http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 17  

PETITIONER: APOORVA SHANTILAL SHAH

       Vs.

RESPONDENT: COMMISSIONER OF INCOME TAX GUJARAT I, AHMEDABAD

DATE OF JUDGMENT03/03/1983

BENCH: SEN, AMARENDRA NATH (J) BENCH: SEN, AMARENDRA NATH (J) BHAGWATI, P.N.

CITATION:  1983 AIR  409            1983 SCR  (2) 492  1983 SCC  (2) 155        1983 SCALE  (1)181

ACT:      Partial partition-IV/other  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-Income  Tax Act,  1961, Section 171.

HEADNOTE:      The assessee  is a  Hind undivided Family consisting of four members,  namely, Sri  Apoorva Shantilal Shah, his wife Smt. Karuna  and their  minor sons Chintan and Tejal. 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 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 1?77 shares of  the same  Company. The Income 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.  he  remaining  shares  were  not  allotted  in  their entirety to tho remaining third coparcener, normally Apoorva separately or  Apoorva and  Smt. Karuna  jointly  describing them as  U P.  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 U.P, 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, beings outside  the framework  at the Hindu Law could not be recognised as  valid for  the purposes of Section 171 of the Income  Tax  Act.  All  the  questions  refferd  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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 17  

effect any  partial partition  of  joint  family  properties between himself  and this  minor sons.  Hence the  appeal by special leave.      Allowing the appeal, the Court 493 ^      HELD: 1.1. 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, 515 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 his  minor sons, whether in exercise of his superior  right as father or in exercise of the right as patria potestas  has necessarily to be exercised bonafide by the father  and is  subject to  the right  of  the  sons  to challenge the  partition, if  the partition  is not fair and just. [511 C-E]      1.3. The  right  of  the  father  to  bring  about  the disruption of the joint family properties in exercise of his superior right,  as  father  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  proportion 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 effected with the consent of the members of joint family and cannot be extended to a case when partial  partition 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 his right  as patria  potestas in  entitled lo 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 his 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 effect the partition of properties cannot be limited only to a case where the partition is total. 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 that in all such  cases of partition, partial or otherwise, there is bound to  be a  conflict of  interest between the father and his sons.  If the father does Dot 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 reliefs including a proper partition. In appropriate  cases  even  during  minority  the  minor  sons through a  proper guardian  may impeach  the validity of the partition brought  about by the father either in entirety of the joint  family properties  or only  in  respect  of  part thereof, if the partition had been effected by the father to the detriment  of the  minor sons  and to  the prejudice  of their interest. [510 A-H]      Charandas Haridas v. Commissioner of Income Tax, Bombay (1960) 39 I.T.R. 202 (S.C.) Kalloomal Tapeswari Prasad (HUF) v. Commissioner  of Income J. J Tax. Kanpur (1982)133 I.T.R. 690 (S.C.) followed:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 17  

494      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  definition  of  partial partition in  Explanation (b)  makes it  clear that  partial partition as  regards the  persons  constituting  the  Hindu undivided family  or as regards proper ties belonging to the Hindu Undivided family, or both, is recognised. [514 P-G]      2.1. A  partial partition  of any joint family property by the  father between  himself and his sons does not become invalid  on   the  ground  that  there  has  been  Do  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  bonafide 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,  he can  always challenge the validity of such partial  partition in an appropriate proceeding and the validity of  such partial partition will necessarily have to be  adjudicated   upon  in   the  proceeding   on  a  proper consideration of all 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 he held to be valid. [515 D-F]      2.2. It  is not  open to  the Income-tax Authorities to consider a  partial partition  to be  invalid on  the ground that shares  have not  been equally divided and to refuse to recognise the same. It is undoubtedly open to the Income-tax officer before  recognizing  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, he will be  perfectly within  his right  to refuse to recognise the same. [515 F-G]      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 has not been acted upon. As there is no finding that the partial partition is sham or fictitious or  not a  genuine one,  on enquiries made by the Income-tax  officer,   and  as   the  partial  partition  is otherwise valid  under the  Hindu Law, the partial partition has 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,. 516 A-B]

JUDGMENT:      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,  Harish Salva  and Gatutam  Philip for the Appellant. 495      S C.  Manchanda Anil  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 5  in this  appeal by  Special Leave is whether the father in  exercise of  his  right  as  Patria  Potestas  or

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 17  

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)  his wife  Smt. Karuna and their minor sons (3) Chintan and 4) Tejal, is the appellant before  us. The members of the H.U.F. are governed by the Mitakshara School of Hindu Law. The D assessment year in question  is the  year  1975-76.  During  the  assessment pertaining to  the assessment year under consideration, Shri 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 bad  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 remaining  third coparcener,  namely,  Shri 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  the distance  of the  minor children, as this course  would require the approval of the Court but the same had been purported to 496 have been  made 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.P., as Apoorva’s wife Karuna also became entitled to an equal share on partition between the father and the sons.      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 court’s sanction even in a case  where some  of the  parties to  the  partition  were minors. As  regards  the  print  that  the  distribution  of shareholding 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 distribution 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 recognition  of the  said partitions. The Tribunal  held for  reasons recorded  in the  order that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 17  

partial partitions  in the  instant case  were  outside  the framework of  the Hindu  Law and  as such  they could not be recognised as  valid for  the purposes of S. 171 of the Act. In that  view of  the matter  the  Tribunal  set  aside  the 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:-           (1) Whether  on the facts and in the circumstances      of the-case,  the Tribunal  was right  in holding  that      Shri Apoorva  Shanti1al could  not himself  have  given      consent on  behalf of  his minor sons to the partitions      proposed by him in his individual capacity as father ? 497           (2) Whether  on the facts and in the circumstances      of A  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 partitions could not be recognized as valid for      the purpose  - 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 circumstances      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 had exercised      his patria potestas ?           (6) Whether the Income-tax Department ;9 competent      to challenge the exercise of patria potestas by a Hindu      father in  respect of  coparcenery property,  making  a      partial 1 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 (1) there was no decision of any court on the point. The  High Court  also considered  other decisions and books and  C’ treatises  on Hindu  Law. The  High Court held that on  a consideration  of the  authorities, the following propositions were established :-           1. From the stand point of ancient Hindu Law, what      was recognised  was only  a partition in respect of all      the 498      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 there  after (after  disruption of  joint  status)      held as tenants-in common.           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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 17  

         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 HUP  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      properties except by consent of all the coparceners.           5. Tn  respect of  a joint  family consisting of a      father  and   his  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 his 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 exercised 499      by him  without the  consent of  his sons’.. "Again, in      all A 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 "           7.   There is  nothing in (I) either ancient Hindu      Law or (2) customary 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. C The High Court observed:-           "The validity  of the  aforesaid  propositions  is      incapable of  being disputed and has not been disputed.      What has  been 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. In  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 Gopaldas (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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 17  

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. 500      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  Hindu undivided  family consisting of himself, his wife  and minor  sons who are governed by the Mitakashra 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 has advanced the following arguments.      1. According to the Mitaksbara 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 his 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 Kondaswami v. Doraisamy Ayyar.(1)      2. A  father in any such case of ancestral property has the power to separate from 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 (11 the Edn.).      Para 323  of Mulla’s  Hindu Law,  11th Edn. at page 443 and 444 reads as follows:-           "The father  of a  joint family  has 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      sons is not necessary for the exercise 501      of that  power. But a grandfather has no power to bring      A about  a separation 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.           It is  open to  the members  of a  joint family to      sever 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 his  sons, remaining  joint with  the other  sons or

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 17  

    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  has 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 Bahu Patil, (1) and to  the decision of the Madras High Court in the case of Venkataswara Pattar v. K. Mankayammal.(2)      4.   S. 171  of the  Income-tax Act, 1971 and S. 25A of the earlier  Acc 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 expressed in deci- 502 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 in the case of Charandas Haridas v. C.l.T. Bombay. (1)      5. This  power of  the father has been described as his "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 power 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,(2) when  it speaks of partial partition of the joint family by agreement of the 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, has advanced the following arguments: 503      1. Under  ancient  Hindu  Law,  partial  partition  was unknown. Severence of status disrupted the family. The joint family need  not necessarily  have any  property. If  it bas 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.(l)  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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 17  

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 has 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 learned counsel for the parties. 504      We shall  now proceed  to consider  the decisions which appear to  us to  leave 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  was the  Karta of  a Hindu undivided family consisting  of his  wife, Shantaben,  three sons  and himself. He  was a  partner in  six managing agency firms in six mills  In previous  years the  income received by him as partner in these Managing Agencies was being assessed as the income of  the Hindu undivided family. On December 11, 1945, Charandas Haridas  acting  for  his  three  minor  sons  and himself  and  Shantaben  his  wife,  entered  into  an  oral agreement for partial partition. By that agreement Charandas Haridas gave  one pie  share to his daughter Pratibha 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,  his wife and sons. This  agreement was  to  come  into  effect  from  1st January, 1946  which was  the beginning of afresh accounting year. On  11th September,  1946 Charandas Haridas acting for himself  and   his  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 had taken place orally earlier. In the assessment year 1947- 48 and  1948-49, Charandas  Haridas claimed  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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 17  

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 division, 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 com- panies did  not undergo  any chaoge  whatever as a result of the alleged  partition." The  Tribunal, therefore, held that the arrangement  to share  the receipts  from this source of income was not binding on 505 the department, if the assets themselves continued to remain joint. A  It further  held that  the document was "a farce", and did  not  save  the  family  from  assessment  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 com  mission 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 purported 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 assets were concerned, they still belonged to the Hindu  undivided family.  The assessee Charandas 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 Appovier 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.  The      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:- 506           "In our  opinion, here  there are  three different      branches  of  law  to  notice.  There  is  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 of  a 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 17  

    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 partners.      The Income-tax  law before  the partition  takes  note,      factually, of  the position  of the karta, and assessee      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 Partner ship 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 of a Hindu undivided      family. There  is nothing  in the Indian Income-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 507      the assets,  because  in  so  far  as  the  firms  were      concerned,  A   the  step   would  have   been   wholly      inconsequential."      This Court further observed at p. 209:-           "No doubt,  there were  many  modes  of  partition      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 has the Appellate Tribunal given such      a finding. The document was fully effective between the      members of  the family, and there was actually no Hindu      undivided  family   in  respect   of  these  particular      assets."      In the  case of  Kalloomal Tapeswari  Prasad  (HUF)  v. Commissioner of  Income-tax, Kanpur(l),  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 has been a partition,      it is  presumed that  it was  total one  both as to the      parties and  property but  when there  is  a  partition      between brothers,  there is  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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 17  

    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 508      remaining family property. After such partial partition      the  right   of  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, (1) by a father during      his life  time between himself and his 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  Income-tax, U.P.(l)  a  division Bench of  the  Allahabad  High  Court  also  recognised  the validity of  partial partition.  R.S.  Pathak,  J.  (as  his Lordship then  was) who spoke 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 1st July, 1961.      It may  be noted  that in the case of Charandas Haridas (supra) decided  by this  Court and  in the  case of Motilal 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 appearing  at   p.  18  in  ’Mitacshare  and  Daya-Bhaga-Two Treatises on the Hindu Law of Inheritance translated by H.T. Colebrooke, Esq.,’ in Ch. I, sec. II (2):-           "When a  father wishes to make a partition, he may      at his  pleasure separate  his children  from  himself,      whether one. two or more sons".      In ’History of Dharamshastra’ by Shri P.V. Kane (second Edition, 1973) Vol. III at p. 592, it has been stated:-           "The Manager  is  called  Karta  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, 509      sale or  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, consider it necessary to refer to the comments of the other learned authors placed before us in course of the hearing of the appeal.      The various  commentaries on  Hindu Law  by the various learned 1  authors go  to indicate  that ancient  Hindu  Law speaks of  complete severance  of joint family and partition of joint  family properties  and does  not  mention  partial partition either  with regard to the joint family properties

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 17  

or with  regard to  some of the members of the joint family. The right of the father to bring about the disruption of the joint family properties in exercise of his superior right as father or of his rights as patria potestas is recongnised in ancient Hindu Law.      It is, however, well settled by judicial decisions 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. The High Court appears to have accepted this  position but  the High Court then proceeds to hold that  the proposition  laid down  by judicial decisions with regard  to  partial  partition  will  apply  only  when partial partition  is  effected  with  the  consent  of  the members of the joint family and cannot be extended to a case where partial  partition is  sought to  be brought  about by father in  exercise of  his superior rights as father or his right,  as  patria  potestas.  On  an  anxious  and  careful consideration of  the matter we are unable to agree with the view expressed by the High Court. 510      If the  father in  execise of  his superior right or of his right.  as patria  potestas is entitled to bring about a complete disruption  of the  joint family  and to  effect  a complete partition  of joint  family properties  of a  Hindu family consisting of himself and his 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,  we see  no  reason  to  limit  the  power  or authority of  tho father  to effect  the partition only to a case where the partition is total. The superior right or the right of  patria potestas  which a  father enjoys  is always expected to be exercised in the best interest of the members of the  family and  more particularly  his minor  sons.  The father, undoubtedly,  enjoys the  right  to  bring  about  a complete  disruption  of  the  joint  family  consisting  of himself  and  his  minor  sons  and  to  effect  a  complete partition of  The joint  family properties  even against the will of  the minor  sons. It  is also  now  recognised  that partial partition of joint family properties is permissible. When father  can bring  about a  complete partition of joint family properties  between himself  and his  minor sons even against  the  will  of  the  minor  sons  and  when  partial partition under the Hindu Law is now accepted and recognised as valid  by judicial  decisions, we  fail to  appreciate on what logical  grounds it can be said that the father who can bring  about  a  complete  partition  of  the  joint  family properties between  himself and  his minor  sons will not be entitled to  effect a  partial  partition  of  joint  family properties between  himself and his minor sons if the father in the  interest of  the joint  family and its members feels that partial partition of the properties will be in the best interest of  the joint  family and its members including the minor sons.  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 a  matter of  universal application  that in all such cases  of partition,  partial or  otherwise,  there  is bound to  be a  conflict of  interest between the father and his sons. If the father does not act bona fide 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 reliefs including a proper partition. In appropriate cases  even  during  minority,  the  minor  sons through d  proper guardian  may impeach  the validity of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 17  

partition brought  about by the father either in entirety of the joint  family properties  or only  in  respect  of  part thereof, if the partition had been effected by the father to the detriment  of the  minor sons  and to  the prejudice  of their interests. 511      We may  point out that in the case of Charandas Haridas to which  we have  earlier referred  and in which this Court recognised the  validity of  partial partition brought about by the father of some joint family properties, the sons were all minors.  Also in  the case of Motilal Shamsunder earlier quoted,  where  the  Allahabad  High  Court  recognised  the validity of  partial partition  brought about  by the father between himself and his sons, all the sons were minors.      The decision  of this  Court in  the case  of Charandas Haridas and  the observations  of this  Court in the case of Kalloomal Tapeswari  Prasad (supra)  which we  have  earlier quoted, in our opinion, clinch the decision of the question.      We must,  therefore, hold  that  partial  partition  of properties brought  about by  the father between himself and his minor  sons cannot be said to be invalid under the Hindu Law and  must be  held to  be valid  and binding. We wish to make it  clear that  this right  of the  father to  effect a partial partition of joint family properties between himself and his  minor sons,  whether in  exercise of  his  superior right as  father or  in exercise  of  the  right  as  patria potestas has  necessarily 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.      S. 171 of the Income-tax Act, 1971 provides as follows:           (1) A  Hindu family hitherto assessed as undivided      shall be  deemed  for  the  purposes  of  this  Act  to      continue to  be a  Hindu undivided family, except where      and in  as far as a finding of partition has been given      under this  section in  respect of  the Hindu undivided      family.           (2) Where,  at the  time of  making an  assessment      under sec.  143 or  section 144, it is claimed by or on      behalf of  any  member  of  Hindu  family  assessed  as      undivided that  a partition,  whether total or partial,      has taken  place among  the members of such family, the      Income  Income-tax   officer  shall   make  an  enquiry      thereinto after giving notice of the enquiry to all the      members of the family. 512           (3) On  the completion  of the enquiry, the Income      tax officer  shall record a finding as to whether there      has been  a total  or partial  partition of  the  joint      family  property,   and,  if  there  has  been  such  a      partition the date on which it has taken place.           (4) Where  a finding of total or partial partition      has been  recorded by  Income tax  officer  under  this      section,  and  the  partition  took  place  during  the      previous year-      (a)  the total income of the joint family in respect of           the period  up to  the date  of partition shall be           assessed as if no partition had taken place; and      (b)  each member or group of members shall, in addition           to any  tax for  which he  or it may be separately           liable and  notwithstanding anything  contained in           clause (2) of section 10, be jointly and severally           liable for the tax on the income so assessed.           (5) Where  a finding of total or partial partition      has been  recorded by the Income tax officer under this      section, and  the partition took place after the expiry

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 17  

    of the  previous year, the total income of the previous      year of  the joint family shall be assessed at as if no      partition had taken place; and the provisions of clause      (b) of  sub-section (4)  shall, so far as may be, apply      to the case.           (6) Notwithstanding  anything  contained  in  this      section  if   the  Income-tax   officer  finds,   after      completion of  the  assessment  of  a  Hindu  undivided      family  that   the  family   has  already   effected  a      partition, whether  total  or  partial  the  Income-tax      officer shall  proceed to  recover the  tax from  every      person who  was a  member  of  the  family  before  the      partition, and  every such  person shall be jointly and      severally liable for the tax on the income so assessed:           (7) For  the purposes of this section, the several      liability of  any member or group of members thereunder      shall be computed according to the portion of the joint      family property allotted to him or it at the partition,      whether total or partial. 513           (8) The  provisions of  this section shall, so far      as may  be apply in relation to the levy and collection      of any  penalty, interest, fine or other sum in respect      of any  period up to the date of the partition, whether      total or  partial of  a Hindu  undivided family as they      apply in  relation to the levy and collection of tax in      respect of any such period.      ...         ...       ...      ...            ...      ...         ...       ...      ...            ...      ...         ...       ...      ...            ...      Explanation: In this section.-           (a) "partition" means-           (i)  where  the  property  admits  of  a  physical                division,  a   physical   division   of   the                property, but  a  physical  division  of  the                income without  a physical  division  of  the                property producing  the income  shall not  be                deemed to be a partition; or           (ii) where  the  property  does  not  admit  of  a                physical division  then such  division as the                property admits  of, but  a mere  sevence  of                status shall not be deemed to be a partition;           (b)  "partial partition"  means a  partition which                is   partial    as   regards    the   persons                constituting the  Hindu undivided  family, or                the  properties   belonging  to   the   Hindu                undivided family, or both.      It may  be noted  that the  following further provision was included  in the  said section as sub-section (9) by the Finance (No. 2) Act, 1980 w. e. f. 1st April, 1980 :- G           (9)  Notwithstanding  anything  contained  in  the      foregoing provisions  of this  section, where a partial      partition  has  taken  place  after  the  31st  day  of      December, 1978  among the  members of a Hindu undivided      family hitherto assessed as undivided:- 514           (a)  no claim  that  such  partial  partition  has                taken place shall be inquired into under sub-                section (2)  and no finding shall be recorded                under  sub-section   (3)  that  such  partial                partition had  taken place  and  any  finding                recorded under sub-section (3) to that effect                whether before or after the 18th day of June,                1980 being  the date  of introduction  of the                Finance (No  2) Bill  1980, shall be null and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 17  

              void;           (b)  such family shall continue to be liable to be                assessed under this Act as if no such partial                partition had taken place;           (c)  each member  or  group  of  members  of  such                family  immediately   before   such   partial                partition and  the family,  shall be  jointly                and severally  liable for  any tax,  penalty,                interest, fine  or other  sum  payable  under                this Act  by the  family in  respect  of  any                period whether  before or  after such partial                partition;           (d)  the several  liability of any member or group                of  members   aforesaid  shall   be  computed                according to  the portion of the joint family                property  allotted  to  him  or  it  at  such                partial partition:      and the provisions of this Act shall apply accordingly.      This sub-section  (9)  was  not  in  existence  at  the relevant time  and has  no retrospective operation and it is of no material consequence in deciding the present case.      The aforesaid provisions of the Income-tax Act, as they stood  at  the  material  time,  clearly  recognise  partial partition.  The   definition   of   partial   partition   in explanation (b)  makes 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.      In the  present case,  the  partial  partition  of  the shares belonging  to  the  Hindu  undivided  family  cannot, therefore, be said to 515 be bad either under the Hindu Law or under the Indian Income tax Act.  We must,  therefore, hold that the High Court went wrong in deciding that partial partition of the joint family properties of  the Hindu  joint family  by  the  father  was invalid and  could not  be recognised  under the  Income-tax Act.  The   subsequent  amendment  of  section  171  by  the inclusion  of   sub-section  (9)   does  not   require   any consideration as  the said, sub-section was not in existence in the  relevant assessment  year and is only operative from 1st April, 1980.      The other  question which  falls for  determination  is whether the  partition can  be said to be bad at the time of the partition  there was  no equal division of the shares by the father  amongst himself and his minor sons and a part of the share  holding had not been distributed to the father or to the  father and mother jointly. We may point out that the A.A.C. has found that at the time of division of the shares, the  shares   had  been   distributed  equally  taking  into consideration the  shares which had earlier been distributed amongst the  parties. In our opinion, a partial partition of any joint  family property by the father between himself and his sons  does not  become invalid  on the ground that there has 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 bonafide in the interest of the joint family and 13 its members, bearing in mind  in particular  the interests  of the minor sons. If however, any  such partial partition causes any prejudice to any of  the minor  sons and if any minor son feels aggrieved by any  such partial  partition, he can always challenge the validity  of   such  partial  partition  in  an  appropriate proceeding  and   the  validity   of  such   partition  will necessarily have to be adjudicated upon in the proceeding on

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 17  

a proper consideration of all 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. It  is not  open  to  the  Income-tax Authorities to consider a partial partition to be invalid on tho ground  that shares have not been equally divided and to refuse to  recognise the same. It is undoubtedly open to the Income-tax officer  before recognising the partition to come to a  conclusion on  proper enquiry whether tho partition is genuine or  not. If  the Income-tax officer on enquiry comes to a finding that the partition is sham or fictious, he will be perfectly  within his  right to  refuse to  recognise the same. In  the instant  case, there  is no  finding that  the partial partition is sham or 516 fictitious or  that the  partial partition  is not a genuine one and has not been acted upon. As there is no finding that the partial partition is sham or fictitious or not a genuine one, on enquiries made by the Income-tax officer, and as the partial partition  is otherwise  valid under  the Hindu Law, the partial partition has 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.      In the  result, the  appeal succeeds.  The judgment and order of  the High  Court are  hereby set aside. The partial partition is  held to be valid and the Income-tax Officer is directed to  recognise the  same and  to proceed to make the assessment on  the basis  that  there  has  been  a  partial partition of  the said  shares between  the parties.  In the facts and  circumstances of  this case, we do not propose to make any order as to costs. S.R.                                         Appeal allowed. 517