COMMISSIONER OF INCOME TAX Vs. DHANALAKSHMI P SMT

JUDGEMENT

(1.) AT the instance of the Department under section 256(1) of the Income-tax Act, 1961, the Tribunal referred to following questions for our opinion :

(2.) ONE K. Periaswamy, who was being assessed in the status of individual up to the assessment year 1975-76, died on August 28, 1975. His wife, P. Balammal, assessee in R.A. No. 1367/ (Mds) of 1980, his mother, Meenakshi, assessee in R.A. No. 1366/ (Mds) of 1980 and four daughters, one of whom, P. Dhanalakshmi, assessee in R.A. No. 1365/ (Mds) of 1980, are the legal representatives of the deceased, K. Periaswamy. The deceased Periaswamy owned a building at Karur along with his brother, Ponnusamy, in equal shares. He was also a partner in the firms Amarjothi Fabrics and Amarjothi Traders, who were carrying on business in textiles. He retired from the partnership and the amounts due to him were held by the firms as deposits. He was getting interest from the firms out of the deposits. In the assessment year 1976-77, his wife, Balammal, filed a return, disclosing an income of Rs. 34,302 made up of Rs. 6,876 being income from property and Rs. 27,426 being income by way of interest for the period after the death of Periaswamy. In the return, Balammal claimed herself to be the administrator of the estate of the deceased. According to the assessee, the estate of the deceased devolved upon his heirs at law, viz., his wife, mother and four daughters, and they have not divided the same by metes and bounds. Therefore, the assessment was required to be made in respect of such income under section 168 of the Income-tax Act, 1961, in the representative capacity. However, the Income-tax Officer did not accept the contention put forward by the assessee. The Income-tax Officer was of the view that on the death of the deceased, his heirs succeeded to the properties under section 8 of the Hindu Succession Act. The Income-tax Officer pointed out that they took the estate as tenants-in-common, as provided under section 19(b) of the Hindu Succession Act. Consequently, each of them was entitled to one-sixth of the income, and since the deceased had died intestate, one-sixth of the income was liable to be assessed in the hands each heir.

(3.) THE Tribunal, considering the fact that the said Balammal was the de facto administrator of the estate, held that the assessment can be made in accordance with Explanation to section 168 of the Act. It remains to be seen that the Explanation under section 168 of the Act states that it would be applicable only in the case of the specific legatee. Legatees are entitled to succeed to the estate in accordance with the terms of the will. In the present case, the deceased has not executed any will in favour of the legatees. In the absence of the fact that the succession is a testamentary succession, section 168 of the Act cannot be made applicable. THE Explanation to section 168 states that in this section "executor" includes an administrator or other person administering the estate of a deceased person. This does not mean that the administrator includes the de factor administrator. While considering a question of a similar nature in Mahamaya Dassi v. CIT [1980] 126 ITR 748, the Calcutta High Court held that section 247 only contemplates the preservation of the property until the question as to the existence or the validity of the will is determined. An administrator pendente lite gets any right or authority not on the death of the testator but from the date of appointment and by virtue of appointment by the appropriate court. In view of the nature and duties required to be performed by the administrator pendente lite appointed under section 247 of the Succession Act and in view of the circumstances under which administration pendente lite can be made, an administrator pendent lite is not an administrator as contemplated by section 168 of the Income-tax Act and section 168 will not apply to him.