HUF as the term denotes is a family consisting of group of persons who are descendants of a common ancestor. Therefore, it is little surprising as to how a single member can constitute a HUF. The simple answer to this question is in the negative.
A single person claiming the status of HUF can be on account of the following events:
- A HUF is reduced to a single member on account of death of all other members.
- A bachelor individual receiving certain properties on partition of his father’s HUF claiming the status of HUF either on receipt of this property or on partition or on marriage.
In a number of court cases, the issue has arisen and in one such case - CIT vs Vishnu Kumar Bhaiya (Madhya Pradesh High Court) reported at 142 ITR 357(1983), the Hon’ble court decided that a single member, either male or female cannot constitute a HUF. It is pertinent to note here that a Special Leave Petition (SLP) against this decision was granted by Supreme Court on 27/2/1984 as reported at Vishnu Kumar Bhaiya vs CIT (1984) 146 ITR (St) 187 and is still pending.
The said decision of Vishnu Kumar Bhaiya(upra) was again considered by the Hon’ble Madhya Pradesh High Court in the case of Balkrishna Goyal vs Commissioner of Wealth-tax(1995) 218 ITR 671. In the said case the assessee obtained property on partial partition which took place in 1955 among his grandfather, father and brothers. M that time, he was unmarried. Till the assessment year 1978-79, the returns were filed by him in the status of an ‘individual”. He married on February 24, 1978. Thereafter, he submitted his income-tax and wealth-tax returns for the assessment year 1979-80 claiming status as Hindu, tindivided family in respect of the properties obtained by him in partial partition. On these facts the following question was answered in the negative i.e., in favour of the assessee by the Hon’ble Court:
“Whether on the facts and in the circumstances of the case, the Tribunal was justified in not accepting the status of the assessee as Hindu Undivided family in the assessment years 1980-81 to 1983- 84?”
In the aforesaid decision of the Balkrishna Goyal, the Hon’ble M.P. High Court considered the full bench decision of CIT vs Krishna Kumar (1983) 143 ITR 462.
The aforesaid decisions of the Hon’ble Madhya Pradesh High Court in the case of Vishnu Kumar Bhaiya (Supra) and Balkrishna Goyal (supra) was considered recently by the Bombay High Court in the case of Dr Prakash B Sultane vs CIT (2005) 148 Taxmann 353 and the Hon’ble Bombay High Court applying the principles laid down by the Apex Court case of Gowli Buddanna vs CIT (60 ITR 293) answered the following question in the negative i.e., in favour of the assessee and against the revenue:
‘Whether, on the facts and in the circumstances of the case the Tribunal is justified in law in holding that the income from assets received on partition dated 1-1-72 to the extent of Rs. 15,381 for assessment year 1981- 82 and Rs. 12,242 for assessment year 1982-83 was assessable in the hands of the assessee individual ?“
The above question was in respect of the following facts:-
The assessee is a doctor by profession. His income from profession was assessable in his hands as an individual. The assessee was member of a bigger HUF which was partitioned on 1-1-72. At the time of partition and right upto 22nd January, 1980 the assessee was a bachelor. During all these years, the income from assets on partition was assessed in the hands of the assessee as his individual income. When the assessee got married on 22nd January, 1980, the assessee contended that immediately after his marriage, the income from the assets received by him on partition was required to be assessed as HUF income, the HUF consisting of himself and his wife
Further, the Supreme Court in the case of Krishna Prasad vs CIT reported at 97 ITR 493 held as follows:
Family always signifies a group. Plurality of persons is an essential attribute of a family. A single, person male or female, doesn’t constitute a family. A family consisting of a single individual is a contradiction in terms. Section 2(31) of the Income-tax Act, 1961 treats a Hindu Undivided family as an entity distinct and different from an individual. Assessment in the status of a HUF can be made only when there are two or more members of the HUF.
Thus, in no unequivocal terms, it can be said that a single member cannot claim the status of HUF. Oiie must not confuse between a sole coparcener and a single member. A HUF can very well consist of a sole surviving coparcener and another member who may not be a coparcener. In such a case, there are two members and not a single member in the HUF.
A sole surviving coparceners holds the ancestral property but would be assessed as an individual in the absence of any other member / coparcener. However if he adopts a child, it would immediately assessable as HUF because the adopted child would have equal share in the ancestral property.