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TMI Blog1965 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... f time, with the vicissitude of fortune, the exclusive ownership of the John family gave way to co-ownership with a number of others. In 1949, one Seth Loon Karan Sethiya filed a suit for money in the court of the Civil Judge, Agra, against the co-owners. In this suit, the court appointed two receivers over the mills for the purpose of protecting and preserving them. To their powers was subsequently added the power of realising rent and income accruing from the property. Pursuant to directions issued by the court, the several mills were given out on lease on payment by the lessees of specific sums as lease money by the month. The joint receivers were replaced about the year 1955 by a single receiver, Bishambhar Dayal Agrawal, and upon his d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent to file returns in respect of the assessment years 1959-60 onwards but the petitioners demurred on the ground that they were not liable to file any returns for the period prior to their appointment as receivers. The respondent pressed for the returns, taking his stand on the contents of the judgment of Manchanda J. which he understood as determining that the petitioners were liable to assessment as successors of the earlier receiver. Thereupon the petitioners filed the instant petition for certiorari and prohibition against the notices dated February 14, 1964, and the consequential proceedings. At the outset a preliminary objection has been raised by the respondent. It is pointed out that in the petition heard by Manchanda J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te as res judicata. The respondent also urges that the petitioners are barred by estoppel, but have not indicated how that is so. Whether the petitioners are liable to assessment for the assessment years before they were appointed as receivers may now be considered. Chapter XV of the Income-tax Act, 1961, makes provision for liability in special cases. The Chapter attempts to cover those cases where, apart from making an assessment directly upon the persons who may have earned the assessable income, an assessment may be directed alternatively against others who stand in a representative capacity in relation to them. Such persons have been described as " representative assessees " by the Act, and section 160(1)(iii) defines one class of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the benefit of, any person. A receiver appointed to manage property is ordinarily entitled to receive income arising from that property. The right to receive the income is one of the incidents flowing from the right to manage the property. It was not for that purpose, therefore, that Parliament considered it necessary to specifically include the words " receives or is entitled to receive " in the definition. On the contrary, those words must be taken to have the meaning familiar to them in the law of income-tax. It is well known that income may accrue to a person and it may be received by him, and for the purposes of income-tax liability, depending upon the system of accounting, mercantile or receipt, a person is liable to tax for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me because he has actually received it. It must be remembered that the purpose of the definition is to define a class of assessees. That is plain from sub-section (2) of section 160. An " assessee " is defined by section 2(7) as a person by whom income-tax is payable. The category of "representative assessees" has been created for the purpose of subjecting them to assessment. A representative assessee therefore can be so only in respect of income which is liable to be assessed in his hands, and such income can only be that which is earned at a time when he occupies that status. In my opinion, the contention of the respondent thal the petitioners are " representative assessees " within the meaning of section 160(1)(iii) must fail. The respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal representatives. I am unable to accept the contention. In order that a person should be a " legal representative ", the estate of the party, who sues or is sued in his representative character, should devolve on that person on the death of the party. A receiver is merely an officer of the court. The property over which he is a receiver does not vest in him. It does not appear that there was any estate of the deceased receiver which devolved upon the petitioners. Moreover, the petitioners were appointed receivers some days after the death of the previous receiver and their appointment took effect from the date of the order of appointment. It cannot be said that the estate, assuming there was one, devolved on the death of the previous rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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