ORDER
T. Venkatappa, Judicial Member
1. Since common points are involved, these appeals are being disposed of together.
2. The assessee-HUF consisted of Shri V. Ramesh Babu, the karta, his wife Smt. V. Rajyalakshmi and his minor son. The assessee filed returns in the status of HUF. Along with the return, the assessee filed declaration to the effect that no other member of his family has taxable wealth. For the year 1978-79 both for wealth-tax and income-tax, the status was taken as HUF in the original assessment. Subsequently, these assessments were reopened and the status has been taken as HUF (specified). In the assessment year 1981-82 the status of the assessee was taken as HUF (specified) in the assessment made under Section 143(3) of the Income-tax Act, 1961. The assessee contended that his wife Smt. V. Rajyalakshmi relinquished her right in the property on 25-6-1974 on receiving Rs. 10,000 for maintenance and the suit filed on behalf of the minor son for partition has been decreed. On appeals, those assessments were upheld.
3. The learned counsel for the assessee submitted that Smt. V. Rajyalakshmi relinquished her right in the property on 25-6-1974 on receipt of a maintenance of Rs. 10,000 and the suit filed on behalf of the minor son for partition has been decreed. Thereafter they have been living separately. Thus, his wife is no longer a member of the joint family. Hence, the status has to be taken only as ordinary HUF. He also urged that on account of the change of opinion by the ITO the assessment cannot be reopened as full facts were placed in the original assessment. Further, there is no information for reopening the assessment. Thus, the reassessment is not valid. He also urged that the wife had no taxable wealth and so the status cannot be taken as HUF (specified).
4. The learned departmental representative supported the orders of the lower authorities. He submitted that as no declaration was filed by his wife, the status has been taken as HUF (specified). The reopening of the assessment was valid.
5. We have considered the rival submissions. In the case of every HUF which has at least one member whose total income of the previous year exceeds the maximum amount which is not chargeable to income-tax or whose net wealth exceeds the taxable limit, the status has to be taken as HUF (specified) under the Act and the Wealth-tax Act, 1957, respectively. Unless there is material to come to the conclusion that the income of one member is chargeable to income-tax or his net wealth is chargeable to wealth-tax, the status cannot be taken as HUF (specified). In the wealth-tax return form for the relevant year Clause 5 of Part VI for the relevant year reads as under :
In the case of Hindu undivided family,
Whether the Hindu undivided family has at least one member whose net wealth assessable for the assessment year exceeds Rs, 1 lakh ? If the reply to this question is in the negative, please attach declarations to this effect from all members of the Hindu undivided family.
Similarly in the income-tax return the clause in the return reads as under :
In the case of Hindu undivided family,
Whether the family has at least one member whose total income assessable for the assessment year exceeds the maximum amount which is not chargeable to income-tax ? If the reply to this question is in the negative, please attach declarations from all the members of the Hindu undivided family.
There is no provision either in the Income-tax Act or the Wealth-tax Act or the Income-tax Rules, 1962 or the Wealth-tax Rules, 1957 to the effect that once the declaration is not filed by the members of the family the status should be taken as HUF (specified). There is also no penal provision for the failure to file any such declaration. Merely because the declarations of other members of the family have not been filed the status cannot automatically be taken as HUF (specified) unless the revenue is able to prove that a member of the family has taxable income or taxable wealth. The revenue has failed to prove the same. The karta alone has filed the declaration stating that no other member of the family has taxable income or taxable wealth. In our view the revenue has not proved that any other member of the HUF has taxable income or taxable wealth. Hence, the status cannot be taken as HUF (specified). The status taken in the original assessment for 1978-79 as ordinary HUF is correct. The reopening of the assessment for the year 1978-79 both under the Income-tax Act and the Wealth-tax Act is not valid for two reasons, viz., (0 the status taken in the original assessment is correct, and (ii) there is no information for reopening the assessment under Section 147(b) of the Income-tax Act. or under Section 17(1)(b) of the Wealth-tax Act and it is only on account of change of opinion that the assessment has been reopened even though the full facts were available in the original assessment. In the reasons recorded it is stated that in the course of the assessment proceedings for 1981-82 it was noticed that the correct status was that of HUF (specified). But we find that the assessment for 1981-82 was completed on 15-12-1983 whereas the reasons for reopening the assessment for 1978-79 have been recorded on 25-3-1983. Hence, that reason itself is not a valid one. Thus, the reopening of the assessment for 1978-79 under the Income-tax Act as well as the Wealth-tax Act is not valid. On merits also we have held that the revenue is not justified in taking the status as HUF (specified) and the correct status is only ordinary HUF. The contention of the learned counsel for the assessee that once wife has relinquished her rights in the property having taken maintenance is no longer a member of the family is to be rejected in view of the decision of the Andhra Pradesh High Court in Prem Chand v. CIT [1984] 148 ITR 440 wherein it was held that the wife continues to be a member of the HUF of her husband as long as the marital tie lasts in spite of taking a share in the partition. The reassessment orders for the assessment year 1978-79 both under the Income-tax Act as well as the Wealth-tax Act are cancelled. For the assessment year 1981-82 the status should be taken as ordinary HUF but not as HUF (specified).
6. In the result, the appeals are allowed.