CHOOHARMAL WADHURAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THERE is only one question which now remains to be determined on this reference. There were originally five questions referred to us for our opinion but of them, the third was not pressed on behalf of the assessee and the first, second and fourth were decided against the assessee when the reference was earlier heard by us. Our decision disposing of those questions is now reported as Chooharmal Wadhuram vs. CIT (1968) 69 ITR 88 (Guj). The fifth question could not be disposed of by us at that time as we felt that in view of certain observations made by the Supreme Court in First Addl. ITO vs. Mrs. Suseela Sadanadan (1965) 57 ITR 168 (SC) : TC44R.209, it was necessary to call for a supplemental statement of the case. The supplemental statement of the case has how been received and hence, the reference is before us for the determination of the fifth question.

(2.) THE facts giving rise to the reference have already been stated by us in our earlier judgment and it is, therefore, not necessary to rehearse them over again but in order that the discussion of the arguments which have been advanced before us may be intelligible, it would be desirable if we state a few facts bearing directly on the fifth question. The notices issued by the ITO for reopening the assessment of the deceased, Chooharmal Wadhuram, for the asst. yrs. 1946 47 and 1947 48 under S. 34(1) (a) were addressed to "Chooharmal Wadhuram, legal representatives Daulatram and others" and though there were admittedly apart from Daultaram, other legal representatives of Chooharmal Wadhuram, namely, three other sons and a widow named Lilavati, the notices were served only on Daulatram and were not served on the other legal representatives. On these facts the assessee contended that, since the notices were not served on all the legal representatives of Chooharmal Wadhuram, the proceedings were not validly initiated and the order of the assessment made against the assessee invalid. The Tribunal took the view that so far as the account in the name of Daulatram Chooharmal with M/s Narandas Parshottamdas was concerned, Daulatram had operated on this account and all the adjustments which had been made in this account were the result of negotiations between the Daulatram and M/s Narandas Parshottamdas and Daulatram had, therefore, administered that part of the estate of Chooharmal Wadhuram which consisted of the amount deposited in this account and, in the circumstances, the notices served on Daulatram as legal representative of the deceased were sufficient to bind his estate. The validity of this view taken by the Tribunal is challenged before us on behalf of the assessee and the point which is raised in the fifth question is whether the proceedings under S. 34(1)(a) were validly initiated by serving notice under S. 34(1)(a) on Daulatram alone, though there were, besides him, other legal representatives of the deceased.

(3.) SUB s. (1) of S. 24B make, inter alia, the legal representative liable to pay out of the estate of deceased person to the extent to which the estate is capable of meeting the charge, the tax assessed as payable by such person or any tax which would have been payable by him under the Act if he had not died. The effect of the sub section is, to quote the words of Hidayatullah J., as he then was, in Addl. ITO vs. E. Alfred (1962) 44 ITR 442 (SC) : TC44R.342 that :