1974 (9) TMI 45 - HC - Income Tax

Summary

Issues:
1. Validity of recovery proceedings for annuity deposit amounts post omission of section 280T.
2. Liability of legal representative to pay annuity deposit amounts.

Analysis:
1. The petitioner challenged the validity of the recovery proceedings for annuity deposit amounts for the years 1965-66 and 1966-67 based on the omission of section 280T post April 1, 1967. The court referred to a previous decision and held that liability to pay annuity deposit existing before the omission could be enforced post omission using the General Clauses Act. Thus, the first contention was rejected.

2. The second contention raised was regarding the liability of a legal representative to pay annuity deposit amounts. The petitioner argued that Chapter 22A of the Income-tax Act should be the sole basis for recovery and that without specific provisions enabling recovery from legal representatives, the liability ceases with the deceased. However, the court disagreed, stating that the legal representative can be proceeded against as representing the deceased's estate. Section 159 of the Income-tax Act holds the legal representative liable for sums the deceased would have been liable to pay, including annuity deposits. The court emphasized that the liability for annuity deposits remains even after the omission of section 280T and amendments to section 156.

3. The court highlighted that annuity deposits are recoverable under Chapter 17-D of the Income-tax Act, even after the omission of section 280T and amendments to section 156. The legal representative's liability to pay annuity deposits is upheld under section 159, as it covers sums payable by the deceased under the Income-tax Act, including annuity deposits. The court dismissed the writ petition, upholding the recovery proceedings for annuity deposit amounts against the legal representative.