Question And Answer
Subject: Death of Father. Mother remarries. Minor sole survivor: Income of HUF and Minor
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Date: October 2, 2021
Query asked by PARAS CHHAJED

A family comprising of Husband (SK),  Wife (N) and a minor son (S) was assessed to tax as a Hindu Undivided Family(SK HUF). The husband expired and the HUF continued with the wife as manager as the son was still minor. The minor had his own income also which was being clubbed with his father, and after the death of the father the income was clubbed with his mother.

The wife(N)  got remarried to a divorcee (Y)  who is having 2 daughters from his previous marriage.

S, the minor son of the deceased SK and N is now not having any parent as the father (SK) expired and mother(N) got remarried. Therefore, S is now residing with his Grand Parents. The Grand Parents have their HUF in which S is a coparcener.

Now after the remarriage the family comprises of  Y, N and two minor daughters as Y HUF.

The queries are:

What will be the status of SK HUF after N got remarried and S is still minor ?

Who will manage the affairs of the SK HUF ?

Whether SK HUF would get merged with HUF of Grand Father ?

What would be the status of assets of SK HUF during the minority of S and after the S becomes major and after S marries ?

Income of Minor S would be clubbed with whose income ?

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The HUF will be managed by Mrs. N as the Karta. Reliance is placed on the decision of the Hon’ble Delhi High Court in the case of Mrs Sujata Sharma v Shri Manu Gupta & Ors CS (OS) No. 2011/2006 wherein it was held that women have equal rights in HUF property and also the right to manage HUF property.

Reference is drawn to the decision of the Hon’ble Bombay High Court Nagpur Bench in the case of C.P. Berai v. Laxmi Narayan AIR 1949 Nag 128 where it was held that a widow could be a karta in the absence of adult male members in the family. It was said that the true test is not who transferred the liability of being the karta, but whether the transaction was justified by necessity

Similarly, the Hon’ble High Court in Sushila Devi Rampura v. Income tax Officer AIR 1959 Cal wherein it was held that where the male members are minors, their expected guardian is their mother can represent the HUF for the purposes of assessment and recovery of income tax.

Therefore, the mother (Mrs. N) will be the HUF of the SK HUF and the HUF will continue.

The HUFs will not merge.

After S becomes a major, it is advisable that he becomes the Karta of the HUF. Upon his marriage, his wife will be a member of the HUF.

The Income of S will be clubbed with his Mother’s Income. It is also pertinent to note that the income of S can be included in the hands of Mr. Y, if he accepts S as his step-son. As per section 2 (15B) of the Income-tax Act, 1961 (Act) the definition of a child includes a step-child, inter alia. Therefore, for the purpose of section 64 of the Act, the income of S could be clubbed with the income of Mr. Y.

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