1982 (2) TMI 14 - HC - Income Tax

Summary

Issues Involved:
1. Interpretation of sections 159 and 168 of the Income Tax Act, 1961.
2. Determination of the proper person for assessment of the deceased's income.
3. Legal status and role of the administrator appointed by the court.
4. Applicability of sections 211, 241, and 243 of the Indian Succession Act.
5. Definition and scope of "legal representative" under the Income Tax Act and Civil Procedure Code.

Detailed Analysis:

1. Interpretation of Sections 159 and 168 of the Income Tax Act, 1961:
The primary issue was whether the Appellate Tribunal was justified in holding that the assessments for the income of the deceased, which accrued or was received until his death, could be made on the "Rani" as his sole heir and legal representative. The court examined sections 159 and 168 of the I.T. Act, 1961. Section 159 deals with the assessment of the income of the deceased which accrued to or was received by the deceased in his lifetime. Section 168 pertains to the assessment of the income of the deceased which accrued after his death during the period the estate was vested in the executor, administrator, or other person administering the estate.

2. Determination of the Proper Person for Assessment:
The Tribunal initially held that identical assessments had been made on Shri Shantilal Mehta, the administrator appointed by the High Court, and the same income could not be assessed twice. The AAC, upon reconsideration, held that Shri Shantilal Mehta, as the administrator, was the proper person on whom the assessments should have been made for both the income accrued to the deceased until his death and the income received by the estate thereafter. The Tribunal later reversed this, asserting that the "Rani" was rightly treated as the legal representative and assessed for the income accrued to the deceased until his death.

3. Legal Status and Role of the Administrator Appointed by the Court:
The AAC referred to sections 211(1), 241, and 243 of the Indian Succession Act to determine the role of the administrator. Section 211(1) states that the executor or administrator is the legal representative for all purposes, and all property of the deceased vests in him. Sections 241 and 243 allow for the appointment of an attorney or agent as an administrator when the person entitled to administration is absent. The AAC concluded that the administrator was the legal representative for all purposes from the date of the deceased's death until the administrator's discharge.

4. Applicability of Sections 211, 241, and 243 of the Indian Succession Act:
The court considered the provisions of the Indian Succession Act to understand the administrator's role. Section 211(1) establishes the executor or administrator as the legal representative. Section 241 allows for administration with the will annexed to an attorney of an absent executor, and Section 243 applies similar provisions to cases of intestacy. The AAC's interpretation was that the administrator's title related back to the time of the deceased's death, making him the legal representative for assessment purposes.

5. Definition and Scope of "Legal Representative":
The court examined the definition of "legal representative" under section 2(29) of the I.T. Act, which refers to the meaning assigned in section 2(11) of the CPC. The CPC defines a legal representative as a person who represents the estate of a deceased person, including those who intermeddle with the estate. The court concluded that the administrator appointed by the court was the legal representative for assessment purposes, not the "Rani".

Conclusion:
The court held that the assessment should have been made on the administrator as the legal representative, not the "Rani". The Tribunal's decision to assess the "Rani" was incorrect. The assessment should be made on the legal representative, i.e., the administrator appointed by the court, in accordance with the provisions of section 159 of the I.T. Act. The court denied the Revenue's oral application for special leave to appeal to the Supreme Court, stating no substantial question of law required consideration by the Supreme Court.