2008 (2) TMI 310 - HC - Income Tax

AO held that Income arising from the estate of the deceased husband of the assessee had to be taxed in the hands of assessee as an individual assessee s contention is that she was assessable as an executor widow of the deceased is only legal heir - held that Tribunal was justified in directing deletion from assessee s income revenue is bound by the judgment rendered by the jurisdictional High Court between same parties

Summary

Issues:
1. Assessment of income from properties of deceased husband in the hands of the surviving wife under sections 159 and 168 of the Income Tax Act, 1961.
2. Justification of Tribunal's decision based on the Supreme Court judgment in Navnitlal Sakerlal Vs. C.I.T. regarding deletion of specific sums from the wife's income.
3. Deletion of income from properties of deceased husband for the assessment years 1981-82 and 1982-83 from the individual assessment of the surviving wife.

Analysis:

Issue 1:
The dispute revolves around whether the income from the properties left by the deceased husband should be assessed in the hands of the surviving wife individually or as the executor of the deceased's estate. The Revenue argued for individual assessment due to intestate succession, while the Tribunal disagreed. The Tribunal considered that the wife had been assessed as an executor by the Income-tax officer, Indore, for several assessment years and that the estate administration was incomplete during the years under appeal. Relying on the Supreme Court's decision in Navnit Lal Sakarlal, the Tribunal concluded that the wife need not be assessed for the income from the deceased's estate.

Issue 2:
The Tribunal's decision to delete specific sums from the wife's income based on the Navnitlal Sakerlal judgment was challenged. The Revenue contended that the provisions of section 168 of the Income Tax Act and section 19A of the Wealth Tax Act apply only in cases of testate succession, not intestate. However, the Tribunal upheld its decision, considering the wife's status as an individual and the incomplete estate administration. The High Court of Madhya Pradesh had previously ruled in a similar case, which was accepted by the Revenue, binding the present case.

Issue 3:
The Tribunal's decision to delete the income from the deceased husband's properties for the relevant assessment years from the wife's individual assessment was further scrutinized. The wife's counsel argued against permitting the Revenue to take a contrary stance to the High Court's decision. It was emphasized that the Revenue had accepted the previous judgment, making it binding in the present case. The High Court upheld the Tribunal's decision, citing the acceptance of the previous judgment by the Revenue and the principle that the Revenue cannot contest its binding effect.

In conclusion, the High Court returned the reference unanswered, affirming the Tribunal's decision and disposing of the matter accordingly. The judgment highlights the importance of consistent legal interpretations and the binding nature of previous court decisions on similar matters involving the same parties.