1977 (6) TMI 7 - HC - Income Tax

Issues Involved:
1. Validity of assessment proceedings under the Estate Duty Act without notice to all legal representatives.
2. Joint and several liability of legal representatives under the Estate Duty Act.
3. Validity of demand notice for the entire estate duty payable.
4. Validity of attachment proceedings for recovery of estate duty.

Issue-wise Detailed Analysis:

1. Validity of Assessment Proceedings without Notice to All Legal Representatives:
The petitioner argued that under Muhammadan law, the estate of a deceased devolves immediately on the heirs in definite shares, and proceedings taken against the estate with notice to only some of the legal representatives are invalid. The court noted that the Estate Duty Act allows for assessment against one of the legal representatives who is an accountable person, as long as the liability is restricted to the assets derived from the deceased. The court referenced the Gujarat High Court decision in Commissioner of Income-tax v. Mrs. Indumati Ratanlal, which clarified that while the liability of an accountable person is personal, it is limited to the assets of the deceased. The court also cited the Allahabad High Court decision in Vijay Kumar Kedia v. Controller of Estate Duty, which held that an assessment can be made on the return filed by one accountable person without involving other accountable persons.

2. Joint and Several Liability of Legal Representatives:
The petitioner contended that the liability of the legal representatives is joint and several, and that the joint and several liability of the remaining 11 legal representatives ceased due to the earlier judgment (Exhibit P-2). The court referred to sections 53(5) of the Estate Duty Act, which states that where two or more persons are accountable, they shall be liable jointly and severally for the whole estate duty. The court also discussed the decision in Ameen Pillai v. Assistant Controller of Estate Duty, which highlighted that only the "assessee in default" could be subjected to coercive process. However, the court emphasized that the petitioner was a party to the proceedings, and thus the decision in Ameen Pillai did not apply.

3. Validity of Demand Notice for the Entire Estate Duty Payable:
The petitioner argued that the demand notice issued under section 73 of the Act for the entire estate duty payable was invalid. The court examined section 58(4) of the Estate Duty Act, which allows the Controller to make an assessment to the best of his judgment if no account has been delivered as required. The court concluded that the proceedings initiated against the petitioner were not wholly without jurisdiction or invalid, as the Estate Duty Act permits assessment against one accountable person.

4. Validity of Attachment Proceedings for Recovery of Estate Duty:
The petitioner objected to the attachment proceedings, arguing that he would not be liable for the entire estate duty. The court noted that section 73(5) of the Estate Duty Act attracts the provisions of sections 46 and 47 of the Indian Income-tax Act, 1922. The court referred to the Division Bench decision in Isha Beevi v. Tax Recovery Officer, which stated that attachment for a larger amount than recoverable does not invalidate the proceedings. The court also mentioned the Supreme Court affirmation of this principle. The court concluded that the petitioner must seek remedies under the provisions of section 46 of the Indian Income-tax Act, 1922, if applicable.

Conclusion:
The court dismissed the writ petition, stating that the proceedings against the petitioner were not without jurisdiction or invalid. The petitioner was advised to seek remedies under section 46(2) of the Indian Income-tax Act, 1922, if applicable. The court made no order as to costs.

← Previous Next →