Meaning of “Hindu undivided family”

The meaning of Hindu undivided family under section 2(31) of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble Supreme Court tried to explain the meaning of Hindu undivided family.

Meaning of Hindu undivided family

The phrase ‘hindu undivided family‘ used in section 2(31) of the Income Tax Act came up before various high courts as detailed under :

1. Hon’ble Supreme court explained the meaning of “hindu undivided family” while delivering judgment in N.V. Narendranath Vs. CIT [1969] 74 ITR 190 (SC) as under :

Meaning: The expression ‘hindu undivided family’ in the wealth-tax act is used in the sense in which a hindu joint family is understood in the personal law of hindus.

2. Hon’ble Supreme court explained the meaning of “hindu undivided family” while delivering judgment in CIT Vs. Smt. Champa Kumari Singhi [1972] 83 ITR 720 (SC) as under :

Meaning: ‘Hindu undivided family’ is a legal expression which has been employed in taxation laws. It has a definite connotation and embodies the meaning ascribed to the expression ‘hindu joint family’. The words ‘hindu undivided family’ are used in the income-tax statutes with reference not to one school of hindu law but to all schools.

3. Hon’ble Supreme court explained the meaning of “hindu undivided family” while delivering judgment in C. Krishna Prasad Vs. CIT [1974] 97 ITR 493 (SC) as under :

Meaning: The expression ‘hindu joint family’ in the income-tax act is used in the sense in which a hindu joint family is understood under the various schools of hindu law.

4. Hon’ble Supreme court explained the meaning of “hindu undivided family” while delivering judgment in Surjit Lal Chhabda Vs. CIT [1975] 101 ITR 776 (SC) as under :

Meaning : The expression ‘hindu undivided family’ finds reference in the provisions of the 1961 act but that expression is not defined in the said act. The reason of the omission evidently is that the expression has a well-known connotation under the hindu law and being aware of it, the legislature did not want to define the expression separately in the act. Therefore, the expression ‘hindu undivided family’ must be construed in the sense in which it is understood under the hindu law.

Section 2(31) of Income Tax Act

(31) “person” includes—

(i) an individual,

(ii) a Hindu undivided family,

(iii) a company,

(iv) a firm,

(v) an association of persons or a body of individuals, whether incorporated or not,

(vi) a local authority, and

(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.

Explanation.—For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains;

Updated up to Finance Act 2021