the Joint Hindu Family and the daughters have been allotted a sum of Rs. 12,50,000/- each.

Hence, we find no infirmity in the partition of the Joint Hindu Family which is in accordance with the Hindu Succession (T.N.Amendment) Act, 1989. In view of this, we hold that the partition is as per the amended provisions of Hindu Succession ( T.N.Amendment) Act, 1989. Hence, there is no reason to refuse Registration to family partition of Joint Hindu Family property.

Accordingly, the partition of H.U.F. is recognized under sec.171 of the Act and the AO is directed to pass a consequential order recognizing the partition of the H.U.F.

And the final word : The assessee's appeal was allowed.





Daughters are entitled to Ancestral Property 

A Full Bench of the Bombay High Court comprising Mohit Shah C.J, M. S. Sanklecha  and M. S. Sonak, JJ,  delivered a noteworthy judgment on daughter’s right to  ancestral property in a joint HUF on 14th August, 2014. The Bench was constituted on a reference by Single Judge R.G. Ketkar J. who doubted the correctness of the decision of the Division Bench in the case of Vaishali S. Ganorkar & others v. Satish Keshavrao Ganorkar & others,. Prior to the enactment of the Hindu Succession (Amendment) Act, 2005 (hereinafter the Amendment Act), the Hindu Succession Act, 1956 (hereinafter the Principal Act) did not provide any rights to daughters in respect of partition of property or the right to demand partition or claim shares in the coparcenary property. 

A coparcener is a person who has equal rights in the undivided property of a HUF. The Amendment Act now entitles women to an interest in the HUF property by amending Section 6 of the Principal Act and makes a daughter a coparcener in her own right, thereby upholding the fundamental right to equality and non discrimination on the basis of gender enshrined in the Constitution. In the current case the point of contention was not, therefore, whether daughters are also entitled to an interest in the HUF property like their male counterparts, which has been duly settled, but whether the Amendment Act has a prospective or retrospective effect, the determination of which will have a direct bearing on the controversial issue of whether daughters born before 2005 are also entitled to be coparceners in their own right in the same way that daughters born on or after 9 September 2005 are now entitled. A Division Bench upheld the prospective operation of the Amendment Act in Vaishali S. Ganorkar v. Satish Keshavrao Ganorkar, which in effect disentitles all daughters born before 9 September 2005 to claim their equal interest in the Joint HUF governed under the Mitakshara law. Further, the Bench interpreted the amended section to mean that daughters born before 2005 would get rights in the coparcenary property only on the death of the father-coparcener on or after 9 September, 2005.

This provision effectively leaves the daughters remediless if a male coparcener, in the interim, decides to dispose of the property by testament/will. Disagreeing with the decision of the Division Bench, Single Judge R.G Ketkar J. held that the amended section has retrospective effect from the date of the enactment of the Principal Act and is applicable to all daughters who are born before or after 2005 as a daughter becomes a coparcener in her own right by virtue of her birth. The matter was thus referred by the Single Judge to the Full Bench in order to reconcile the differing opinions and reach a reasoned decision bound to impact the lives of millions in the country. Although Hindu women were considered a part of the HUF under the Shastric/Customary Law for the purpose of maintenance, they did not have a right in the property and it transmitted only to male coparceners by way of survivorship. Today, modern thinking has slowly shaped society to accept equality of the genders which has thankfully seeped into the laws of intestate succession resulting in the Amending Act, 2005. .However, the amended Section 6 has left ample scope to the courts for interpretation and this is precisely the critical space where equality needs to be reasoned and upheld. More than just seeing this issue through the lens of feminist movements for equality, the case throws light on the current trend of the courts in application of the rules of interpretation.

The Full Bench concurring with the opinion of the Single Judge stated “We agree with the Respondents that normally a statute should be construed on its plain meaning. However, when the plain reading of the provision is not very clear then, in that case, one has to apply an appropriate tool of interpretation to unearth the intent, object and purpose of the enactment. In such cases, particularly, in cases of socio-economic legislations like the one we are concerned with, we must apply the Mischief or Purposive Rule of interpretation to find out the true meaning of the Statute”. The Mischief Rule propounded in 1584 from Heydon’s case, essentially seeks to rectify the existing defect in the common law and thus allows interpretation to keep in tune with the changing social philosophies of the time. Applying the Purposive Rule to this case, the Full Bench has determined the prospective v. retrospective operation of the Amendment Act. As is well established, the interpretation of statutes raises a presumption against retrospective operation of statues unless expressly or impliedly specified by the legislation itself, as it would result in the dire and chaotic consequence of unsettling already vested rights. However, the courts must not be restrained by the black letter of the law which subverts the justice and equality due to millions of daughters born before 9 September 2005.

The Court, to mete out justice, resorted to the application of an intermediary category known as ‘Retroactive Statute’ which does not operate backwards and does not take away vested rights, but successfully provides rights to those daughters who are alive at the time of the Amendment Act, irrespective of whether they were born before or after 2005. In case the coparcener has died before 2005, then the pre-amended law is applicable but by passing of the Amendment Act, all daughters who are alive ipso facto become coparceners, thus settling the interpretation of the amended Section 6. “The only requirement is that when an Act is being sought to be applied, the person concerned must be in existence/living. The Parliament has specifically used the word ‘on and from the commencement of Hindu Succession (Amendment) Act, 2005’ so as to ensure that rights which are already settled are not disturbed by virtue of person claiming as an heir to a daughter who had passed away before the Amendment Act came into force.”, the Court said.


SC says daughters whose fathers died before amendment in Hindu Succession Act have no right to inheritance

A bench of Justices Anil R Dave and Adarsh K Goel held that the date of a daughter becoming coparcener (having equal right in an ancestral property) is "on and from the commencement of the Act".

The Supreme Court has said that a daughter's right to ancestral property does not arise if the father died before the amendment to Hindu law came into force in 2005.

According to an Indian Express report, the apex court held that amended provisions of the Hindu Succession (Amendment) Act, 2005, do not have retrospective effect. The father would have to be alive on September 9, 2005, if the daughter were to become a co-sharer with her male siblings.

A bench of Justices Anil R Dave and Adarsh K Goel held that the date of a daughter becoming coparcener (having equal right in an ancestral property) is "on and from the commencement of the Act".

The Hindu Succession Act, 1956 did not give daughters inheritance rights in ancestral property. However, the Congress-led UPA government modified this Act on September 9, 2005. Earlier, women could only ask for sustenance from a joint Hindu family.

The only restriction in force after the passage of this amendment was that women could not ask for a share if the property had been alienated or partitioned before December 20, 2004, the date the Bill was introduced. But now the Supreme Court has added this new restriction.

Indian Express says that the apex court ruling overrules some high court judgements which say that the amendment being in the form of a gender legislation, should apply retrospectively for the sake of removing discrimination.

The top court shot down the argument that a daughter acquires right by birth, and even if her father had died prior to the amendment, the shares of the parties were required to be redefined. "The text of the amendment itself clearly provides that the right conferred on a 'daughter of a coparcener' is 'on and from the commencement' of the amendment Act. In view of plain language of the statute, there is no scope for a different interpretation than the one suggested by the text," it said. 

Further, there is neither any express provision for giving retrospective effect to the amended provision nor necessary intent, noted the court, adding "even a social legislation cannot be given retrospective effect unless so provided for or so intended by the legislature".


Note: Information placed here in above is only for general perception. This may not reflect the latest status on law and may have changed in recent time. Please seek our professional opinion before applying the provision. Thanks.

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