9911796707
|
Home
Issues Involved:
1. Interpretation of "legal representative" under Section 24B of the Indian Income-tax Act. 2. Validity of assessment on V. Ramanathan as the legal representative of the estate of K. Chidambara Reddiar. Detailed Analysis: 1. Interpretation of "legal representative" under Section 24B of the Indian Income-tax Act: The term "legal representative" is not defined in the Indian Income-tax Act. The court referred to Section 2(11) of the Civil Procedure Code, which defines a legal representative as a person who represents the estate of a deceased person in law, including anyone who intermeddles with the estate. The court emphasized that representation of the estate of the deceased is what confers representative character. Heirs, executors, administrators, and intermeddlers all effectively represent the estate to the outside world. The court noted that the liability of a legal representative under Section 24B is absolute but limited to the estate's capacity to meet the tax charge. 2. Validity of assessment on V. Ramanathan as the legal representative of the estate of K. Chidambara Reddiar: The court examined the facts: Chidambara Reddiar died, leaving his estate to his widow, Ponnammal, who later surrendered it to Vridhachala Reddiar, the nearest reversioner. Vridhachala blended these properties with his own, and upon his death, Ramanathan and his brother Rajagopalan inherited the estate. The Income-tax Officer issued a notice under Section 34 to Ramanathan, who objected, claiming he was not the proper legal representative. The court discussed that the estate of Chidambara had devolved through several hands, eventually becoming part of the joint family estate managed by Ramanathan. Ramanathan's contention was that the estate's character had changed, merging into the joint family assets, thus he should not be liable as an individual legal representative. The court held that the representative character of the estate does not change with the mode of dealing with the properties. Ramanathan, as the heir and in possession of the estate, is a legal representative under Section 24B. It was noted that an assessment proceeding is not invalidated merely because not all legal representatives are impleaded, provided the person proceeded against bona fide represents the estate. The court cited previous rulings, including Alfred v. First Additional Income-tax Officer, which established that an assessment is valid even if only one of several legal representatives is proceeded against, provided there is no fraud or collusion. The court concluded that Ramanathan, as the karta of the joint family, effectively represented the estate of Chidambara. Thus, the assessment on Ramanathan as the legal representative was valid. The question referred to the court was answered against the assessee, and Ramanathan was ordered to pay the costs of the department, with counsel's fee fixed at Rs. 250.
|
