Law:

Section:

Section 221, read with sections 2(7) and 156, of the Income-tax Act, 1961 (Corresponding to section 46(1), read with sections 2(2) and 29, of the Indian Income-tax Act, 1922) - Collection and recovery of tax - Penalty payable when tax in default - Assessment year 1946-47 - Whether a legal representative who, by fiction, is deemed to be an assessee, comes within definition of assessee because he is person by whom income-tax is payable, though out assets left by deceased - Held, yes - Whether words 'other person' as used in section 29 of 1922 Act cannot apply to legal representative, if he is an 'assessee' by fiction, and fiction has to be worked out to its logical conclusion - Held, yes Words and phrases : Words 'other person' as occurring in section 24 of the Indian Income-tax Act, 1922 FACTS One 'E' died intestate the respondent, son of 'E', was assessed under section 24B(2) of the 1922 Act, after a notice was issued to him under section 22(2). The assessment was completed and a notice of demand was issued under section 29. The respondent appealed against the order of assessment to the AAC but during the pendency of the appeal a penalty was imposed upon him under section 46(1) of the 1922 Act by the ITO, as the respondent defaulted in payment of tax on the due date. The respondent then filed a writ petition in the High Court challenging the imposition and levy of penalty imposed upon him. The High Court quashed the order imposing penalty on ground that the legal representative is not an assessee within the meaning of section 29 of the 1922 Act, but can only be brought under the words 'other person', and inasmuch as sections 45 and 46 of the 1922 Act refer to 'an assessee in default', the legal representative cannot be treated as such and no penalty can either be imposed upon him or recovered. On appeal to the Supreme Court : HELD In the instant case, the matter fell to be governed by the section 24B(2) of the 1922 Act because 'E' died before the end of his year of account. The service of the notice upon the respondent and his assessment, as if he were the assessee, were made under the second sub-section. By reason of this assessment, the respondent became…

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