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Validity of notice under section 34 of the Indian Income-tax Act, 1922 served to the administrator of the deceased person's estate. Detailed Analysis: The case involved a reference under section 66(1) of the Indian Income-tax Act, 1922, initiated by the Commissioner of Income-tax, West Bengal II, Calcutta. The matter concerned the assessment years 1952-53 and 1953-54 related to the estate of a deceased individual, Late Madan Shum Sher Jung Bahadur Rana of Nepal, with Shantilal C. Mehta as the administrator. The Income-tax Officer issued notices under section 34 to the administrator for reassessment, which led to appeals by the assessee challenging the validity of the notices served in the name of the administrator. The Appellate Assistant Commissioner and the Tribunal held that the notices were invalid as the liability to pay tax accrued to the deceased individual during his lifetime and not to the administrator. The Tribunal emphasized that the liability of the administrator to be assessed for tax arose only after the death of the deceased under general law provisions. The key question referred was whether the proceedings under section 34 were validly initiated by the notices served to the administrator. The revenue contended that section 24B of the Act makes the legal representative liable to pay the tax assessed or payable by the deceased person out of the estate. Citing legal precedents, the revenue argued that notices served to legal representatives in case of deceased persons are valid for assessment proceedings. The case law highlighted the legal fiction created where legal representatives are treated as the assessee for assessment purposes after the death of the original assessee. The Court distinguished a previous case where the assessment was challenged based on the nature of income and the recipient. It was clarified that in the present case, the liability for tax payment rests with the estate of the deceased, and assessment proceedings can continue against the legal representatives. The Court upheld the validity of the notice served to the administrator and ruled in favor of the revenue, emphasizing that there is no personal liability of the administrator beyond the estate assets. In conclusion, the Court answered the referred question in the negative, supporting the revenue's position. The judgment highlighted the applicability of section 24B in assessing tax liabilities of deceased individuals through their legal representatives and affirmed the validity of the notice served in this case. Judge C. K. Banerji concurred with the judgment, and no costs were awarded due to the absence of contest by the assessee.
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