1972 (5) TMI 18 - HC - Income Tax

Petitioner constitute the legal representatives of the deceased, P. Kunhi Bava, who was an assessee under the Agricultural Income-tax Act - Whether legal representative can be assessed on the income of whole year of the deceased for the previous year

Summary

Issues:
Interpretation of Section 24 of the Agricultural Income-tax Act regarding the liability of legal representatives for tax assessment after the death of the assessee.

Detailed Analysis:

The judgment delivered by the High Court of Kerala dealt with the interpretation of Section 24 of the Agricultural Income-tax Act concerning the liability of legal representatives for tax assessment after the death of the assessee. The case involved the legal representatives of a deceased individual who was being assessed for agricultural income tax until the assessment year 1968-69. The deceased passed away on July 18, 1968, and the legal representatives contended that they should only be assessed as tenants-in-common for the period after the death of the deceased. However, the Agricultural Income-tax Officer assessed the legal representatives for the entire income from the deceased's properties as if it belonged to the deceased, which was challenged in the original petition.

The court referred to Section 24 of the Agricultural Income-tax Act, which states that the legal representatives of a deceased person shall be liable to pay tax from the estate, and they are liable to pay the tax as if the deceased person had not died. The court also cited the Supreme Court's interpretation of the corresponding section in the Indian Income-tax Act, emphasizing that legal representatives are liable for income tax on the deceased's income received before and after death only for the previous year in which the death occurred, not for subsequent years.

The court further discussed a Supreme Court case where the liability of legal representatives for income tax was examined, emphasizing that legal representatives are liable to be assessed for income received by the deceased up to the date of death and by the legal representatives during that year, but not for income in subsequent years. The court clarified that the legal representatives should be assessed for the period up to the date of death of the deceased and independently as tenants-in-common for the period after the death. Consequently, the assessment made by the Agricultural Income-tax Officer was quashed, allowing for a fresh assessment in accordance with the law.

In conclusion, the court ruled in favor of the legal representatives, directing them to be assessed as per the provisions of Section 24 of the Agricultural Income-tax Act, and quashed the previous assessment orders. The judgment highlighted the limited scope of liability for legal representatives and emphasized the need for a fresh assessment in compliance with the law.