1988 (6) TMI 1 - HC - Income Tax

Summary

Issues:
1. Quashing of notice treating petitioner as legal representative of Hindu undivided family.
2. Interpretation of provisions regarding assessment of tax on deceased person.
3. Applicability of section 24 of Karnataka Agricultural Income-tax Act.
4. Comparison with decision of Madras High Court in Seethammal v. CIT.

Analysis:

The petitioner sought to quash a notice issued by the Agricultural Income-tax Officer treating him as the legal representative of the Hindu undivided family and directing him to file a return of income for the assessment year 1980-81. The petitioner argued that after the death of the head of the family, the Hindu undivided family ceased to exist, and therefore, he should not be considered a legal representative liable to file returns for the family. The respondent issued the notice based on the belief that the petitioner, as one of the representatives of the deceased, should file the return. The petitioner contended that since the Hindu undivided family was no longer in existence, there was no provision in the Act for him or his widow to file the return as karta of the family.

The court analyzed the provisions of section 24 of the Karnataka Agricultural Income-tax Act, which deal with the assessment of tax on a deceased person payable by their representative. The court noted that section 24 applies to a natural person who dies during an assessment year, and their legal representatives become liable to file returns for income derived during the deceased's lifetime. The court held that this principle could not be extended to the current situation where the Hindu undivided family had ceased to exist. The court cited the decision of the Madras High Court in Seethammal v. CIT, which emphasized that a family signifies a group, and a single person cannot constitute a family. Assessment in the status of a Hindu undivided family requires two or more members, and if the family ceases to exist, there is no legal fiction to maintain its assessment.

Based on the analysis of the legal provisions and the precedent set by the Madras High Court, the court allowed the writ petition, quashing the notice issued by the respondent under section 18 read with rule 24 of the Act. The court held that since the Hindu undivided family no longer existed, the petitioner could not be considered a legal representative for filing returns on behalf of the family. The parties were directed to bear their own costs in the circumstances of the case.