Holding

A father may validly effect a partial partition of Hindu undivided family property with his minor sons, and such partition is valid under Hindu law and must be recognised under Section 171 of the Income‑Tax Act.

Summary

The appellant, a Hindu undivided family (HUF) consisting of Apoorva Shantilal Shah, his wife and two minor sons, sought recognition of two partial partitions of shares in Gujarat Steel Tubes Ltd. under Section 171 of the Income‑Tax Act, 1961. The Income‑Tax Officer refused, and the matter progressed through the appellate hierarchy, with the Tribunal holding that such partitions were outside Hindu law and could not be recognised. The Gujarat High Court affirmed that a father could not effect a partial partition with his minor sons. The Supreme Court held that, under Mitakshara Hindu law, a father exercising patria potestas may validly effect a partial partition between himself and his minor sons, provided it is done bona‑fide, and that the Income‑Tax Act recognises partial partitions. Consequently, the partial partition was deemed valid and the Income‑Tax Officer was directed to record it and assess tax accordingly.

Issues considered

Whether a father, in exercise of his superior right or patria potestas, can effect a partial partition of HUF property between himself and his minor sons.
Whether such a partial partition is valid under Hindu law (Mitakshara school).
Whether a partial partition so effected is recognisable under Section 171 of the Income‑Tax Act, 1961.
Whether the lack of equal distribution among coparceners invalidates the partial partition.
Whether the Income‑Tax Officer may refuse to recognise a partial partition on grounds of inequality or lack of consent of minors.

Legislation cited

Finance Act (No. 2) 1980s. 171(9)
Income Tax Act, 1961s. 171, s. 256(1)

Subjects

Hindu undivided familypartial partitionpatria potestasMitakshara lawSection 171Income tax assessmentcoparcenerminor sonstax liability

Judgment

A ..;92

APOORVA SHANTILAL SHAH •
v.
COMMISSIONER OF INCOME TAX
8 GUJARAT-I, AHMEDABAD

March 3, 1983

[P. N. BHAGWATI AND AMARBNDRA NATH SEN, 'JJ.J "

c, Partial partition- lVhether the father in exercise of his right as "patrla
potestas" or otherwise can effect a pa,tial partition between himself and his minor •
so1',_s of joint family properties of a Hindu Joint Family governed by the Mitakshara
School of Hindu Law-Income Tax Act, 1961, Section 171.

The assessee is a Hind undivided Family consisting of four members,
D namely, Sri Apoorva Sbantilat Shah, his wife Smt. Karuna and their minor sons
,
Chintan and Tejat. 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 parti·
tions 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
E in respect of 1777 shares of the same company. The Ince.me 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, the remaining shares were not allotted in their entirety to the
remaining third coparcener, namely Apoorva separately or Apoorva and Smt.
Karunajointly describing them as H.U.F'. and (iii) the distribution of shares had
not been made equally either amongst the three members including the two minor
F sons or amongst the four members of the H.U.F., 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, being outside the framework of the Hindu Law could not be recognised as
valid for the purposes 6f Section 171 of the Income Tax Act. All the questions
G referred to in the reference under Section 256 (1) to the High Court were answer-
ed against the assessee. The High Court held that under Hindu Law the '
father has no power or authority to effect any partial partition of joint family
properties between himself and &his minor sons. Hence the appeal by speci~l
Jeave.

B AHowing the appeal, the Cour~
'

APOORVA SHANTILAL v. c.1.r. 493
HELD : J. I. 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, SIS 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 bis minor sQDs, whether in exercise of bis superior riaht as father or in exer-
8
cise of the right as patria poles/as has neqessarily (_to be exercised bona fide by the
father and is subject to the right of the sons to challenge the partition, if the parti-
tion is not fair and just. [Sll C·E]
•
1.3. The right of the father to bring about the disruption nf the joint
family properties in exercise pf his superior right, as fathCt" or of
patria potestas is recognised in ancient Hindu Law. [509 D-E]
his rights as c
1.4. The stand taken by the High Court to the effect that the propo,ition
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 f':ffected with the consent of the members of joint family and cannot be extended D
to a case when partial partitiori 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 bis right as patria
potestas in entitled to 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 bis -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 effc:ct the partition of
properties c.aonot be limited only to a case where the partition is tot111. 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 )hat in all such cases of partition, part.iaJ or other· fl
wise, there is bound to be a conflict of interest between the father and bis sons.
If tbe father does not 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
~eliefs lincluding a proper partition. In appropriate cases even during minority,
the minor sons through a proper guardian may impeach the validity of the parti-
tion brought ab~ut by the fathCr either in entirety of the joint family properties or G
,, only in respect of part thereof, if the partition had been effected by'(be father to
the detriment of the minor sons and to the prejudice of their interest. [SID A-HJ

Charandas Haridas v. Commissioner of Income Tax, Bombay'(1960) 39
t I. T.R. 202 (S.C.) Kalloomal Tapeswari Prasad (HUF) v. Commissiontr of Income
j Tax. Kanpur (1982) 133 l.T.R. 690 {S.C.) followed: ·
494 SUPREME COUF:T REPORTS [19831 2 S,C.R.

A 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 defini·
tioo of partial partition in Explanation (b) filakes 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 F·G]

B 2.1. A partial partition of any joint family property by the·father between
himself and his sons does not become inva1lid on the ground that there bas 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 bana fide
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
c such partial partition, be can always challenge the validity of such partial parti·
tion in an appropriate proceeding and the validity of such partial partition will
necessarily have to be adjudicated upon in the proceeding on a proper considera-
tioil of an 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. [515 D-FJ

D 2.2. It is not open to the Income-tax Authorities to consider a partial
partition to be invalid on the ground that shares b3.ve not been equally divided
apd to refuse to recognise the same. It is uodoubted_ly open to the: Income-tax
Officer before recognising 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, be will be perfectly
within his right to refuse to recognise the same. [515 F-GJ ·
B
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 ha~ not
been acted upon. As there is no finding that the partial partition is sham or ficti·
tious or not a genuineione, on enquiries made by the Income-tax Officer, and as
the partial partition is otherwise valid under the Hindu Law1 the partial partition
baS 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, 5,16 A-BJ

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 35 of
1982
G .,
Appeal by Special leave from the Judgment and Order dated
the 9th July, 1981 of the Gujarat High Court in Income Tax Refer-
ence No. 28 of 1980.

P.H. Parekh, Harlsh Salva and Gautam Philip for the Appel-
J,.nt.
APOORVA SHANTILAL v. C.l.T. (A.N. Sen, J.) 49S

S.C. Manchanda, Anii·Dev Singh and Miss A. Subhashini for A
the Respondent.

The Judgment of the Court was delivered by

AMARENDRA NATH SEN, J. The principal question for decision B
in this appeal by Special Leave is whether 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 proper-
ties of a Hindu joint family governed by the Mitakshara School of
Hindu Law.
c
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) bis wife Smt. Karuna and their minor sons (3)
) Chin tan and 4) Tejal, is the appellant before us. The members of the
H.U.F. are governed by the Mitaksbara School of Hindu Law. The
D
assessment year in question is the year 1975-76. During the assess-
ment pertaining to the assessment year under consideration, Sbri
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), claim-
ing that two partial partitions had taken place amongst the members
E
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.

F
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, G
after making certain allocations in favour of the two minor sons were
not allotted in their entirety to the remammg . third coparcener,
n•mely, Sbri 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 H
made at th~ .instance of the minor children, as this course would re-
quire the apprQY!!l ()f the <;:ourt b11t the s~me l!ad been purported to
496 SUPRBMB COURT RBPORTS (1983) 2 S.C.R.

A have been m.ade 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.F., as Apoorva's wife
Karuna also became entitled to an equal share on partition between
the father and the sons.
B
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
c between the coparceners in respect of the said shares. The A.A.C.
held that it was not necessary to obtain courCs sanction even in a
case where some of the parties to the partition were minors. As regards
the point that the distribution of shareholdings 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
D equally made. The A.A.C. further observed that even if the distri·
bution 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.

E 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 recogni·
tion of the said partitions. The Tribunal held for reasons recorded in
the order that partial partitions in the instant case were out,ide the
framework of the Hindu Law and as such they could not be recogni·
F sed as valid for the purposes of S. 171 of the Act. In that view of the
matter the Tribunal . set asideihe 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 follow-
G ing question to the High Court :-

(I) Whether on the facts and in the circumstances of
the'.case, the Tribunal was!right in holding that Shri Apoorva
H Shantilal could not himself have given consent on behalf
of his minor sons to the partitions proposed b:y him in bis
individual
. . . ' as' father 7 ·
capacity .
APOORVA SHANTILAL P. C.l.T. (A.N. Sen, .1.) 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 recognised as valid for the purpose S
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 c
of the Income-tax Act, 1961 ?

(5) Whether on the facts and in the circutnstances 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 bad exercised. his patria potestas?

(6) Whether the Income-tax Department is competent
to challenge the exercise of patria potestas by a Hindu
father in respect of coparcenery property, making a partial
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 p
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. (') there was no decision of any court on the point.
The High Court also considered other decisions and books and
' treatises on Hindu Law. The Higb,Court held that on a consideration G
of the authorities, the following propositions were established :.

I. From the. stand point of ancient Hindu Law, what
was recognised was only a paflition in respect of all the H

(I) (1979) 1161.T.R. sn"
498 SUPREME COURT 'REPORTS 11983) 2 S.C.R.

A 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 distruption of joint status) held as tenants-in
common.
•
B 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.

c 3. Partial Partition in the sense of division of some of
the properties whilst continuing the status of HUF in res-
pect of other items of property originally belonging to the
HUF came to be recognised only later on by evolution of
custom and by judge-made law.

D 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 'pro·
perties except by consent of all the coparceners.

5. In respect of a joint family consisting of a father
F and bis sons, the traditional Hindu Law recognised the
right of a father in his capacity as patria protestas to exer-
cise his extraordinary power to disrupt the Status of HUF
and to divide bis sons inter se without their consent subject
to the rider that 'all' assets of the HUF were subjected to
partition.
G
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
H se is a survival of the patria potestas and may be exercise<l
APOORVA SHANTILAL v. C.I.T. (A.N. Sen, J.) 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."
B
'1. There is nothing in (I) either ancient Hindu Law or
(2) cµstomary 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
bee.o contended on behalf of the assessee is that whilst there
D
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 res-
E
pect of only some items of property it is required to be
'' inferred by implication. Io 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 F
terms, it follows as a necessary corollary."

The High Court noted that this contention has been nega-
tived by the Madhya Pradesh High Court in the case of Gopalda1
(supra) and the High Court for reasons recorded in~the judgment G
rejected this contention. The High Court further held that the
transaction in question was in any event invalid in the facts and in
the circumstances of this case.

H
Aggrieved by the judgment of the High Court, the assessee
with special leave granted by this Court has preferred this appeal.
500 SUPREME COURT REPORTS (19831 2 s.c.R

A 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 a Hindu undivided family
consisting of himself, bis wife and minor sons who are governed
B
by the Mitakaslira 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 parti-
tions were invalid.

c Mr. Desai learned counsel appearing on behalf of the appellant
bas advanced the following arguments.

!. According to the Mitakshara 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 bis sons provided that
D 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 Kandaswami v. Doraisami, Ayyar.(') ·

E 2. A father in any SU•ch case of ancestral property has the
power to separate frcm 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 neces-
sary for the exercise of that power whether they are majors or
minors. In this connection reference is made to para 323 of Hindu
F Law by D.F. Mulla and para 458 at p. 559 of Mayne's Hindu Law
(lithe Edn.).

Para 323 of Mulla's Hindu Law, II th Edn. at page 443 and
444 reads as follows :- '

G "The father of a joint family bas the power to divide
the family property at any moment' during his life, pro- ••
vided 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.
H The consent of the som1 is not necessary for the exercise

(I) 1.L.R. (1880) 2 Mad. 317,
APOOilVA SHANnLAL v. C.I.T. (A.N. Sen, J.) 501

of that power. But a grandfather has no pow.er to bring
about a separaration 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 :- B

"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 C
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 com- D
pel the others to become separate amongst themselves. A
father may separate from all or from some of bis sons,
remaining joint with the other sons or 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 ll
separation between either of the coparceners and his own
sons."

3. So extensive and wide is this patriarchal power of the
father that it bas 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 Bhau Patil,(') and to the decision of the
Madras High Court in the case of Venkataswara Pattar v. K.
Mankayammal.(') G
4. S. 171 of the Income-tax Act, 1971 and S. 25A of the earlier
Act 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 experessed in deci· H
(1) A.J.R. 1!126 Born. 160.
(2) A.l.R. 1933 Mad. 775,
S02 SUPREME COUU llBPOltTS (1983] 2 s.c.ll.

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 remain- \_
ing undivided and the income of the property partitioned would be
B 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 iu the case of Charandas Haridas v.
C.I.T. Bombay. (1)
c
5. This power of the father has been described as bis "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 powc:r of the father even in the context
of minor sons could not take into its purview the lesser power to
D
partition only some of the family properties without disrupting
the status of the members of the joint family as regards other pro-
perties 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,(') when it speaks of partial partition of the
F joint family by agreement of tbc 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.
G
Mr. Manchanda learned counsel appearing on behalf of the
department, bas advanced the following arguments :

B (!) [1960] 39 I. T.R. 202.
(2) [1866] 11 M.I A. 7,,
•

APOORVA SHANTILAL 1•. c.I.T. (A.N. Sen, 1.) 503

I. Under ancient Hindu Law, partial partition was unknown.
A
Severence of status disrupted the family. The joint family foeed not
, necessarily have any property. If it has property, then its separa-
tion is only an incidence of the severence of status.

I 2. Partial partition is judge-made law and the earliest case B
where this was mooted was in 1846 in the case of Rewun Prashad v.
Radha Beeby.( 1) 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 Hindu Law and Usage for
contending that agreement between the parties is a sine qua non.
c
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. D
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 parti-
tion of a HUF effected after 31.12.78 will be de-recognised for
income-tax purposes and this sub-section bas been incorporated
E
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 parti-
tion 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 G
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. H

(2) (1846] 4 M.J.A. 137@ 165.
S04 SUPREME COURT REPORTS !1983) 2 S.C.R.

A We shall now proceed to consider the decisions which appear to
us to have 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
B cited before the High Court. The material facts of this case may be
briefly noted ;-

Charandas Haridas WllS the Karta of a Hindu undivided fall!ilY
consisting of his wife, Shantabcm, three sons and himself. He was a
c partner in six managing agcmcy firms in six mills. In previous years
the income received by him as partner in these Managing Agencies
was being assessed as the inc:ome of the Hindu undivided family. On
December JI, 1945, CharandaLS Haridas acting for bis three minor
sons and himself and Shantaben bis wife, entered into an oral
agreement for partial partition. By that agreement Cbarandas
D Haridas gave one pie share to bis daughter Pratibba in the manag-
ing 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, bis wife and sons. This agreement was to
come into effect from !st January, 1946 which was the beginning
E of a fresh accounting year. On I Ith September, 1946 Cbarandas
Haridas acting for himself and bis 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
bad taken place orally earlier. In the assessment year 1947.4g and
1948-49, Cbarandas Harida.s <olaimed that the income should no
F longer be treated as income of Hindu undivided family but as
separate income of the divided members. The Income-tax Officer de-
clined to treat the income as any but of the Hindu undivided family,
and assessed the income as before. An appeal to the Appellate
Assistant Commissioner was unsuccessful and the matter was taken
G to the Income-tax Appellate Tribunal. The Tribunal held that by
the document in question, the di vision, 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 change whatever as a result of the alleged
H partition." The Tribunal, ther·efore, held that the arrangement to
share the receipts from this source of income was not binding on
APOORVA SHANTILAL v. C.l.T. (A.N. Sen, J.) 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 a•sessment 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 :
8
"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 ?"

c
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 intend-
} ed by it. According to the High Court the Tribunal was right in
holding ·that the document was ineffective and though the income D
might have been purporte.d 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 accor-
dingly 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 a ssets were con- E
cerned, they still belonged to the Hindu undivided family. The assessee
Cbarandas 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 Apoovier 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. '{he produce is
no longer to be brought to the common chest, as repre-
senting the income of an undivided property, but the
G
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 SUPREMB COURT RBPOl!.T~ [1983] 2 s.c.a.
•
A "In our opinion, h"re there are three different branches
of law to notice. There iis 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
B income may be treated as the income of the Hindu undivi-
ded family or as the income of the separated members
enjoying separate shares by partition. The fact ofa parti-
tion in the Hindu Law· may have no effect upon the posi-
tion of partner, in so far as the law of partnership is
c concerned, but it has full effect upon the family in so far
as the Hindu Law is concerned. Just as the fact of 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 partuers. The Income-tax law
D before the partition takes note, factually, of the position
of the karta, and assess1!e 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
E 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 or a Hindu
undivided family. There is nothing in the Indian Incom-tax
law or the law of partnership which prevents the members
F 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
G 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 contem-
plate that a person should do the impossible. Indeed, the
result would have been the same, even if the dividing mem-
H bers had said in so many words that they had partitioned
APOORVA SHANTILAL v. C.l.T. (A.N. Sen, J.) 507

the assets, because in so far as the firms were concerned. A
.I the step would have been wholly inconsequential."
)

___/
This Court further observed at p. 209 :-
)

"No doubt, there were many modes of pariition which
B
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
c
into separate interests. There is no suggestion here that
this division was a mere pretence nor hao the Appellate
Tribunal given such a finding. The docur....ent was fully
effective between the members of the famil:', and there was
actually no Hindu undivided family in respect of tnese
particular assets."
.o
In the case of Kal/oomal Tapeswari Prasad (HUF) v. Commi!J-
sioner of Income-tax, Kanpur('), this Court observed at p. 702 :-

"Under Hindu Law partition may be either total· or . l!l
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 !Jas been a partition, it
is presumed that it was total one both as to the parties
and property but when there is a part:tion between
brothers, there :s no presumption that 'there has been parti- F
tion 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
G
the partition to be partial either as to persons or as to pro-
perties 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

\J) [1982] 133 I.T.R,. 690,
508 SUPREMJB COURT REPORTS [198312 s.c.a.

remaining family property. After such partial partition the
righfof inheritance and alienation differ according as to
property in question belongs to the members in their divid-
ed or undivided capacity. Partition can be brought about,
(I) by a father during his life time between himself and bis
sons by dividing equally amongst them, (2) by agreement,
B 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
c v. Commissioner of bzcom.,-tax, U.P.( 1) a division Bench of the
Allahabad High Court also recognised the validity of partial
partition.• R .S. Pathak, J. (as
I
bis 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 !st July, 1961.
D •
• It may be noted that in the case of Charandas Haridas (supra)
decided by this Court and in the case of Mori/al Sham Sunder (supra)
decided by the Allahabad High Court to which we have just refer-
red, all the sons were minor.

E 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 apppearing
at p. 18 in 'Mitacshare and Daya-Bhaga-Two Treatises on the
Hindu Law of Inheritance translated by H.T. Colebrooke, Bsq.,'
in Ch. I, sec. II (2) :-
F
"When a father wishes to make a parti!ion, he may
at his pleasure separate bis children from himself,
whether one, two or more sons".

In . 'History of Dharmashastra' by Sbri P.V. Kane (second
G Edition, 1973) Vol. III at p. :592, it bas been stated:-

"The Manager is called Karla in modern times
though the smritis and digests employ words like Kutumbin
(Yaj II. 45), Grhin, Grhapali, Prabhupa Kat. 543) and not
H Karta. He has special powers of disposition (by mortgage,

(1) [1972] 84 I.T.R. 186.
'

APOORVA SHANTILAL ¥. C.l.T. (A.N. Sen, J.) 509

sale ot gift) of family property' in a season of distress (for A
debts), for the purposes and benefit of the family (mainte-
J'
) nance, 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 B
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 c
do not, therefore, . consider it necessary to refer to the comments
of the other learned authors placed before us in course of the hear-
ing of the appeal.

The various commentries on Hindu Law by the various learned D
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 tbe joint
family properties 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 E
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 Jaw. 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 G
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 vjew expressed by the
Hi$h Court, · · · fl
510 SUPRl!MB COURT REPORTS [1983) 2 S.C.R.

A If the father in execise of his superior right or of his right as
patria potestas is enttitled 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
B major, we see no reason to limit the power or authority of the
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
c 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
D the will of the minor sons and when partial partition under the
Hindu Law is now accept,ed and recognised as valid by judicial deci-
sions, 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 bet-
E
ween himself and his minor sons if the father in the interest of the
joint family and its memlbers feels that partial partition of the pr<l·
perties will be in the best interest of the joint family and its mem-
bers including the minor sons. Even if the test of consent is to
apply, the father as the natural guardian of the minor sons will
F normally be in a position to give such consent and it cannot be
said as a matter of universal ;ipplication that in all such cases of
partition, partial or other\\'.ise, 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 pro.
perties between himself and his minor sons, whether wholly or
G 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
H or only in respect of part thereof, if the oartition had been effected
by the father to the detriment of the minor sons and to the pre-
judice of their interests.
APOORVA SHANTILAL v. C.l.T. (A.N. Sen, J.) 511

We may point out that in the case of Charandas Haridas to
A
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 B
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 c
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 D
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 pro-
perties 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 challange the partition if the E
partion is not fair and just.

S. 171 of the Income-tax Act, 1971 provides as follows :

(I) A Hindu family hitherto assessed as undivided shall F
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.
i
G
(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 parti-
tion, 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 lb~ members of the familr.
SIZ SUPllEMB COUllT REPORTS [1983] 2 s.c.R.

(3) On the completion of the enquiry, the IBcome- ..,_
tax Of(icer shall record a finding as to whether there has
been a total or partial partition of the joint family pro-
perty, and, if there has been such a partition the date on
which it has taken plac:e.

B (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 repect of the
c period up to the date of partioo shall be assessed as if
no partion 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
D (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 bas
been recorded by the Income tax Officer under this section,

E
and the partition took place after the expiry 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) Notwithstandi11g anything contained in this section
F if the Income-tax Offii:er 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
G severally liable for the tax on the income so assessed :

(7) For the purposes of this section, the several
liability of any membeir or group o! members thereunder
H shall be computed according to the portion of the joint
family property allotted to him or it at the partition,
wl!ether total or partial.
APOORVA SHANTILAL •• c.J.T. (A.N. Sen, J.) 513

(8) The provisions of this section shall, so far as may A
be apply in relation to the levy and collection of any penal-
ty, interest, fine mother 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.
r 8

Explanation : In this section.-
c
(a) "partition" means -

(i) where the property admits of a physical division,
a physical division of the property, but a physi-
cal division of the income without a physical D
0
division of the property producing the incomc
shall not be deemed to be a partition ; or

(ii) where the property does not admi~ of a physical
division then such div:lion as the property
admits of, but a mere sevence of status shall E
not be deeemed to b~. a partition ;

(b) "partial partition" means a partition which is
pratial as regards the persons constituting the
Hindu undivided family, or the properties be- F
longing to the Hindu undivided family, or
both .

•• It may· be noted that the following further prov1Sion was
included in the said section as sub-section (9) by the Finance
(No. 2) Act, 1980 w. e. f. !st April, 1980 :- G

(9) Notwithstanding anything contained in the forego-
ing 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
·u
as undivided :-

_,..._ -- - ...,, __ .
514 sffPREM!l COURT REPoRTS (1983J i s.c.li.

' (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
B day of June, 1980 being the date of introduction
of the Finance (No 2) Bill 1980, shall be null and
void;

(b) such family shall continue to be liable to be asses·
c sed under this Act as if no such partial parti·
t ion 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
D 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
I 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.
F This sub-section (9) wa.1 not in existence at the relevant time
and has no retrospective operation and it is of no material conse·
quence in deciding the present case.

The aforesaid provisions of the Income-tax Act, as they
stood at the material time, clearly recognise partial partition.
G The definition of partial partition in explanation (b) makes it clear
that partial partition as regards the persons constituting tbe Hindu
undivided family or as regards properties belonging to the Hindu
undivided family, or both, is recognised.
ff
In the present case, the partial partition of the shares belong·
ging to the Hindu undivided family cannot, therefore, be said to
Ai'Cl6RVA SHANtILAL v. C.l.T. (A.N. Sen, J.) 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 . joi?t
) family properties of the Hindu joint family by the father was mvahd
and could not be recognised under the Income-tax Act. The sub·
sequent amendment of section 171 by the inclusion of su~·section
(9) does not require any consideration as the said sub·sectton was
8
not in existence in the relevant assessment year and is only operative
from !st April, 1980.

The other question which falls for determination is whether C
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 equal- [}
ly taking into consideration the shares which had earlier been distri-
buted 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 bona fide in the interest of the joint family and E
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 .F
proceeding on a proper consideration of all the facts and circum-
stances 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 the ground that shares G
have not been equally divided and to refuse to recognise the same.
It is undoubtedly open to the Iocome·tax Officer before recognising
the partion to come to a conclusion on proper enquiry whether the
partition is genuine or not. If the Income-tax Officer on enquiry
I•
comes to a finding that the partition is sham or fictious, be will be 8
perfectly within his right to refuse to recognise the same. Io the
instant case, there is no finding that the partial partition is sham or

------ --
SuPIBME cotJll.T REPORT' (1983] 2 s.".I!·
A fictitious or that the partial partition is not a geoioue one and has
not been acted upon. As there is no finding that the partial parti-
tion is sham or fictitious or not a genuine one, oa enquiries made
by the Income-tax Officer, and as the partial partition is otherwise
, valid under the Hindu Law, the partial partition bas necessarily
to be recognised under the provisions of S. 171 of the Income-tax
8 Act and the assessment must be necessarily made on the basis that
there is partial partition of thu 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 c+-' '
c same and to proceed to make the assessment on the basis that
there bas 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.

D S. R. Appeal allowed.