Appeals Nos 322 and 25 of 1955
Appeal from the judgment and order dated April 13 1954 of the Nagpur High Court in Miscellaneous Civil Case No 71 of 1956 and appeal from the judgment and order dated August 26 1952 of the Punjab High Court in Civil Reference No 11 of 1952
C K Daphtary Solicitor General of India G N Joshi and R H Dhebar for the appellant in CA No 322 of 1955 and respondent in CA No 25 of 1955
R J Kolah J B Dadachanji section N Andley and Rameshwar Nath for the respondent in CA No 322 of 1955
G section Pathak and M L Kapur for the appellant in CA No 25 of 1955
May 17
The Judgment of Bhagwati and JL Kapur JJ
was delivered by Bhagwati J SK
Das J delivered a separate judgment
BHAGWATI J
These two appeals with certificates under Section 66A 2 of the Indian Income Tax Act hereinafter referred to as the Act raise a common question of law and will be governed by this common judgment
3 The facts leading up to these appeals may be shortly stated as under
Prior to October 18 1944 one Rai Bahadur Narsingdas Daga since deceased his wife Shrimati Sodradevi the assessee and his three major and three minor sons constituted a joint and undivided Hindu family
There was a severance of joint status between the erstwhile members of the said joint family on October 18 1944 and the joint family properties were accordingly partitioned
On such partition the business of the Spinning and Weaving Mills and agency shop at Hinganghat fell to the share of the assessee and her three major and three minor sons
A partnership was entered into between the assessee and her three major sons for the purpose of carrying on the business of the Spinning and Weaving Mills and the agency firm at Hinganghat
The three minor sons of the assessee were admitted to the benefits of the partnership
The genuineness of the partnership was not disputed
The only question which arose for the consideration of the Tribunal was whether the income falling to the share of the three minor sons was liable to be included in the total income of the assessee
Oil a construction of section 16 3 a ii of the Act the Tribunal held that the income falling to the shares of the three minor sons of the assessee was liable to be included in her total income
The assessee thereupon applied to the Tribunal for a reference to the High Court of Judicature at Nagpur of the question of law arising out of its order under section 66 1 of the Act and the Tribunal submitted a statement of case referring the following question of law for the determination of the High Court  Whether on a true construction of the provisions of section 16 3 a ii of the Indian Income tax Act 1922 the income of the three minor sons of the assessee is liable to be included in her total income
 The High Court heard the reference and came to the conclusion that it was not the intention of the Legislature to include in the income of the mother the income of her minor children arising from the benefits of partnership of a firm in which the mother is a 4 partner and accordingly answered the referred question in the negative
The High Court however granted the necessary certificate under section 66A 2 of the Act to the Commissioner of Income tax Madhya Pradesh and Bhopal and hence Civil Appeal No 322 of 1955 before us
One Ishwardas Sahni who died on November 7 1946 was a partner in the firm of Messrs Ishwardas Sahni  Bros The firm s accounting year ended on March 31 1947
The said Ishwardas Sahni left him surviving his widow Damayanti the assessee and two minor sons
The assessee became a partner in the said firm which also admitted her two minor sons to the benefits of the partnership
The Income tax authorities included the minor sons  shares in the reconstituted firm s profits in computing the income of the assessee on the ground that  individual  in section 16 3 a ii of the Act meant an individual person of either sex
The Income tax Appellate Tribunal held that the word individual must be taken as referring only to a male assessee wherever that occurred in section 16 3 and directed the deletion from the assessee s income of the shares of her minor sons in the profits of the firm
At the instance of the Commissioner of Income tax Delhi the Tribunal referred to the High Court of Punjab at Simla the question of law arising out of its order under section 66 1 of the Act together with a statement of case
The referred question was  Whether the word  individual  in Section 163 a ii of the Income Tax Act 1922 includes also a female and whether the shares of the two minor sons of Shrimati Damayanti Sahni in the profits of the re constituted firm of Messrs Ishwardas Sahni and Brothers should be included in the income of Shrimati Damayanti Sahni in assessing her income profits and gains
 The High Court heard the reference and following the decision given by the High Court of Allahabad in Shrimati Chanda Devi vs The Commissioner of Incometax 1 answered the referred question in the affirmative
1 5 The assessee obtained the requisite certificate under section 66A 2 of the Act from the High Court and that is how Civil Appeal No 25 of 1955 is before us
The common question of law which we have to determine in these appeals is whether the word  individual  in section 16 3 a ii of the Act includes also a female and the income of the minor sons derived from a partnership to the benefits of which they have been admitted is liable to be included in the income of the mother who is a member of that partnership
Section 163 of the Act provides  In computing the total income of any individual for the purpose of assessment there shall be included a so much of the income of a wife or minor child of such individual as arises directly or indirectly ifrom the membership of the wife in a firm of which her husband is a partner iifrom the admission of the minor to the benefits of the partnership in a firm of which such individual is a partner iiifrom assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart or ivfrom assets transferred directly or indirectly to the minor child not being a married daughter by such individual otherwise than for adequate consideration and bso much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both Section 3 of the Act may also be referred to in this context and it runs as follows Section 3
Charge of Income Tax  Where any Central Act enacts that income tax shall be charged for any year at any rate or rates tax at that rate or those rates shall be charged for that year in accordance with and subject to the provisions of this Act in respect of the total income of the previous year of every individual Hindu undivided 6 family company and local authority and of every firm and other association of persons or the partners of the firm or the members of the association individually
 The same description of the assessee is also to be found in section 4A which deals with residence in the taxable territories section 48 dealing with refund and section 58 dealing with the charge of super tax
The word assessee is wide enough to cover not only an individual but also a Hindu undivided family company and local authority and every firm and other association of persons or the partners of the firm or the members of the association individually
Whereas the word  individual  is narrower in its connotation being one of the units for the purposes of taxation than the word  assessee  the word  individual  has not been defined in the Act and there is authority for the proposition that the word  individual  does not mean only a human being but is wide enough to include a group of persons forming a unit
It has been held that the word  individual  includes a Corpora tion created by a statute eg a University or a Bar Council or the trustees of a baronetcy trust incorporated by a Baronetcy Act
It would also include a minor or a person of unsound mind
If this is the connotation of the word  individual  it follows that when section 163 talks of an individual it is only in a restricted sense that the word has been used
The section only talks of  individual  capable of having a wife or minor child or both
It therefore necessarily excludes from its purview a group of persons forming a unit or a corporation created by a statute and is confined only to human beings who in the context would be comprised within that category
The Revenue urges before us that the word  individual  as used qua human beings is capable of including within its connotation a male as well as a female of the species and having regard to the context in which the word has been used in section 163 it should be construed as meaning a male of the species when used in Juxtaposition with  a wife  and as meaning both a male and a female when used in juxtaposition with minor child so that when section 163 talks of 7 such individual in sub cls
ii and iv of cl
a thereof it refers to both a male and a female of the species so as to include within its compass not only a father of the minor child but also a mother
The assessees on the other hand contend that the word  individual  used in section 163 is not used in its generic sense but is used in a restricted and narrower sense as connoting only human being and if it is thus restricted there is ample justification for restricting it still further to the male of the species when regarded in the context of section 163
Sub clauses i to iv of cl
a are specific cases where the income of a wife or a minor child of such individual arising directly or indirectly from the several sources therein indicated is to be included in computing the total income of the individual for the purpose of assessment and the word could not have been Used in a different sense for the purposes of sub cls
i and iii and sub cls
ii and iv of cl
The word  such individual  as used in sub cl
a can only have been used in one sense and one sense only and if that is the sense in which it could have been used  such individual  should be one who is capable of having a wife or minor child or both and that individual can only be a male of the species and not a female
The question for our determination is a very narrow one and it turns on the construction of section 163 of the Act
The High Court of Madhya Pradesh plunged headlong into a discussion of the reasons which motivated the Legislature into enacting section 16 3 by Act IV of 1937 and took into consideration the recommendations made in the Income Tax Enquiry Report 1936 and also the statement of objects and reasons for the enactment of the same without considering in the first instance whether there was any ambiguity in the word individual  as used therein
It is clear that unless there is any such ambiguity it would not be open to the court to depart from the normal rule of construction which is that the intention of the Legislature should be primarily gathered from the words which are used
It is only when the words used are ambiguous that they would stand to be examined and 8 construed in the light of surrounding circumstances and constitutional principle and practice Per Lord Ashbourne in Nairn vs University of St Andrews1
In the latter event the following observations of Lord Lindley M R in Thomson vs Lord Clanmorris2 would be apposite  In construing any statutory enactment regard must be had not only to the words used but to the history of the Act and the reasons which led to its being passed
You must look at the mischief which had to be cured as well as at the cure provided See also the observations of Goddard C J in B vs Paddington and St Marylebone Rent Tribunal 3
The position in law has been thus enunciated in the judgment of Das Actg
CJ as he then was in the Bengal Immunity Company Limited vs The State of Bihar 4   It is a sound rule of construction of a statute firmly established in England as far back as 1584 when Heydon s Case 5 was decided that   for the sure and true interpretation of all statutes in general be they penal or beneficial restrictive or enlarging of the common law four things are to be discerned and considered 1st
What was the common law before the making of the Act
 2nd
What was the mischief and defect for which the common law did not provide
 3rd
What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth and 4th
The true reason of the remedy and then the office of all judges is always to make such construction as shall suppress the mischief and advance the remedy and to suppress subtle inventions and evasions for continuance of the mischief and pro privato commodo and to add force and life to the cure and remedy according to the true intent of the makers of the Act pro bono publico  1  2  725 3  203
4  632
5   76 ER 637 9 In In re Mayfair Property Company 1 Lindley M R in 1898 found the rule  as necessary now as it was when Lord Coke reported Heydon s case 
In Eastman Photographic Materials Company vs Comptroller General of Patents Designs and Trade Marks 2 Earl of Halsbury re affirmed the rule as follows  My Lords it appears to me that to construe the statute now in question it is not only legitimate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise and to the later Act which provided the remedy
These three things being compared I cannot doubt the conclusion
 The High Court of Punjab based its conclusion primarily on the use of the word or between the word wife and the words minor child in section 163a of the Act and it was of opinion that these words were used disjunctively and the individual referred to in section 163 a of the Act may have a wife and minor child or may not have a wife but have a  minor child 
If the individual assessed to income tax is a female that individual will have no wife but she may have a minor child and therefore section 16 3 a of the Act does not imply that the individual must necessarily be a male
The argument based on the disjunctive user of the word wife and the words minor child is capable of being summarily disposed of
Even if the words such individual in section 16 3a of the Act meant only a male of the species the word wife and the words minor child could only have been used with the word or in between
A male of the species may
not necessarily have both a wife and a minor child
He may have a wife but no minor child
He may have a minor child but may have no wife at the relevant period
If therefore provision had to be made for the inclusion of the income of a wife or minor child or both in the total income of a male of the species the word or was absolutely necessary to be interposed between the word wife and the words minor child
To construe the word or as disjunctive between the word wife and 1  35
2  576
10 the words minor child does not necessarily lead to the conclusion that the words such individual were used for both a male and a female of the species and were necessarily inconsistent with the user of those words for the male of the species if the context otherwise lead to that conclusion
The reasoning adopted by the learned Judges of the High Court of Punjab therefore does not clinch the matter
We have therefore got to examine whether the use of the word individual in section 163 a of the Act is in any manner ambiguous
The opening words of section 163 talk of any individual whose total income has got to be computed for the purpose of assessment and the words such individual used in section 163 a have reference only to that individual
That individual must be an assessee and it is in the computation of his total income for the purpose of assessment that the income of the persons mentioned in cls
a and b have got to be included
Sub clause a refers to two distinct sets of persons bearing a relationship with such individual the assessee
One is a wife and the other is a minor child
The case of the wife is dealt with in sub cls
i and iii and the case of a minor child is dealt in sub cls
ii and iv
Sub clauses i and iii use the word her husband or the husband in place of the words such individual with reference to the income derived by the wife in the circumstances therein mentioned though it may be observed that the user of the words such individual would not have made the slightest difference to the position
Subclauses ii and iv which deal with a minor child use the words such individual in relation to the minor child whose income under the circumstances therein mentioned has to be included in computing the total income of such individual for the purpose of assessment
Whereas the words used in sub cls
i and iii are specific and refer only to her husband and the husband as such individual the words used in sub cls
ii and iv leave it indefinite as to which is meant by the words such individual whether a male andor a female of the species
If the words used in all these four sub clauses were to be 11 harmoniously read and the two cases which are mentioned in sub cls
i and iii are not to be read differently from the cases mentioned in sub cls
ii and iv the only way in which the words such individual as used in sub cls
ii and iv could be understood would be to read them as confined to a male of the species and not including the female
If these words such individual as used in sub cls
ii and iv are thus read restricted to a male of the species all these sub clauses would have reference only to the male of the species irrespective of the fact that the words her husband and the husband have been used in sub cls
i and iii instead of the words such individual
If the words such individual had been used in sub cls
i and iii as they have been used in sub cls
ii and iv the position would have been just the same because in that event also we would have had to determine whether there was any justification for reading the words such individual used with reference to sub cls
i and iii in any different sense from the same words such individual as used in sub cls
ii and iv
The crux of the question therefore is whether the words such individual used in the opening part of section 16 3 a are used to mean a male of the species when they are read in juxtaposition with the words a wife and are used to mean both a male as well as a female of the species as the case may be when used in juxtaposition with the words minor child
If that was the intention of the Legislature there was nothing to prevent it from dividing cl
a into two sub clauses whether they were numbered a and ai or a and b respectively
The Legislature could as well have enacted the provisions in the manner following aso much of the income of a wife of such individual as arises directly or indirectly ifrom the membership of the wife in a firm of which her husband or such individual is a partner or iifrom assets transferred directly or indirectly to the wife by the husband or such individual 12 otherwise than for adequate consideration or in connection with an agreement to live apart ai or b so much of the income of a minor child of such individual as arises directly or indirectly  ifrom the admission of the minor to the benefits of the partnership in a firm of which such individual is a partner or iifrom assets transferred directly or indirectly to the minor child not being a married daughter by such individual otherwise than for adequate consideration
If these provisions had been enacted in the manner aforesaid it would have been possible to urge as has been urged before us by the Revenue that cl
a referred only to a male of the species who only could have a wife and cl
ai or b referred to a male andor a female of the species
The Legislature however chose to adopt a peculiar mode of enactment either for the purpose of economy of words or structural beauty and mixed up both these sets of provisions into the enactment of cl
a of section 163 of the Act as it stands at present
It rolled in both these sets of cases and used the words a wife or minor child of such individual raising thus the question of construction which has got to be determined by us
Such individual as is talked of in section 163 a may have a wife may have a minor child or may have both a wife and a minor child
When such individual is thought of in connection with a wife it can only be a male of the species but when such individual is thought of in connection with a minor child it can be both a male as well as a female of the species though of course when such individual is thought of in connection with both then again it would have to be a male of the species and certainly not a female
Such an interpretation would lead to the interpretation of the same words such individual as meaning two different things in two different contexts
They would mean one thing when used in relation to a wife and would mean another thing when used in relation to a  minor child
They would be capable  of being understood in a narrower sense when used in connection with a wife and would be capable of being 13 understood in a wider sense when used in connection with a minor child
One may as well question the elegance or the propriety of such user of the words such individual where the words as the case may be are necessarily to be imported in order to understand the true import of these words when again they are used not in different parts of the same section but at one place only
If one turns to section 16 3 b the words used therein are transferred  by such individual for the benefit of his wife or a minor child or both
There is the indefinite article a used before the words minor child
If that indefinite article a had not been used the expression would have run for the benefit of his wife or minor child or both thus leaving no doubt at all that in cl
b at least the words such individual meant only a male of the species
It is urged however that the use of the indefinite article a shows that the words his wife and minor child mid both have been used disjunctively and should be read in the same manner as in section 163a of the Act
The words  his wife  would appropriately go with a male of the species but the words a minor child would appropriately go with a male as well as a female of the species though the word both could only be appropriate in relation to a male of the species and not a female who can have a minor child but not both a wife and a minor child
The same want of elegance or propriety can be predicated of this expression also and the use of such expressions both in section 16 3a and section 16 3b raise questions of construction whether what was meant by the Legislature was only a male of the species in both these contexts or a male andor female of the species as the case may be applying one or the other in accordance with the circumstances attendant upon the computation of the total income of  any individual  for the purpose of assessment
We are of opinion that the very manner in which all the four sub clauses have been grouped together in section 16 3 a and the manner in which the expression for the benefit of his wife a minor child or both is used in section 16 3 b renders the words any individual 14 or  such individual  ambiguous
There is no knowing with certainty as to whether the Legislature meant to enact these provisions with reference only to a male of the species using the words any individual or  such individual  in the narrower sense of the term indicated above or intended to include within the connotation of the words any individual or  such individual  also a female of the species wherever appropriate which would of course only be possible in the cases contemplated in sub cls
ii and iv of section 16 3a and in one of the three cases contemplated in section 16 3b
The Legislature certainly was guilty of using an ambiguous term in enacting section 16 3 of the Act as it did
In order to resolve this ambiguity therefore we must of necessity have resort to the state of the law before the enactment of the provisions the mischief and defect for which the law did not provide the remedy which the legislature resolved and appointed to cure the defect and the true reason of the remedy within the meaning of the authorities referred to above
Before the enactment of section 16 3 of the Act by the Indian Income tax Amendment Act 1937 IV of 1937 there was no provision at all for the inclusion of the income of a wife or a minor child in the computation of the total income of  any individual  for the purpose of assessment
Whatever may have been the income of a wife from her membership in a firm of which her husband was a partner or from assets transferred directly or indirectly to her by her husband otherwise than for adequate consideration or in connection with an agreement to live apart her income was not included in the income of her husband in computing the total income of the husband for the purpose of assessment
Similar was the position in the case of income derived by a minor child from the admission of the minor to the benefits of partnership in a firm of which such individual was a partner or from assets transferred directly or indirectly to the minor child not being a married daughter by such individual otherwise than for adequate consideration
The income derived by such minor child could not be added to the 15 income of the father for the purpose of assessment
The income derived by the wife or minor child could only be included in computing his or its total income for the purposes of assessment and neither the husband nor the father could be made liable for income tax in respect of such income whatever may be the reason which actuated them in providing such income for the wife or the minor child
The position was pregnant with difficulties for the Revenue
There were no doubt genuine cases where a wife or the minor child as the case may be was provided with such income on bona fide severance of joint status between the erstwhile members of a joint and undivided Hindu family and where after such partition the adult member of the family entered into a bona fide partnership admitting the minors to the benefits of the partnership
There were on the other hand innumerable cases where such severance of joint status was resorted to mainly with a view to evade a higher incidence of income tax
There were also cases where husbands and fathers provided shares for their wives and minor sons and thus evaded payment of income tax in regard to their shares in the profits of such partnerships
This evil was so rampant that the Income Tax Enquiry Report 1936 recognised the same and made the following recommendations for remedying the situation vide pp
19  20 of the Report
CHAPTER III Assessees Section I Individuals
a Wife s Income
Our attention has been drawn to the extent to which taxation is avoided by nominal partnerships between husband and wife and minor children
In some parts of the country avoidance of taxation by this means has attained very serious dimensions
The obvious remedy for this state of affairs so far as husband and wife are concerned is the aggregation for assessment of their incomes but such a course would involve aggregation in a quite different class of cases ie where the wife s income arises from sources unconnected with the husband          
16 We recommend therefore that the incomes of a wife should be deemed to be for income tax purposes the income of her husband but that where the income of the wife is derived from her personal exertions and is unconnected with any business of her husband her income from her personal exertions upto a certain limit say Rs 500 should not be so included 
b Income of Minor Children
There is also a growing and serious tendency to avoid taxation by the admission of minor children to the benefits of partnership in the father s business
Moreover the admission is as a rule merely nominal but being supported by entries in the firm s books the Income Tax Officer is rarely in a position to prove that the alleged participation in the benefits of partnership is unreal     
We suggest that the income of a minor should be deemed to be the income of the father i if it arises from the benefits of partnership in a business in which the father is a partner or ii if being the income of a minor other than a married daughter it is derived from assets transferred directly or indirectly to the minor by his or her father or mother iii if it is derived from assets apportioned to him in the partition of a Hindu Undivided Family
It may be noted that the recommendations of the Enquiry Committee even in the cases hereinbefore mentioned went to the length of including the income of the wife or the minor child as the case may be in the income of the husband or the father in the computation of his total income for the purpose of assessment
The mischief which the Enquiry Report sought to remedy by its recommendations was one which was the result of husbands entering into nominal partner ships between themselves and their wives and fathers admitting their minor children to the benefits of such partnerships
The mischief if any resulting from the mothers admitting their minor children to the benefits of partnerships in which they were members was farthest from the thoughts of the Enquiry Committee and was nowhere sought to be remedied
Having 17 regard to the circumstances which prevailed at the time when the Enquiry Committee made its report the only mischief which they sought to remedy by their recommendations was the one resulting from the male assessees indulging in such tactics for the evasion of income tax by creating nominal partnerships between themselves and their wives on the one hand and their minor children on the other
These recommendations were duly considered by the Government and as a result thereof Act IV of 1937 was enacted introducing a 163 in the Act
What was intended to be done by the Legislature in enacting this amendment may be gleaned to a certain extent from the statement of objects and reasons appended to the Bill which eventually became the amending Act
Though it is not legitimate to refer to the statement of objects and reasons as an aid to the construction or for ascertaining the meaning of any particular word used in the Act or Statute See Aswani Kumar Ghose vs Arabinda Bose 1 nevertheless this Court in The State of West Bengal vs Subodh Gopal Bose2 referred to the same for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill to introduce the same and the extent and urgency of evil which he sought to remedy
 The statement of objects and reasons which led to the passing of Act IV of 1937 ran as follows  Reference is made in sections I and 4 of Chapter III of the Income Tax Enquiry Report 1936 to the practice of avoiding taxation by means of nominal partnerships between husband and wife or parent and minor child or by the nominal transfer of assets to a wife or minor child or to an  Association  consisting of husband and wife when there is no substantial separation of the interests of the assessee and the wife or child
These practices are reported to have become very widespread already with considerable detriment to the revenue and there is little doubt that if they are not checked there will be progressive deterioration
The proposals in the Report regarding the aggregation 1  2   628
3 18 of the incomes of husband and wife go beyond the immediate necessities of the case and to that extent their adoption would involve the admission of a new principle which the Government of India do not desire to establish in advance of the general public discussion of the Report which has been arranged and the present Bill has been so drafted as to deal only with the abuses to which I have referred
 It is clear from the above extracts that the evil which was sought to be remedied was the one resulting from the widespread practice of husbands entering into nominal partnerships with their wives and fathers admitting their minor children to the benefits of the partnerships of which they were members
This evil was sought to be remedied by the enactment of section 163 in the Act
If this background of the enactment of section 163 is borne in mind there is no room for any doubt that howsoever that mischief was sought to be remedied by the amending Act the only intention of the Legislature in doing so was to include the income derived by the wife or a minor child in the computation of the total income of the male assessee the husband or the father as the case may be for the purpose of assessment
If that was the position howsoever wide the words any individual or such individual as used in section 163 and section 163a may appear be so as to include within their connotation the male as well as the female of the species taken by the themselves these words in the context could only have been meant as restricted to the male and not including the female of the species
If these words are used as referring only to the male of the species the whole of the section 163a can be read harmoniously in the manner above comprehending within its scope all the four cases specified in sub cls
i to iv thereof and so also section 163bWe are therefore of opinion that the words any individual and such individual occurring in section 163 and section 163a of the Act are restricted in their connotation to mean only the male of the species and do not include the female of the species even though by a disjunctive reading of the expression the wife or a minor child of such individual in section 163a 19 and the expression by such individual for the benefit of his wife or a minor child or both in section 163b it may be possible in the particular instances of the mothers being connected with the minor children in the manner suggested by the Revenue to include the mothers also within the connotation of these words
Such inclusion which involves different interpretations of the words any individual or such individual in the different contexts could never have been intended by the Legislature and would in any event involve the addition of the words as the case may be which addition is not normally permissible in the interpretation of a statute
We shall now refer to the decisions of the several High Courts in India bearing on the construction of section 163 of the Act
The earliest decision is that of the High Court of Allahabad in Shrimati Chanda Devi vs Commissioner of Income tax UP 1
That decision emphasised that the sub cl
i of cl
a of sub section
3 of section 16 made it clear that where the husband was a partner the income of the wife by reason of her being a member of the firm was to be computed in the income of the husband and if the Legislature had intended that the word individual in sub cl
ii should mean only the father and not the mother there was no reason why they should not have used similar language as in sub cl
i and said from the admission of the minor to the benefits of partnership in a firm in which his father is a partner
 Why the Legislature used a particular expression and why it did not use any expression which would have been clearer and better expressive of its intention is really difficult to fathom
We may as well wonder why the Legislature did not use the words such individual in sub cls
i and iii of section 163a in place of the words her husband or the husband when the intention of the Legislature would have been equally carried out by the use of those words
It may be that the draftsman considered the use of the words her husband or the husband when he used the same in juxtaposition with the words a wife as appropriate or more elegant and therefore ignored the obvious user of the words such 1 20 individual which would have been equally appropriate in that context
It would have been better expressive of the intention of the Legislature as we have already divined above viz to use the words any individual and such individual in section 163 and 163a respectively in the restricted meaning of the male of the species to have used the words the father in place of the words such individual in sub cls
ii and iv of section 163a
It is however difficult to fathom the mind of the draftsman when he used one particular expression in preference to the other and not much help can be derived from the ratio adopted by the learned Judges of the High Court of Allahabad in the decision just referred to
It is also significant to observe that the learned Judges considered that the language of the section does not create any real difficulty and therefore did not think it worth their while to refer to the Income Tax Enquiry Report 1936 and the passage therefrom which we have quoted above
Suffice it to say that we do not concur with the reasoning adopted by the learned Judges of the High Court of Allahabad and are of the opinion that the decision just referred to in so far as it militates against the reasoning adopted by us herein is incorrect
The later case of Musta Quima Begum In re1 decided by the same High Court merely follows the judgment in Shrimati Chanda Devi s case 2 and is subject to the same criticism as above
The decision of the High Court of Punjab in Shrimati Damayanti Sahni vs Commissioner of Incometax Delhi 3 is the one under appeal before us in Civil Appeal No 25 of 1955
The learned Judges there followed the decision of the High Court of Allahabad in Shrimati Chanda Devi s case 2 and answered the referred question in the affirmative
It follows from what we have said above that that decision is also incorrect and the referred question ought to have been answered by them in the negative
The latest decision in this context is that of the High Court of Madhya Pradesh in commissioner of 1 2 3 21 Income taxMadhya Pradesh and Bhopal vs Smt
Sodra Devi 1 which is the subject matter of Civil Appeal No 322 of 1955 before us
The High Court there observed that the word individual as used in section 163 of the Act was ambiguous and referred to the above quoted passage from the Inquiry Committee s Report 1936 as also the statement of objects and reasons and came to the conclusion that the word individual was restricted to the male of the species and it was not the intention of the Legislature to impose additional tax on a mother assessee by including in her income the income of her minor children arising from the benefits of partnership of a firm in which the mother and the minors were partners
We are of opinion that the decision reached by the learned judges of the High Court of Madhya Pradesh in that case was correct and the referred question was rightly answered by them in the negative
The result therefore is that Civil Appeal No 322 of 1955 will be dismissed with costs and Civil Appeal No 25 of 1955 will be allowed with costs the referred question being answered in the negative
section K DAS J
The substantial question which falls for decision in these two appeals is if the word individual in sub section
3 of section 16 of the Indian Income tax Act hereinafter referred to as the Act includes also a female and therefore the income of the minor sons which arises directly or indirectly from their admission to the benefits of partnership in a firm of which their mother is a member is to be included in computing the total income of the mother within the meaning of sub section
3 cl
a sub cl
ii of section 16
The question is really one of pure construction that is construction of sub section
3 of section 16 of the Act
Nothing turns upon the facts of the case and as the material facts have been clearly set out in the judgment just read by my learned brother Bhagwati J
I do not think that any useful purpose will be served by restating them
Therefore I proceed at once to a consideration of sub section
3 of section 16 of the Act and state at the very 1 22 outset that to my great regret I have come to a conclusion different from that of my learned brethren
I shall presently read the sub section but before I do so it will help the exposition which follows if I explain in a few words the standpoint from which I have approached the question
Speaking generally the expression construction includes two things first the meaning of the words and secondly their legal effect or the effect which is to be given to them by the courts
As in the case of documents so in the case of statutes also they should be construed in a manner which carries out the intention of the Legislature
It may be reasonably asked how is the intention of the Legislature to be discovered The answer is that the intention must first be gathered from the words of the statute itself
If the words are unambiguous or plain they will indicate the intention with which the statute was passed and the object to be attained by it in other words the intention is best declared by the words themselves and the words of a statute are to be interpreted as bearing their ordinary natural meaning unless the context requires a different meaning to be given to them
If however the words are ambiguous the policy of the legislation and the scope and object of the statute where these can be discovered will show the intention which may further be brought to light by applying the various well settled rules and presumptions of construction
One such rule is that the statute must be read as a whole and the construction made of all the parts together
I am emphasising this aspect of the question to guard against any possible suggestion that I have started with some a priori idea of the meaning or intention behind subs
3 of section 16 of the Act and have tried by construction to work that idea into the words of the sub section
I have been conscious all through of the warning given by Lord Halsbury in the following observations in Leader vs Duffey 1  All these refinements and nice distinctions of words appear to me to be inconsistent with the modern view which is I think in accordance with reason and i  301
23 common sense that whatever the instrument it must receive a construction according to the plain meaning of the words and sentences therein contained
But I agree that you must look at the whole instrument and inasmuch as there may be inaccuracy and inconsistency you must if you can ascertain what is the meaning of the instrument taken as a whole in order to give effect if it be possible to do so to the intention of the framer of it
But it appears to me to be arguing in a vicious circle to begin by assuming an intention apart from the language of the instrument itself and having made that fallacious assumption to bend the language in favour of the presumption so made Keeping that warning in mind I shall first take the words of sub section
3 of section 16 and see if they are plain or unambiguous
Alternatively I shall also consider the proper construction of sub section
3 of section 16 on the assumption that the word individual used in the sub section is ambiguous and should therefore be interpreted consistently with the principles laid down in the locus classicus on the subject namely the celebrated Heydon s case 1 reported by Lord Coke and decided by the Barons of the Exchequer in the sixteenth century
I shall now read sub section
3 of section 16 of the Act  16
3 In computing the total income of any individual for the purpose of assessment there shall be included a so much of the income of a wife or minor child of such individual as arises directly or indirectly i from the membership of the wife in a firm of which her husband is a partner iifrom the admission of the minor to the benefits of partnership in a firm of which such individual is a partner iiifrom assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart or 1   24 ivfrom assets transferred directly or indirectly to the minor child not being a married daughter by such individual otherwise than for adequate consideration  and b so much of the income of any person or association of persons as arises from asset transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both
 I have already stated that the sub section must be read as a whole and in the context of the other provisions of the Act particularly section 16 of which it is a part it is only then that we shall arrive at its correct meaning consistent with the other provisions of the Act
The word individual used in sub section
3 of section 16 occurs in several other provisions of the Act eg section 3 section 4A section 48 and section 55
It is necessary to quote section 3 in extensor That section is in these terms  Where any Central Act enacts that income tax shall be charged for any year at any rate or rates tax at that rate or those rates shall be charged for that year in accordance with and subject to the provisions of this Act in respect of the total income of the previous year of every individual Hindu undivided family company and local authority and of every firm and other association of persons or the partners of the firm or the members of the association individually
 It is not disputed before us that the word individual  occurring in sections 3 4A 48 and 55 means either a male or a female nor has it been disputed before us that according to the ordinary accepted meaning of the word it means a single human being as opposed to society family etc and that a single human being may be of either sex
Learned counsel appearing for the assessees in the two appeals have pointed out however that the word individual has not the same width of meaning in sub section
3 of section 16 as it has in the other provisions for example in section 3 the word individual has been held to include a Corporation created by a statute eg a University or a Bar 25 Council or the trustees of a baronetcy trust incorporated by a Baronetcy Act etc whereas sub section
3 of section 16 makes it quite clear that the word  individual  there does not include a Corporation created by a statute
This indeed is correct
But the question before us is whether in its context sub section
3 of section 16 imposes a further restriction on the word individual confining it to a male individual only
The critical question before us is whether such a further restriction is imposed on the word individual either by the express words used in the sub section or by necessary implication from the clauses and sub clauses thereof
It is said to be a presumption in construction that the same words are used in the same meaning in the same statute and particularly in the same section or sub section
The presumption is however of the slightest and there are many instances where the application of this rule or presumption is impossible
The same words may often receive a different interpretation in different parts of the same Act for words used with reference to one set of circumstances may convey an intention quite different from what the selfsame set of words used with reference to another set of circumstances would or might have produced Edinburgh Street Tramways Co vs Torbain 1 per Lord Blackburn
The classic example of the same word having a somewhat different meaning in the same section is provided by Offences against the Person Act 1861 section 57 of which deals with bigamy and enacts Whosoever being married shall marry any other person during the life of the former husband or wife 
Shall be guilty of felony
 It is obvious that the word marry is used in two different senses in the same section
There is another classic example in article 31 of our Constitution where the word law in el
3 of the said Article has been used in different senses
This is referred to in a decision of this Court in The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga 2
1  68
2  908 909
26 The word individual is not defined in the Act but the meaning of the word in sections 3 4A 48 and 55 is reasonably clear
The word assessee is defined in cl
2 of section 2 of the Act as meaning a person by whom income tax or any other sum of money which would include super tax penalty or interest is payable under the Act
It also includes every person in respect of whom any proceeding under the Act is taken for the assessment a of his income b of his loss or c of the amount of refund due to him
Thus the definition covers two categories first persons by whom any tax penalty or interest is payable under the Act whether any proceeding under the Act has been actually taken against them or not and secondly persons against whom any of the proceedings specified in this clause has been taken whether he is or is not liable to pay any tax penalty or interest A person  under section 342 of the General Clauses Act includes any company or association or
body of individuals whether incorporated or not and under cl
9 of the section a person  also includes a Hindu undivided family and a local authority
Thus we have six categories of assessees referred to in section 3 a the individual b the Hindu undivided family c the local authority d the company e the firm and f other association of persons
Read in the context of section 3 of the Act the word individual means in the other sections one of the six categories of assessees referred to in section 3
The same category is also referred to in sub section
3 of section 16 subject only to this restriction that in the context of the sub section the word individual does not include a Corporation etc
We now turn to the critical question before us is there a further restriction in the sub section confining the word individual to a male individual only My answer is that there is nothing in the context of section 16 or of the sub section which confines the word individual to a male individual only
Section 16 deals with the computation of total income and provides what sums are to be included or excluded in determining the total income
The effect of including exempted income in the assessee s total income is 27 mainly two fold first the tax payable by the assessee is determined with reference to the total income and therefore exempted income which is included in the total income would affect the rate of tax applicable to the chargeable portion of the total income secondly in several cases reliefs are given or calculations made with reference to the total income
Sub section 3 of section 16 appears ex facie to be directed towards preventing an individual s attempt to avoid or reduce the incidence of tax by transferring the assets to his wife or a minor child or admitting the wife as a partner or admitting a minor child to the benefits of partnership in a firm in which such individual is a partner
I agree that the sub section creates to some extent an artificial liability to tax by including the income of A in the income of B and must therefore be strictly construed that merely means that the words of the subsection must be given their strictly natural meaning and there should be no attempt at artificial stretching one way or the other
What then is the proper construction of the subsection  It naturally falls into three interconnected parts
The first part controls both cl
a and cl
b and states that in computing the total income of any individual for the purpose of assessment there shall be included so much of the income etc
 as is specified in cls
a and b
The second part is cl
 a itself which starts with an opening sentence that so much of the income of a wife or minor child of such individual as arises directly or indirectly from four specific cases shall be included in the total income of the individual and then the cases are enumerated in four sub clauses numbered i ii iii and iv
Then comes the third part which deals with cl
I have divided the sub section into its three natural parts but I must make it clear that all the three parts must be construed together as they are interconnected and interdependent
In the first part there is no difficulty whatsoever in my opinion in giving the word individual its natural meaning that is that the word means either a male or a female
The opening sentence of cl
a contains the expression so much of the income of a 28 wife or minor child of such individual
Does the use of the word individual in the opening sentence of cl
a give rise to any ambiguity or difficulty I do not think that it does
It is quite obvious that a female individual cannot have a wife but she can have a minor child whereas a male individual can have a wife minor child or both
It has been argued that el
a must be interpreted noscitur a sociis and as the expression a wife or minor child is capable of meaning only when used in connection with a male individual the whole sub section must be confined to a male individual
I am unable to accede to this argument
The collocation or association of the words a wife or minor child in connection with the words such individual in the opening sentence of cl
a does not necessarily mean that the individual contemplated is a male individual only
I agree that the word or in between the words wife and minor child must be there even when the individual talked of is a male only in other words the use of the dis junctive word or does not necessarily clinch the issue
But I do not see any real difficulty in reading the opening sentence of el
a distributively so as to mean a male individual when the wife is being talked of and either a male or a female individual when a minor child is talked of I do not think that such a construction does any violence to the words used on the contrary in my opinion it gives effect to the plain meaning of the word individual
Turning now to the sub clauses numbered i to iv there can be no doubt from the phraseology used that sub cls
i and iii refer only to a male individual because a female individual cannot have a wife
It is worthy of note however and this is very important that sub cls
ii and iv make it equally clear that they are not confined to the male individual only in the manner in which sub cls
i and iii are so confined
In sub cls
i and iii the word individual is not used and the words used are her husband and the husband
In sub cls
ii and iv the words used are such individual
Why did the Legislature make this difference in phraseology If the intention was to 29 confine the entire sub section to a male individual only nothing could have been easier than to qualify the word individual by the adjective male in the first part of the sub section which controls both clauses a and b alternatively in sub cls
ii and iv it would have been easy to use the word father instead of such individual
It is true that a change of language is some though possibly slight indication of a change of intention
I am unable however to accept the argument advanced before us that the phraseology employed in sub cls
i and iii different as it is from that employed in sub cls
ii and iv can be accounted for on the ground of elegance or felicity of expression
It seems to me that if the intention was to confine the word individual to a male individual only elegance and clarity both required that the word individual should be qualified by the adjective male and the word father should have been used in sub cls
ii and iv
I am aware that a draftsman often uses different words merely to avoid repetition
I am also aware that it is dangerous to suppose that the Legislature foresees every possible result that may ensue from the unguarded use of a single word or that the language used in statutes is so precisely accurate that you can pick out this and that expression and skilfully piecing them together lay a safe foundation for some remote inference as per Lord Loreburn LC in Nairn vs University of St Andrews and Others 1
But what is noteworthy in the present case is that the difference in phraseology between sub cls
i and iii on the one side and sub cls
ii and iv on the other is so striking that the conclusion appears to me to be reasonably plain it is not really a case of the unguarded use of a single word or picking out an expression here or picking out another expression there in order to piece out some remote inference
The striking difference in phraseology hits as it were one in the face when one reads the four sub clauses
It seems to me that the meaning is very clear
In the opening part of el
a the word individual is used to mean a male or a female two of the sub clauses however are confined 1   161 30 to the male only and therefore the word husband is used in juxtaposition to the word wife
In the other two sub clauses however the word individual  is used in order to make it clear that they refer either to a male or to a female individual
I do not see any incongruity or disharmony in the enumeration of the four sub clauses nor do I appreciate the argument urged before us that the word  individual  on the construction adopted by me has a different meaning in two of the four sub clauses of cl
The word individual has and retains the same meaning namely a male or a female all throughout the subsection
All that happens is that in two of the subclauses of cl
a when the Legislature intends that they should be confined to a male individual only the word husband is used to make the intention clear
On the same reasoning when the Legislature intends in two other sub clauses that they should apply to either a male or a female the word  individual  is used to include either of them
I am unable to accept the contention that such an interpretation offends against the rule of harmonious construction
So far as el
b of the sub section is concerned the word  individual  is again used and that again relates to a male or a female
The last part of the clause reads by such individual for the benefit of his wife or a minor child or both
 Here again the sentence has to be read distributively that is when the wife is talked of the individual can only be a male when a minor child is talked of the individual can be a male or a female when both wife and minor child are talked of the individual can again be a male only
There was some argument before us with regard to the use of the indefinite article a before the words minor child and it was submitted by the learned Solicitor General that if the Legislature intended to confine cl
b to a male individual only it could have easily dropped the indefinite article and used the word his before the words minor child
Personally I do not attach much significance to the use of the indefinite article a
It is to be noted that no such indefinite article is used before the words minor child in the opening 31 sentence of cl
a but I do not see any compelling reasons why the natural meaning of the word  individual  should not be given to it in el
a and cl
b of the sub section
Such meaning can be easily given to both the clauses if they are read distributively and such reading does not in my opinion do any violence to the language used
On a plain reading of the sub section I have come to the conclusion that there really is no ambiguity and the word individual has been used in the sub section in its ordinary accepted connotation that is either a male or a female individual two of the sub clauses of cl
a are no doubt confined to a male individual and that has been made clear by the use of the words  wife and husband instead of the words such individual 
Assuming however that there is some ambiguity in the sub section by reason of 1 the use of the phraseology in sub cls
i and iii of cl
a and 2 of the opening sentence of cl
a which controls all the four sub clauses of that clause what then is the position  The four principles laid down in Heydon s case have been thus summarised  That for the sure and true interpretation of all statutes in general be they penal or beneficial restrictive or enlarging of the common law four things are to be discerned and considered 1 what was the common law before the passing of the Act 2 what was the mischief and defect for which the common law did not provide 3 what remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth 4 the true reason of the remedy
And then the office all the Judges is always to make such construction as shall suppress the mischief and advance the remedy and to suppress subtle inventions and evasions for the continuance of the mischief and pro privato commedo and to add force and life to the cure and remedy according to the true intent of the makers of the Act pro bono publico
 Let me now apply these principles in the construction of sub section
3 of section 16 of the Act 32 The subjection was introduced in 1937 and before the enactment of the sub section there was no provision for the inclusion of the income of a wife or a minor child in the computation of the total income of an individual
The Income Tax Enquiry Report 1936 referred to the widespread evil of the evasion of tax by the severance of the joint status amongst members of a joint and undivided Hindu family
The Report said   Our attention has been drawn to the extent to which taxation is avoided by nominal partnerships between husband and wife and minor children
In some parts of the country avoidance of taxation by this means has attained very serious dimensions
The obvious remedy for this state of affairs so far as husband and wife are concerned is the aggregation for assessment of their incomes but such a course would involve aggregation in a quite different class of case ie where the wife s income arises from sources quite unconnected with the husband We recommend therefore that the incomes of a wife should be deemed to be for Income tax purposes the income of her husband but that where the income of the wife is derived from her personal exertions and is unconnected with any business of her husband her income from her personal exertions up to a certain limit say Rs 500 should not be so included      bIncome of minor children
There is also a growing and serious tendency to avoid taxation by the admission of minor children to the benefits of partnership in the father s business
Moreover the admission is as a rule merely nominal but being supported by entries in the firm s books the Income tax Officer is rarely in a position to prove that the alleged participation in the benefits of partnership is unreal
       We suggest that the income of a minor should be deemed to be the income of the father i if it arises 33 from the benefits of partnership in a business in which the father is a partner or ii if being the income of a minor other than a married daughter it is derived from assets transferred directly or indirectly to the minor by his or her father or mother iii if it is derived from assets apportioned to him in the partition of a Hindu Undivided Family
 It is clear however that the report is of very little help in the construction of the sub section because the Legislature did not accept in full the recommendations made in the Report
Two of the rules in Heydon s case lay down 1 that we must find what was the mischief or defect for which the earlier law did not provide and 2 what remedy the Parliament has resolved and appointed to cure the mischief or defect
In the case under our consideration the interpretation which has been put by me on sub section
3 of section 16 does not militate against any of the aforesaid rules of Heydon s case
The interpretation put by me undoubtedly remedies the mischief or defect for which the earlier law did not provide
The only serious criticism made by learned counsel for the assessees against that interpretation Is that the remedy not merely cures the mischief for which the earlier law did not provide but it goes a little further and attacks the evil even when the evil is committed by a female individual though the Income Tax Enquiry Report except in one part did not in specific terms refer to such an evil committed by a female individual
I can see nothing in the rules laid down in  Heydon s case which militates against the view taken by me
There is no presumption that while remedying an evil the Legislature may not cast its net very wide so as to remedy the evil in all its aspects
Let me again refer to sub cls
i and ii of cl
a of sub section
3 of section 16 of the Act
Those two sub clauses are absolute and unqualified in terms and not subject to any exception
If the wife owns and manages a business and she takes her husband into partnership with her in the business the result of the partnership would be that the wife s income from the business would be no longer taxable in her hands but would be included in the total income of her 5 34 husband under the sub section even though the husband may be a dormant partner
This clearly shows that the Legislature was not confining itself to the recommendations made in the Income Tax Enquiry Report
What is to be included in the total income of an individual under cl
a is the income of a wife or minor child arising directly or indirectly from the membership of the wife in the firm or from the admission of the minor to the benefits of partnership in the firm of which the individual is a partner
The clause covers the share of the profits of the firm received by the wife in her capacity as a partner or by the minor child in his or her capacity as one admitted to the benefits of partnership
But the income received from the firm by the wife or the minor child under any other contract with the firm or in any other capacity does not fall within the clause and is not included in the husband s or parent s total income
From what is stated above it is clear that the Legislature did not confine itself strictly or solely to the recommendations made by the Income Tax Enquiry Committee but provided for all such aspects of the evil or mischief as it thought fit to remedy by the Indian Income tax Amendment Act 1937 Act IV of 1937
In these circumstances I do not think that the recommendations made by the Income tax Enquiry Committee can be relied upon to restrict the meaning of the word individual used in sub section
3 of section 16 of the Act
 As to the Statement of Objects and Reasons which led to the passing of Act IV of 1 937 and which has been set out in the judgment of the High Court of Madhya Pradesh I do not think that the Statement can be referred to as an aid to construction for ascertaining the meaning of the word individual used in the sub section
Even if it is referred to for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill to introduce the same and the extent and urgency of the evil which he sought to remedy the use of the word Parent in the Statement of Objects and Reasons shows that the evil was not confined to the male individual only and the sponsor of the Bill was aware of 35 it
The Statement reads Sec
163 was thus designed to bring within the ambit of taxation incomes of wives and minor children as income of husband or parent which otherwise would escape the whole burden of taxation
 I emphasise the use of the word parent which would show that the evil contemplated was an evil which was not confined to the father only but included the mother as well
My conclusion therefore is that there is nothing in the policy of the legislation and the scope and object of the statute which compels one to cut down the natural meaning of the word individual used in sub section
3 of section 16 of the Act so as to confine it to a male individual alone
I now turn to such authorities as have been cited before us
There has been a difference of opinion in the High Courts with regard to the interpretation of sub section
3 of section 16 of the Act
In Shrimati Chanda Devi vs Commissioner of Income tax 1 the Allahabad High Court has taken the view that the minor s income which arises directly or indirectly from the admission of the minor to the benefits of partnership in a firm of which the mother is a partner can be included in the mother s assessable income under section 163aii of the Act
The Allahabad High Court proceeded on the footing that the language of the sub section
did not create any real difficulty and it was not open to it to take the help of the Income tax Enquiry Report
I have considered this case from both the points of view and have arrived at the same conclusion at which the Allahabad High Court arrived
It is not necessary to mention the other reasons given by the Allahabad High Court because they have already been stated by me in an earlier part of this judgment
This decision of the Allahabad High Court was followed by the Punjab High Court in Commissioner of Income tax Delhi vs Shrimati Damayanti Sahni2 which has given rise to one of the two appeals before us
The Punjab High Court gave no additional reason except to state that in cl
a of sub section
3 of section 16 the word wife and the 1 2 36 words minor child were used disjunctively
I have already stated that the use of the disjunctive or is not decisive but there is no real difficulty in reading clauses a and b distributively
The Madhya Pradesh High Court took a different view in Sahodradevi N Daga vs Commissioner of Income tax 1 which has given rise to the other appeal before us
In my view the learned Judges in that case did not attach sufficient importance to sub cls
ii and iv of cl
If I may say so with great respect they confined their attention primarily to sub cls
i and iii of el
a and to cl
b and from those provisions they inferred that the intention was to confine the word individual to a male individual
I venture to think that all the three parts of the sub section including the four sub clauses of cl
a must be read together in order to understand the true meaning and effect of the sub section
The learned Judges further seemed to think that the use of the words such individual in sub cl
ii of el
a was due to inadvertence
I am unable to agree
I have already pointed out that the phraseology in sub cls
i and iii of cl
a is so strikingly different from the phraseology used in sub cls
ii and iv that only one and one reasonable conclusion can be drawn namely that the word individual has been used in its accepted connotation and when the Legislature wanted to confine the operation of a sub clause to the male individual only it used the word wife and husband where however the Legislature wanted to refer to either a male or a female it used the word individual which in its ordinary connotation means either a male or a female
For the reasons given above I agree with the view expressed by the Allahabad and the Punjab High Courts and do not accept the interpretation given by the Madhya Pradesh High Court
In my opinion the question should be answered in the way the Allahabad and the Punjab High Courts answered it therefore Civil Appeal No 322 of 1955 should be allowed with costs and Civil Appeal No 25 of 1955 should be dismissed with costs
1 37 By COURT In accordance with the Judgment of the majority Civil Appeal No 322 of 1955 is dismissed with costs and Civil Appeal No 25 of 1955 is allowed with costs the referred question being answered in the negative


Summary:
The common question of law for determination in these two appeals was whether the word individual  in section 163 of the Indian Income tax Act 1922 as amended by Act IV of 1937 includes a female and whether the income of minor sons from a partnership to the benefits of which they were admitted was liable to be included in computing the total income of the mother who was a member of the partnership
Held Per Bhagwati and Kapur jj
 section K Das J dissenting that the question must be answered in the negative
The word individual  occurring in section 163 of the Indian Income tax Act as amended by Act IV Of 1937 means only a male and does not include a female
Shrimati Chanda Devi vs The Commissioner of Income tax and Musta Quima Begum In re  disapproved
Where the Legislature uses ambiguous language in enacting a statute as it has undoubtedly done in the instant case recourse must necessarily be had for a clarification of such ambiguity to the pre existing state of the law in order to see what defect or mischief therein was being sought to be remedied the remedy that was prescribed by the statute and the reason for it
Bengal Immunity Company Limited vs The State of Bihar  Thomson vs Lord Clanmorris and Eastman Photographic Materials Company vs Comptroller General of Patents Designs and Trade Marks  relied on
A reference to the Income Tax Enquiry Report 1936 and the Statement of objects and reasons that led to the passing of the Indian Income tax Amendment Act IV of 1937 makes it clear beyond doubt that the mischief the Legislature was seeking to remedy was one that resulted from a husband entering into a 2 nominal partnership with his wife or a father admitting his minor children to the benefits of a partnership and the possibility of a mother doing so was not even thought of
Per section K Das J
There is no ambiguity in section 163 of the Indian Income Tax Act as amended by Act IV Of 1937 and read in the context of the other provisions of the Act and construed as a whole it clearly indicates that the Legislature used the word individual  in that sub section in its ordinary connotation to mean both a male and a female person
Even if on the assumption that there is ambiguity in the phraseology used in the sub section reference is made to the Income Tax Enquiry Report 1936 and the Statement of objects and reasons of the Amending Act IV of 1937 for the limited purpose for which it is permissible to do so they disclose nothing concerning the policy adopted by the Legislature or the object the statute was intended to accomplish that makes any other meaning inevitable
The recommendations made by the Report were not fully accepted by the Legislature and it cannot be a reliable guide and the use of the word parent  in the Statement clearly shows that the mischief envisaged was not confined to the father alone