HUF cannot be formed by only female members- Presence of a Male member is must
Introduction:
In our previous article, we have discussed on the topic “Can a female become karta of HUF?”. Read the article at the following link: https://www.taxwink.com/blog/female-karta-of-huf. In this article, we have come out with another important issue whether “Can only female members constitute a HUF in absence of male member?”. It is well known fact that an HUF is generally created by a male counterpart with other family members (male as well as female). HUF is headed by ‘Karta’ who is generally the senior-most male member of the HUF. However, will it possible to create an HUF when there is no male member in the family is a legal issue which has been tested on the judicial platform as well. On this issue, an important ruling has been given by the Hon’ble Supreme Court in the case of CIT vs. Smt. Sandhya Rani Dutta [Appeal (Civil) 5450-5451 of 1997 dated 22-02-2001].
In this case, a Hindu assessee died intestate leaving behind his widow and two daughters. The widow and the daughters inherited the self-acquired properties of the deceased in equal shares. All the three female members claimed to form an HUF and the widow threw her share of inherited property into the kitty of this HUF. In subsequent years, the widow claimed the income from such inherited property not in her hands but in the hands of HUF. The A.O. rejected the contention of the assessee (widow) and the matter escalated up to the Apex Court.
In its decision, the Hon’ble Supreme Court referred many precedents some of which are quoted as below:
(a) In Gowli Buddanna vs. CIT (60 ITR 293) SC, this court held that there might be a Joint Hindu Family consisting of a single male member and the widows of deceased coparceners. The plea that there had to be atleast two male members to form an HUF as a taxable entity was found to have no force. Implicit in this is the conclusion that atleast one male member is necessary for the purposes of the formation of an HUF.
(b) In Surjit Lal Chhabda vs. CIT (101 ITR 776) SC, it was held by this court that a joint hindu family, with all its incidents, is a creature of law and cannot be created by the act of parties, except to the extent to which a stranger may be affiliated to the family by adoption.
(c) This Court in Pushpa Devi vs. CIT (109 ITR 730) SC held that it was a fundamental notion governing a joint hindu family that a female member of the joint family cannot blend her separate property, even if she is the absolute owner thereof, with joint family property. This judgement covered a case where there was already a joint family in existence and held that, even so, a female cannot blend her absolute property therewith. The ratio applies as much when a female purport to create by agreement with other females an HUF and blends the property of her absolute ownership therewith.
The Hon’ble Supreme Court also commented upon the decision of the Tribunal in the case of the assessee (widow) and stated that the Tribunal rightly noted that so long as the property which was originally of a joint hindu family remained in the hands of the widows of the members of the family and was not divided among them, the joint family continued. However, the final conclusion as drawn by the Tribunal was erroneous that only females can also form an HUF.
Supreme Court Ruling:
In view of above precedents and observations, the Hon’ble Supreme Court passed the following judgement stating that “We have no authority before us which can lead us to the conclusion that the assessee and her two daughters were capable of forming a joint hindu family or of throwing the interest of any one of them in the inherited property therein. The concept of Hindu females forming a joint hindu family by agreement amongst themselves appears us to be contrary to a basic tenet of the Hindu personal law.
Conclusion:
Presence of a male member is a pre-requisite for constitution of an HUF. An HUF is a creation of law and cannot be merely created by the act of the parties. Therefore, only female members cannot create an HUF by entering into agreement amongst themselves and throwing their share in inherited property in the kitty of the HUF. However, there is no bar if an already existing HUF continues with the widows of the members of the family and even a female member being ‘Karta’ till the HUF property is partitioned amongst them.
