1962 (4) TMI 3 - SC - Income Tax

Summary

Issues:
1. Validity of the certificate issued under section 46(2) of the Income-tax Act.
2. Interpretation of the term "arrears due from an assessee" in section 46(2).
3. Applicability of sections 45, 46(1), and 46(2) to legal representatives of an assessee.

Analysis:

The case involved the validity of a certificate issued under section 46(2) of the Income-tax Act to recover tax arrears from a legal representative of a deceased assessee. The respondent, a legal representative, challenged the certificate and the recourse to provisions of the Revenue Recovery Act. The High Court focused on whether the sum demanded from the respondent based on the certificate could be considered "arrears due from an assessee." The High Court relied on a previous decision in Alfred's case, which distinguished between an "assessee" and "other person" under section 29 of the Act. The High Court held that a legal representative cannot be treated as an assessee under section 46(1). Therefore, the High Court quashed the certificate and set aside the notice issued by the Tahsildar.

However, a subsequent decision by the Supreme Court in Additional Income-tax Officer v. Alfred reversed the interpretation given in Alfred's case. The Supreme Court clarified that the legal representative of an assessee is deemed to be an assessee for the purpose of tax assessment, levy, and collection. The distinction between an "assessee" and "other person" under section 29 does not affect the legal representative's liability as an assessee in default. Consequently, the provisions of sections 45, 46(1), and 46(2) apply to legal representatives, and the certificate issued under section 46(2) was deemed valid.

Therefore, the Supreme Court allowed the appeal, setting aside the High Court's judgment and dismissing the writ petition. The court held that both the certificate under section 46(2) and the notice issued were valid, emphasizing the legal representative's liability as an assessee for tax collection purposes. The decision clarified the applicability of tax recovery provisions to legal representatives of deceased assessees, establishing their obligation to pay tax arrears as if they were the assessee themselves.