Commissioner of Income Tax vs Shashi Bala Jain

J.V. Gupta, J.—This order will dispose of Income Tax Cases Nos. 26 and 27 of 1980, as both of them arise out of the order dated January 24, 1980, passed by the Income Tax Appellate Tribunal, Chandigarh Bench (hereinafter called "the Tribunal"). Income Tax Case No. 26 of 1980 relates to the assessment year 1973-74 while Income Tax Case No. 27 of 1980 relates to the assessment year 1974-75, of the assessee. In these petitions, u/s 256(2) of the Income Tax Act, 1961, the revenue has sought a mandamus directing the Tribunal to refer the following question of law for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting 3/4th of the pension received by the assessee on the death of her husband holding that she was assessable not in respect of the whole, amount received by her, but only on 1/4th of it?"

The facts, as recorded by the Tribunal, in brief, are that Shrimathi Shashi Bala Jain, the assessee, is the widow of late Shri Adish Kumar Jain, who belonged to the Haryana Judicial Service and died in harness shortly after joining the Tribunal as its Judicial Member. At the time of his death, the family left behind by him consisted of his widow, one minor son and two minor daughters. Since he belonged to the Haryana Judicial Service, his dependants were entitled to receive family pension under the Family Pension Scheme, 1964, formulated by the Punjab Govt. in the year 1964. Under this scheme, the late Shri Adish Kumar Jain had nominated his wife, the assessee, to receive the family pension in the event of his death during service. During the accounting period, relevant to the assessment year 1973-74, she received Rs. 1,200 as family pension and filed the return of income showing only one-fourth thereof as taxable in her hands. The ITO, however, taxed the entire amount and the AAC dismissed her appeals against the orders of the ITO.

On further appeal, the Tribunal found that the assessee was entitled to only one-fourth share of the pension amount as her real income and it was only that income which could be assessed in her hands for purposes of Income Tax. The application made by the revenue for making a reference to the High Court were dismissed by the Tribunal, vide order dated January 24, 1980, on the ground that there was no ambiguity in the Rules and it was clear that the family pension was meant for the family of the deceased Govt. employee and not for an individual member of the family who may at a particular point of time be nominated as a matter of convenience to receive the family pension. The Tribunal further observed that since the answer to the question posed by the Commissioner was self-evident, they did not consider it necessary to burden the High Court with a reference sought by him, and, therefore, dismissed the applications.

We have heard the learned counsel for the parties and we do not find that any question of law as such arises out of the order of the Tribunal dated July 11, 1979.

From a perusal of the provisions of the Family Pension Scheme, 1964, it is clear that the family pension was not meant for any individual family member of the deceased Govt, employee. The details required at the time of adopting the said scheme, the definition of the family, and the forms of application, etc., show that the widow or the widower, as the case may be, and minor sons and daughters of the deceased Govt. employee are the beneficiaries under the said scheme. In the absence of anything to the contrary, their shares in the family pension are to be taken as their income. At the time when Shri Adish Kumar Jain died, he left behind his wife, Smt. Shashi Bala Jain, the assessee, one minor son and two minor daughters. The composition of the family remained the same during the accounting periods relevant to both the assessment years 1973-74 and 1974-75. Under the aforesaid scheme itself, the nominee, Smt. Shashi Bala Jain, the assessee, is merely a collector of the family pension on behalf of the family of the deceased.

Moreover, the Tribunal has also found that the shares of the family members being definite and ascertainable at the end of the previous year, when an assessment in respect of the family pension is to be raised, the entire amount cannot be taxed in the hands of the assessee. She could be taxed only in respect of her share which is definite and ascertainable.

For the reasons recorded above, there is no merit in both the petitions and the same are dismissed with costs.

B.S. Dhillon, J.

I agree.