COMMISSIONER OF INCOME-TAX VS MRS. BIBIJAN BEGUM
1998 P T D 2207
[221 I T R 836]
[Gauhati high Court (India)]
Before D.N. Baruah and S.B. Roy, JJ
COMMISSIONER OF INCOME-TAX
versus
Mrs. BIBIJAN BEGUM
Income-tax Reference No.43 of 1990, decided on 07/06/1996.
Income-tax---
----Assessment---Muhammadan law---Family settlement---Muslim female giving up part of her right in land received as dower in favour of her children in a family settlement---Children had no right in land---No existing or likely dispute in future in respect of land---No customary law among Muslims---Family settlement was not valid---Indian Income Tax Act; 1961.
The assessee, a Muslim lady, filed her return for the first time for the assessment year 1982-83 and in the return her share was shown as one -third from a building. However, for the year 1985-86, the assessee claimed to be the owner of one-fifth share only in the aforesaid land and building. The assessee submitted a copy of the family settlement agreement, dated June 9, 1976, signed by all the brothers and sisters of B, husband of the assessee, and in that settlement it was stated that the land in question had a multi-storeyed building standing thereon. It was stated that the land had been obtained in exchange for the land she had received in marriage as dower. The Income-tax Officer held that the mehar was an exclusive and absolute property of a Muslim married lady and the assessee was the owner of the said land and no other person could claim any right over the said property. The Tribunal held that the family settlement was valid. On a reference:
Held, that there was no custom or customary practice of law among Muslims. The concept of family settlement amongst the Muhammedans is not very common. However, instances are there when agreements are made for settling disputes between the parties by way of compromise with or without litigation. A family arrangement presupposes either an existing dispute or a dispute likely to occur in future and to resolve those disputes such family arrangement can be made. It is not a transfer but a settlement by which the members of the family recognise the right, title and interest in respect of various properties belonging to the family and to enjoy the property in the manner indicated in the settlement. Such settlement can be made among the members of the family who have subsisting title to the family property. In the present case, there was no dispute regarding property. At the time of making the family arrangement, the children of the assessee had no right, title and interest over the property or any part thereof. The family arrangement was not valid.
G.K. Joshi and U.Bhuyan for the Commissioner.
B. Malakar for the Assessee.
JUDGMENT
D.N. BARUAH, J.---At the instance of the Revenue, the following five questions have been referred by the Income-tax Appellate Tribunal under section 256(1) of the Income Tax Act, 1961 (for short, "the Act"), for opinion of this Court:
"(1) Whether the learned Tribunal did not err in law in the facts of the case in holding that the general principles of law will prevail over the Muslim customary law in this case?
(2) Whether the learned Tribunal did not err in holding that a valid family arrangement in the eye of law has taken place in this case?
(3) Whether the learned Tribunal did not err in law in going to decide the question that there was no question of forming of association of persons when it was not an issue in the present case for disposal of the appeal and whether it did not err in law arriving at that conclusion?
(4) Whether the learned Tribunal did not err in law in giving a finding that no gift was involved in this case when that question was not at all necessary in deciding the present appeal?
(5) Whether the learned Tribunal did not err in law in arriving at a finding that there was no question of any gift of the property when the assessee, as sole owner of a property makes a settlement by allotting certain portion of the property to others who are aliens so far as this property of the assessee is concerned?"
The respondent/assessee filed her return for the assessment year 1985-86. The Income-tax Officer while making the assessment noticed that the return was filed showing a gross income of Rs.21,670 which constituted partly income from salary and one fifth share of rental income received from house property. After adjustment of certain relief, the assessment was completed under section 143 (1) of the Act on February 19, 1987. There after, the assessment was taken for scrutiny and was reopened under section 143(2) of the Act after obtaining approval from the Inspecting Assistant Commissioner of Income-tax. The Income-tax Officer pointed out that the assessee filed her return for the first time for the assessment year 1982-83 and in the said return her share was shown as one-third of the building and indicated that the assessee alongwith her children, namely, Md. Bakhtiar Ali Ahmed and Saira Banu Begum, purchased the said plot of land on which the present building stands. According to the Income-tax Officer, this contention was incorrect in view of the facts stated above. For the assessment year 1985-86, the assessee claimed to be the owner of one-fifth share only in the aforesaid land and building, the other co-owners were stated to be: (1) Saira Banu Begum; (2) Md. Bakhtiar Ali Ahmed; (3) Abeda Begum; and (4) Aftab Ali Ahmed. The assessee submitted a copy of the family settlement agreement, dated June 9, 1976, signed by all the brothers and sisters of Sri Bahar Ali, husband of the assessee, and in that settlement it was stated that the land in question was covered by Dag No.49, Patta No. 17, Mouza-Beltola, having an area of land measuring 2K, 13L and a multi-storeyed building stood thereon. It was further contended that the said land was obtained by the assessee in exchange of the assessee's 19B 1K 17L---a village land She received it in marriage as dower also known as "mehar". Land measuring 2K, 13L at Ganeshguri Chariali, Guwahati, obtained by the assessee was earlier owned by Nazar Ali, Sideman Ali, Noor Ali . The Income-tax Officer held that the mehar was an exclusive and absolute property of a Muslim married lady and the assessee was the owner of the said land and no other person could claim any right over the said property. The Income-tax Officer further held that as per the records of Gauhati Municipal Corporation, permission was given exclusively to the assessee for construction of the multi-storeyed building and the same was constructed by the assessee. The bank loan of Rs.3 lakhs was also taken by the assessee herself by mortgaging the said land. Therefore, the Income-tax Officer was of the opinion that there was no question of the assessee having one-third or one-fifth share of the property. She herself was the exclusive owner and her claim any right to the property (sic). The assessee filed an affidavit, dated February 8, 1988, corroborating her claim. Therefore, the children cannot claim ownership in the property. The Income-tax Officer held that the Children and the assessee had changed the municipal record to show that they ownership right in their favour and they paid municipal taxes for standing in their names. The Income-tax Officer also held that mere paying of municipal taxes would not change the ownership of the property. The Income-tax Officer, therefore, computed the income of assessee at Rs.7,34,840 after considering different amounts of investment and expenditure.
Being dissatisfied with the decision of the Income-tax Officer, the assessee preferred an appeal to the Commissioner of Income-tax (Appeals), At that stage, the assessee produced a family agreement, dated April 21, 1960, before the Commissioner of Income-tax (Appeals) in support of herd case to show that the assessee was having only one-fifth share of the entire property. This was, however, not produced before the Income-tax Officer.. The Commissioner of Income-tax (Appeals) held that family agreement was a special feature of a Hindu undivided family and a Hindu individual cannot execute family arrangement (?). Therefore, the spirit of family arrangement is altogether alien to Muhammedan Law. The Commissioner of Income-tax (Appeals) rejected the appeal and held that the Income-tax Officer was justified in assessing the whole property in the hands of the assessee.
Thereafter, the assessee took up the matter before the Income-tax Appellate Tribunal. The assessee contended that the children were co-sharers of the property as they were heirs and in that capacity the children had right to the property., The Tribunal held that he shares of the parties being definite, there was no question of forming any association. They would take their specific share. The Appellate Tribunal further held that the family arrangement made by the assessee was valid and the income from the property could be considered in the hands of those persons concerned and there was no element of gift involved in the arrangement. At the instance of the Revenue, the above questions have been referred for the opinion of this Court.
We have also gone through the order of the Appellate Tribunal as well as other documents available on the record. The Appellate Tribunal, in its order, dated March 30, 1990, held that the law of the land and the principles enunciated by the Supreme Court should prevail. The Tribunal further observed that it could not be said that such customary law would prevail against the general principles enunciated by the Privy Council and the Supreme Court. After discussing about a decision of this Court, the Tribunal held that custom or customary practice may have a force of law but it is essential that it should be ancient, invariable, certain and reasonable.
It is a settled principle that the law of the land including the law laid down by 'the Supreme Court must prevail. In Mohammedans Law as per section 33 there are four sources of Muhammedan Law, namely, (1) the Koran, (2) Hadis, (3) Ijmma, and (4) Qiyas. On going through the Muhammedan Law, we do not find any custom or any customary practice of law. In the instant case also we do not find anything regarding the custom, therefore, in our opinion, the law of the land so far as applicable to Muhammedans must prevail.
The concept of family settlement amongst, Muhammedans is not very common. However, instances are there when agreements are made for settling disputes between the parties by way of compromise with or without litigation. Such agreements are known as family arrangements. But these are not strictly family settlements. Life estate can be created by way of family arrangement. But such creation does riot seem to be not consistent with Muhammedan usage(?). Unlike Hindus we do not find family settlement amongst the Muhammedans. Besides, family settlement may be effected to allay disputes existing or apprehended in the interest of harmony in the family or the preservation of property. Family arrangement presupposes either an existing dispute likely to occur in future and to resolve those disputes such family arrangement can be made. It is not a transfer but a settlement by which the members of the family recognise the right, title and interest in respect of various properties belonging to the family and to enjoy the property in the manner indicated in the settlement. Such settlement can be made among the members of the family who have subsisting title to the family property. In the present case, on going through the deed of settlement we do not find that the settlement was made just to allay any dispute existed or existing. Under the deed of family settlement, the assessee, the sole owner cannot make any family arrangement with her sons and daughters, who are governed by the Muhammedan Law even though the children of the assessee are entitled to get the property by way of inheritance on the death of the assessee. At the time of making the family arrangement, the children of the assessee had no right, title and interest over the property or any part thereof. Therefore, it cannot be said that there was a family settlement for settlement of any dispute existing or that may exist among the family members. In view of the above discussions, we hold that in the present facts and circumstances the family settlement deed, dated June 9,1976, and April 21, 1980 cannot be said to be a valid family settlement in the eye of law.
In the present case, the Tribunal in its judgment in paragraph 17 observed that: "at clause 10 of the settlement deed, it has been noted that by signing of this deed all the members from an association which shall be styled as Bibijan Begum and others, while Mst. Bibijan Begum, the assessee will run and manage the affairs in connection with the properties and she in turn would appoint Md. Bahar Ali, her husband to carry out the daily affairs and supervise the construction works, etc.". The Tribunal further held that: "since the shares of the parties were defined, ascertainF9 and definite, there was no question of forming any association as each party takes his specified share". From the observation made by the Tribunal and considering the facts and circumstances of the case, in our opinion, the finding of the Tribunal was not at all necessary in the present case.
Regarding gift also, the Tribunal in paragraph 19 of its order held that: "the family arrangement effected by the parties above, was valid and sustainable and income therefrom if any, eon only be considered in the hands of those persons concerned and that being so and in view of the circumstances and in view of the different authorities, there was no question of any gift of the properties by the assessee-mother to the children ...." In our considered view, this conclusion was also not necessary in deciding the matter before the Tribunal. The Tribunal having not referred to any custom or customary practice prevailing among the Muhammedans in its order/judgment, the questions become academic, therefore, we decline to answer questions Nos. 1, 3, 4 and 5 being redundant. The question No.2 is accordingly answered in the negative, i.e., in favour of the Revenue and against the assessee.
A copy of this judgment under the signature of the Registrar and the seal of the High Court shall be transmitted to the Income-tax Appellate Tribunal.
In the facts and circumstances of the case, we make no order as to costs.
M.B.A./1332/FCOrder accordingly.