Law: Income Tax Act, 1922

Section: 23A

Section 104, read with section 159 of the Income-tax Act, 1961 [Corresponding to section 23A, read with section 24B of the Indian Income-tax Act, 1922] - Additional income-tax on undistributed profits of certain companies - Assessment years 1946-47 and 1947-48 - Deceased 'H' was holding certain shares of company 'C' - Bank obtained probate of H's will and appointed assessee 'J' its attorney to administer estate of 'H - After death of 'H', ITO found that certain dividend deemed to have been distributed among shareholders by aforesaid company - ITO, therefore, issued a notice under section 34(1)(b) to assessee and assessed it in his hands - Whether legal personality of H came to an end for purpose of section 24B at end of the account year in which H died and no tax could be levied under section 24B on dividends deemed to have been received by him or his legal representatives after end of that year - Held, yes - Whether charge to income-tax has to be in accordance with, and subject to provisions of Act, and Legislature has not provided that income received by a legal representative which would, but for death of deceased, have been received by such deceased person, is to be regarded for purpose of assessment as personal income of legal representative - Held, yes - Whether, therefore, assessment made on assessee was invalid in law - Held, yes FACTS The deceased 'H' was a registered holder of certain shares, of company 'G'. The bank obtained a probate of H's will and appointed the respondent 'J' its attorney to administer the estate. By an agreement, dated 14-8-1946 between the executor of the estate, the company and one 'M', the executor agreed to sell the shares of the company to 'M' and pursuant thereto the relevant share certificates with transfer deeds were handed over to 'M' on 12-10-1946, against payment of the price. 'M' for some reason which was not clear from the record, failed to present the transfer deeds and the share certificates for registration at the office of the company and the name of 'H' remained at all material times on the register of shareholders in respect of those 2,224 shares. For the assessment years 1946-47 and 1947-48, the ITO made an…

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