JUDGMENT
1. The following question has been referred to this court for its opinion by the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad :
” Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee-Hindu undivided family should be assessed at the rates applicable to an individual, Hindu undivided family, etc., and not at the higher rates applicable to a specified Hindu undivided family ?”
2. The assessee is a Hindu undivided family. There was a partition of the assessee-Hindu undivided family which had taken place in 1963 amongst three brothers who constituted the assessee-Hindu undivided family, as a result of which only immovable properties were left with the assessee-Hindu undivided family and the other assets were divided amongst the three brothers who constituted smaller Hindu undivided families in respect of the assets falling to their shares.
3. The question arises whether the assessee-Hindu undivided family is liable to be assessed at a higher rate treating it as specified Hindu undivided family.
4. The assessing authority held that the assessee-Hindu undivided family was liable to be assessed at a higher rate applicable in the case of a specified Hindu undivided family. Its view was affirmed by the appellate authority. Then the dispute was carried in second appeal before the Income-tax Appellate Tribunal, which considering the relevant case law, held as follows :
” The smaller Hindu undivided family is thus a separate group and not a member of the bigger Hindu undivided family. We are of the view that for the purposes of taxation of the bigger Hindu undivided family at a higher rate, it is the income of the individual members of the bigger Hindu undivided family that is to be taken into consideration and not the incomes of their smaller Hindu undivided families constituted on partition …”
5. This is how the view of the assessing authority and the appellate authority was reversed by the Appellate Tribunal.
6. The relevant assessment year in this case is 1975-76. Sub-paragraph II of paragraph A to the First Schedule of the Finance (Amendment) Act, 1975, is relevant for the purposes of this case and that runs as follows (see [19751 100 ITR (St.) 10) :
” In the case of every Hindu undivided family which at any time during the previous year has at least one member whose total income of the previous year relevant to the assessment year commencing on the first day of April, 1976, exceeds Rs. 8,000. ”
7. From a perusal of sub-paragraph II, it is manifest that the emphasis is on the income of individual member and not of a smaller Hindu undivided family. In the case at hand not the income of an individual member but of a smaller Hindu undivided family exceeds the prescribed limit and, therefore, we are of the view that the Appellate Tribunal was right in holding that for the purposes of taxation not the income of a smaller Hindu undivided family but the income of an individual member of the bigger Hindu undivided family has to be taken into consideration and the income of any individual member of the assessee-Hindu undivided family not being in excess of the prescribed limit, a higher rate applicable in the case of a smaller Hindu undivided family cannot be applied to the assessee-Hindu undivided family.
8. For the above reasons, we agree with the view taken by the Appellate Tribunal. The aforesaid question is, therefore, answered in the affirmative, i.e., in favour of the assessee and against the Revenue.