Law:

Section:

Section 168 of the Income-tax Act, 1961-Representative assessee-Executor-Whether, in case of undistributed estate of a coparcener in HUF, widow can be taxed on proportionate share of HUF when her right in estate was not recognised and estate was administered by some other person-Held, no Facts The assessee, a widow of a coparcener in a HUF, filed returns for the assessment years 1961-62 to 1963-64 showing incomes of Rs. 3,589, Rs. 5,423 and Rs. 6,070 respectively. On 16-8-1963, a compromise was made and the assessee received Rs. 10,70,000 in full satisfaction of her claim as widow. On the basis of details available from the returns filed by the assessee's mother-in-law who was administering the estate, the ITO added in the assessee's hands one-sixth share of HUF's income derived from the property, business and other sources in the said assessments. In an appeal before the AAC, the assessee contended that she had not received any part of the share of the deceased's income and was, therefore, not taxable in respect thereof. The AAC found that, during the relevant periods, the estate was undistributed and was administered by the assessee's mother-in-law. The assessee could not be taxed even on accrual basis since her right to receive such income was never recognised during the relevant period. The AAC, therefore, held that till the estate was distributed, the assessee did not attract tax liability on the share income from the estate. He, accordingly, deleted the additions made by the ITO. The Department's appeal before the Tribunal was unsuccessful. The Tribunal took the view that the assessee did not receive any income either in her personal capacity or as an administrator and was, therefore, not liable to tax thereon. The income of undistributed estate would be taxable in the hands of the administrator. On reference : Held It was found as a fact that the estate was not being in assessee's possession but was administered by her mother-in-law. In terms of section 168 and, particularly of the Explanation to that section, the income-tax authorities had no discretion except to tax the income in the hands of the executor who is in de facto management of the property.…

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