9911796707
TMI Blog1974 (11) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... gust 2, 1952, under which the widow of the deceased became a partner and his two minor daughters were admitted to the benefits of the partnership. The deceased was in arrears of income-tax in respect of assessment years 1950-51 to 1952-53 to an extent of Rs. 69,335.94. Coming to know that the deceased at the time of his death had to his credit a sum of Rs. 29,328-11-2 in the partnership firm, recovery proceedings were initiated against the legal representatives in respect of that money. By a letter dated November 29, 1955, the Income-tax Officer informed the petitioner that the deceased was in arrears of income-tax to the extent of Rs. 69,335.94, that his legal representatives who, later on, have either become partners or been admitted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to forbear from taking any recovery proceedings against the petitioner in pursuance of the notice dated March 9, 1967, issued by the Income-tax Officer. It was contended by the petitioner before the learned single judge that the amount standing to the credit of the deceased was converted into share capital of his legal representatives when the firm was reconstituted on August 2, 1952, and that, therefore, the revenue could not recover the arrears. It was also contended that, since the heirs of the deceased were partners, they are entitled to withdraw the amount and that, therefore, the petitioner could not be held to have contravened the notice issued by the Income-tax Officer under section 46(5A). The learned judge was of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is any such conversion. There cannot be any dispute that on the day when the deceased died whatever property he died possessed of was inherited by the legal representatives. Under section 24B of the Indian Income-tax Act, 1922, the legal representatives are liable to pay out of the estate of the deceased inherited by them the tax assessed and payable by the deceased to the extent of the value of the estate inherited. If the legal representative, after he had inherited the assets of the deceased, had converted the asset into a different form, certainly the department will be entitled to proceed against the substituted asset in the same way as it could have had against the original asset of the deceased. Therefore, the legal representatives ..... X X X X Extracts X X X X X X X X Extracts X X X X
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