Law: Income Tax Act, 1922

Section: 24B

Law: Income Tax Act, 1922

Section: 24B

Section 159, read with sections 170 and 222, of the Income-tax Act, 1961 [Corresponding to section 24B, read with sections 26(2) and 46 of the Indian Income-tax Act, 1922] - Legal representatives - Assessment years 1950-51 and 1951-52 - Whether where assessment was made under section 24B of 1922 Act, liability of legal representatives would confine to estate of deceased in their hands, without incurring any personal liability and they could not be proceeded against personally for realisation of tax due under section 26(2) of 1922 Act - Held, yes FACTS In respect of the profits and gains derived by one R, from his business for the assessment years 1950-51 and 1951-52, notices were issued to him under section 22(2) of the 1922 Act, but, before they could be complied with, R died. Consequently, his legal representatives filed returns, disclosing income which were exigible to taxes for the year 1950-51 and 1951-52. On the basis of these returns, assessments were made under section 24(2) of the 1922 Act on the estate of the deceased, represented by his legal representatives. Thereafter, the revenue authorities realised a sum from the estate of the deceased and for the balance, the department proceeded against the properties of the legal representatives by a resort to section 26(2) of the 1922 Act. Since these amounts were not paid by the legal representatives successive certificates were issued under section 46(2) of the 1922 Act. On writ : HELD Indubitably, the income that was made exigible to the tax was earned by the person succeeded. The question that fell to be determined was whether the proviso to section 26(2) of the 1922 Act was attracted to the case so as to make the legal representatives personally liable for this tax. It was not disputed that the latter part of the proviso to section 26(2) of 1922 Act was inapplicable, because the assessment was not made during the lifetime of the deceased person. So, the only problem that had to be solved was whether the first part of the proviso came into operation in the instant case. A reference to the terms of this part of the proviso clearly discloses that it is only in cases where a person succeeds to the business…

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