K P NARAYANAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to us by the Income-tax Appellate Tribunal, Cochin Bench, is in these terms :

(2.) THE facts and circumstances of the case are that one Sri P. K. Raman who was ordinarily resident in Ceylon and who was doing business in Colombo had executed a will dated June 21, 1945, (annexure "A"), bequeathing large estates and properties owned by the said Raman. Mundan, the brother of Raman, was appointed executor under the will. Raman died on June 8, 1948. Till and up to the assessment year 1954-55, the assessments were made on Mundan in his capacity as the executor of the estate of late P. K. Raman. Though on the basis of a return filed by Mundan for the assessment year 1955-56, an assessment had been made, that assessment was set aside, the matter having been reopened under Section 34 of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act). Mundan in the meantime died and one K. P. Narayanan, another brother of the deceased, was appointed by the court to which Mundan had applied for a probate, as administrator. Notice was issued to the said Narayanan and since there was no response an assessment was made for the year 1955-56, under Section 23(4) of the Act. THE same procedure was followed for the year 1956-57. THE assessee filed appeals and contended that a compromise had been entered into when the proceedings for probate was pending before the District Court, Colombo, and that thereafter the position of the executor, Mundan, was that of a trustee and hence it was urged that the legatees were to be assessed under Section 41 of the Act. THE other points raised in the appeals are not relevant for this reference. THE appeals were rejected by the Appellate Assistant Commissioner by order, annexure "D". THEre were further appeals before the Tribunal and those appeals also have been dismissed.

(3.) THE only other paragraph of the compromise which is relevant is paragraph 14 which is in these terms :