COMMISSIONER OF INCOME TAX Vs. P DHANALAKSHMI

JUDGEMENT

(1.) AT the instance of the Department under s. 256(1) of the IT Act, 1961, the Tribunal referred the following questions for our opinion :

(2.) ONE K. Periaswamy, who was being assessed in the status of individual up to the asst. yr. 1975-76, died on 28th Aug., 1975. His wife, P. Balammal, assessee in RA No. 1367/ (Mad) of 1980, his mother, Meenakshi, assessee in RA No. 1366/ (Mds) of 1980 and four daughters, one of whom, P. Dhanalakshmi, assessee in RA No. 1365/ (Mds) of 1980, are the legal representative 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 asst. yr. 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 s. 168 of the IT Act, 1961, in the representative capacity. However, the ITO did not accept the contention put forward by the assessee. The ITO was of the view that on the death of the deceased, his heirs succeeded to the properties under s. 8 of the Hindu Succession Act. The ITO pointed out that they took the estate as tenants-in-common, as provided under s. 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 of each heir.

(3.) BEFORE this Court, learned standing counsel for the Department submitted that s. 168 of the Act would apply only in the case of testamentary succession. According to learned counsel, for intestate succession, s. 168 has no application. Learned counsel further submitted that according to the Expln. to s. 168 , the executor must be a person appointed by the Court and a person, who, in fact, is administering the estate, is not entitled to claim to be the executor or administrator under s. 168 of the Act. Therefore, it is the contention of learned counsel appearing for the Department that unless the executor or the administrator is appointed by the Court, in the matter of the testamentary succession, assessment cannot be made under s. 168 of the Act, in the representative capacity. In the present case, learned counsel pointed out that the succession is only intestate and as soon as the deceased died, the estate would have devolved upon the legal heirs, since succession cannot be kept in abeyance after the death of the deceased. It was, therefore, submitted that in the present case, it is not possible to make an assessment under s. 168 of the IT Act. On the other hand, none was present on behalf of the assessee.