9911796707
TMI Blog1999 (3) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ears ; (iv) issue a writ, order or direction commanding the respondents to compensate the petitioner for mental agony and harassment caused solely on account of grossly illegal acts of the said respondents and its officers for no fault of the petitioner, such compensation being not less than Rs. 50,000." The petitioner's case is that during the period July 23, 1986, to August 6, 1986, a search and seizure operation was carried out by the income-tax authorities at the residential premises of the petitioner and her husband, Sri Kripa Shanker Sengar. During the course of the said search several items of property were seized. Amongst them were two National Savings Certificates bearing Nos. 092455 and 092456 of Rs. 5,000 each that were purchased by the petitioner on March 5, 1986. The petitioner claimed the same belong to her and have been found to belong to her. In addition jewellery valued at Rs. 1,74,788 was also seized which the petitioner claimed to belong to her and was held to be so. The petitioner's case is that her assessments for the relevant assessment years, i.e., 1986-87 and 1987-88 were settled on March 27, 1989 and March 28, 1989 respectively. The assessment for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls with the liability of a legal representative. Before proceeding further it would be appropriate to reproduce the relevant provisions of the Act on a consideration of which the answer to the controversy between the parties would depend. Sub-sections (5) and (6) of section 132 of the Act reads as under : "(5) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) is seized under sub-section (1) or sub-section (1A), as a result of a search initiated or requisition made before the 1st day of July, 1995, the Income-tax Officer, after affording a reasonable opportunity to the person concerned of being heard and making such enquiry as may be prescribed, shall, within one hundred and twenty days of the seizure, make an order, with the previous approval of the joint Commissioner,--- (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him ; (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (i) of that sub-section relates (including any penalty levied or interest payable in connection with such assessment or reassessment) and in respect of which he is in default or is deemed to be in default may be recovered out of such assets. (ii) If the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied. (iii) The assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, Tax Recovery Officer under authorisation from the Chief Commissioner or Commissioner under sub-section (5) of section 226 and the Assessing Officer or, as the case may be, Tax Recovery Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule. (2) Nothing contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub-section (2) of section 161, section 162 and section 167, shall, so far as may be and to the extent to which they are, not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability." Sub-section (5) of section 132 of the Act shows that the Income-tax Officer has to make an order regarding the retention/return of the assets within a specified time and the assets to the extent they are not required for discharging the liabilities have to be returned forthwith. Sub-section (6) of the Act then provides that the assets retained under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. Sub-section (4), therefore, limits the liability of a legal representative to the extent of the properties which are or which may come into his possession and sub-section (4) can be invoked only by the Recovery Officer while proceeding for the recovery of the dues pertaining to Shri K. S. Sengar. For appreciating the provisions of sub-section (4) aforesaid, we may usefully refer to the provisions of sections 50 and 52 of the Code of Civil Procedure which stand as under : "50. Legal representative.---(1) Where a judgment debtor dies before the decree has been fully satisfied, the holder of the decree may apply to the court which passed it to execute the same against the legal representative of the deceased. (2) Where the decree is executed against such legal representative, he shall be liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it not being in the possession of the legal representative could not be attached in execution against his legal representatives. When we read the provisions of sub-section (4) of section 159 of the Act and take guidance from the provisions contained in the Code of Civil Procedure and their interpretation by the various High Courts, the result is that the tax dues of a deceased can be recovered only from the properties left by the deceased and coming into the hands of the legal representative. Therefore, in the recovery proceedings in respect of the dues of Shri K. S. Sengar the house is said to have devolved from him to the deceased and any other property that also so devolved from the deceased to the present petitioner can be attached and sold and if the petitioner is found to have created a charge on or disposes of or parts with any assets of the estate of the deceased which came into his possession, then to the extent of the value of the assets so charged, disposed of or parted with, the petitioner can be held to be personally responsible and proceedings for realisation of such amounts can be taken against the personal properties of the petitioner. But as stated above that is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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