# COMMISSIONER OF INCOME-TAX, BOMBAY v. JAMES ANDERSON

- **Citation:** [1964] 5 S.C.R. 590
- **Court:** Supreme Court of India
- **Decided:** 1963-12-02
- **Bench:** A.K. Sarkar, M. Hjdayatullah, J.C. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissioner-of-income-tax-bombay-v-james-anderson-2997
- **Pages:** 12

## Headnote

Income tax Act (XI of 1922), s. 24B-Scope of-Death of Shareholder-Liability of legal representative-Extent of.
G, a holder of certain shares of a private limited company
made a will disposing of his estate and died on May 13, 1945.
The respondent obtained Letters of Administration "durante
absentia" to the estate, and in pursuance of an agreement between
himself, the company and one M to sell the shares to M, handed
over the share certificates to M against payment of the price. M
failed to present the share certificates for registration and the name
i
,.
H .
'
•
.....
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•
5 S.C.R.
SUPREME COURT REPORTS..
591 ..
of G remained on the register of shareholders of the Company.
1963
The Income-tax Officer made an order under s. 23Aofthe Income-tax
Act <:is it then stood) that certaL..'.··_ distributed part of the as_ses~- Commissioner of
able income of the company sha•r.~' deemed to have been distnIncome-tax
buted as dividend amongst the ·,.c-.• , holders as at the dates of the
Bo b
'
general meetings, vi.:., May :.~. 1947 and December 22, 1947.
m ay
The Income-tax Officer then .: .. ~ed a notice under s. 34(1) (b) to
v.
the respondent proposing to re-assess his income and calling upon James Anderson
him to file a return for the relevant year. The respondent sub-
'
milted a return, but did not include the dividend deemed to have
been distributed by the order passed under s. 23A The Income-tax
Officer included the dividends in the total income of the respondent
and levied tax. The respondent's appeals to the Appellate Assistant
Commissioner and the Income-tax Appellate Tribunal were unsuccessful. On reference, the High Court held that the assessment
made on the respondent Administrator to the estate of G (deceased)
was not valid in law. In appeal by special leave:
Held (i) The legal representative does ;;ot. acquire in all ·
cases, the right of a share-holder in respect of shares of which the
deceased was registered as holder. But ifthe estate of a share-holder
of a company is by. virtue. of the Articles of the Company liable
in respect of calls whether made during the life-time of the holder
or after his death,· the legal representative is obliged to satisfy
the calls in his representative character.
(ii) There is no special machinery devised by the Income-tax
Act enabling assessment and levy of tax in respect of such deemed
income from the estate of the share-holder, in the hands of his
legal representative when . the order of the Income-tax Officer
pursuant to which the income was to be deemed to be distributed
becomes effective was made after the death· of the share-holder.
The provision ins. 24B for enforcement of liability against the legal
representative of a deceased person to pay tax which would have
been payable if such person had not died, has a limited application.
The expression "tax which would have been payable under
this Act, if he had not died," ins. 24B is intended to impose liability
for tax on income · actually received or deemed fictionally to be
received in the year of account in the course of which the taxpayer died. This expression does not supply machinery for taxation of income receive1:1 by a legal representative after the expiry
of the year in the course of which such person died.
.
Commissioner of Income-tax Bombay v. 'Amarchand Shroff,
[1963] Supp. I S.C.R. 699 and Commissioner of Income-tax,
Bombay .. v: Ellis C. Reid. I.LR. 55 Born. 312, referred to.
(iii) To assess tax on such receipts after the expiry of the year
in the course of which the original owner died on the footing
that it is the personal income of the .. legal representative is to
charge tax not in accordance with the provisions of the Act.
•
•
592
SUPREME COURT REPORTS
[1964]
1963
CIVIL APPELLATE
JURISDICTION: Civil Appeal
No; · 128 of 1963.
Commissioner
of Income-tax
. Appeal by special Jeifte from the judgment· and
Bombay .
order ?ated September 21,"-~961 of the Bombay High
v.
Court m Income-Tax Reference No. 32 of.1959.
James Anderso

## Text

590
SUPREME COURT REPORTS
.
II!
[1964)
·~
...
1963
argument, in our opinion, is not well-conceived.
The whole object of the Act is to save ignorant people
Dr. Yash Pal from being duped to purchase medicines just because
Sahi
their effect is advertised in eloquent terms. That
v ·
is why the Act provides that lists of medicines describDelhi
ing the qualities and attributes of different medicines
Administration should be sent only to registered medical practitioners
--
or hospitals. That being so, it would not be a fair
Gqjendragadkar argument to urge that even though the appellant
J.
might have sent the list to a person who was not a
registered medical practitioner, the recipient of the
list should have been out on his guard and should
not have looked into the list. We are, therefore,
satisfied that the ·High Court was right in holding
that the offence charged against the appellant has been
duly proved. In regard to the sentence, the learned
Additional Sessions Judge has reduced the sentence
of Rs. 1,000 fine imposed on the appellant by the
learned trial Magistrate to Rs. 500 and that we
think is a fair order to make.
1963
December 2
In the result, the appeal fails, and is dismissed.
Appeal dismissed.
COMMISSIONER OF INCOME-TAX, BOMBAY
v.
JAMES ANDERSON
(A.K. SARKAR, M. HJDAYATULLAH AND J.C. SHAH, JJ.)
Income tax Act (XI of 1922), s. 24B-Scope of-Death of Shareholder-Liability of legal representative-Extent of.
G, a holder of certain shares of a private limited company
made a will disposing of his estate and died on May 13, 1945.
The respondent obtained Letters of Administration "durante
absentia" to the estate, and in pursuance of an agreement between
himself, the company and one M to sell the shares to M, handed
over the share certificates to M against payment of the price. M
failed to present the share certificates for registration and the name
i
,.
H .
'
•
.....
. ,
•
5 S.C.R.
SUPREME COURT REPORTS..
591 ..
of G remained on the register of shareholders of the Company.
1963
The Income-tax Officer made an order under s. 23Aofthe Income-tax
Act <:is it then stood) that certaL..'.··_ distributed part of the as_ses~- Commissioner of
able income of the company sha•r.~' deemed to have been distnIncome-tax
buted as dividend amongst the ·,.c-.• , holders as at the dates of the
Bo b
'
general meetings, vi.:., May :.~. 1947 and December 22, 1947.
m ay
The Income-tax Officer then .: .. ~ed a notice under s. 34(1) (b) to
v.
the respondent proposing to re-assess his income and calling upon James Anderson
him to file a return for the relevant year. The respondent sub-
'
milted a return, but did not include the dividend deemed to have
been distributed by the order passed under s. 23A The Income-tax
Officer included the dividends in the total income of the respondent
and levied tax. The respondent's appeals to the Appellate Assistant
Commissioner and the Income-tax Appellate Tribunal were unsuccessful. On reference, the High Court held that the assessment
made on the respondent Administrator to the estate of G (deceased)
was not valid in law. In appeal by special leave:
Held (i) The legal representative does ;;ot. acquire in all ·
cases, the right of a share-holder in respect of shares of which the
deceased was registered as holder. But ifthe estate of a share-holder
of a company is by. virtue. of the Articles of the Company liable
in respect of calls whether made during the life-time of the holder
or after his death,· the legal representative is obliged to satisfy
the calls in his representative character.
(ii) There is no special machinery devised by the Income-tax
Act enabling assessment and levy of tax in respect of such deemed
income from the estate of the share-holder, in the hands of his
legal representative when . the order of the Income-tax Officer
pursuant to which the income was to be deemed to be distributed
becomes effective was made after the death· of the share-holder.
The provision ins. 24B for enforcement of liability against the legal
representative of a deceased person to pay tax which would have
been payable if such person had not died, has a limited application.
The expression "tax which would have been payable under
this Act, if he had not died," ins. 24B is intended to impose liability
for tax on income · actually received or deemed fictionally to be
received in the year of account in the course of which the taxpayer died. This expression does not supply machinery for taxation of income receive1:1 by a legal representative after the expiry
of the year in the course of which such person died.
.
Commissioner of Income-tax Bombay v. 'Amarchand Shroff,
[1963] Supp. I S.C.R. 699 and Commissioner of Income-tax,
Bombay .. v: Ellis C. Reid. I.LR. 55 Born. 312, referred to.
(iii) To assess tax on such receipts after the expiry of the year
in the course of which the original owner died on the footing
that it is the personal income of the .. legal representative is to
charge tax not in accordance with the provisions of the Act.
•
•
592
SUPREME COURT REPORTS
[1964]
1963
CIVIL APPELLATE
JURISDICTION: Civil Appeal
No; · 128 of 1963.
Commissioner
of Income-tax
. Appeal by special Jeifte from the judgment· and
Bombay .
order ?ated September 21,"-~961 of the Bombay High
v.
Court m Income-Tax Reference No. 32 of.1959.
James Anderson .
N.D. Karkhanis, R.N. Sachthey and B.R.G.K. ·
Shah J.
Achar, -for ·the appellant.
·
-
.
, R.J. Kolah, J.B. Dadachanji, · 0.C. Mathur and
Ravinder Narain, for the respondent.
·
·
__
December 2, 1963. The Judgment of the Court
was delivered by
-
·
· SHAH, J.-Henry Gannon who was a registered
holder of 2674 shares of Gannon Dunkerley & Company-a private Limited Company with its registered
office in Bombay-died on May 13, 1945, having
made and published a will disposing of his extensive
· estate in the United Kingdom and in British India.
The .National Bank of India Ltd. obtained probate of
Gannon's will in the United Kingdom and appointed
the respondent James Anderson its attorney to administer the estate in British India. · Anderson applied
for and obtained in India on August 14, 1946, Letters
of Administration "durante absentia" to the estate
of Gannon in British India. 450 out of the shares
were· specifically·· bequeathed by Gannon to ·certain
legatees, and in the course of administration, share
certificates with transfer forms duly executed were
· delivered to the legatees in respect of those shares
and no question arises in this appeal in regard to
those shares. · ·
·
·
By ·agreement dated August 14, 1946, between
the executor to -the estate, the Company and one
Morarka, the executor agreed to ·sell -the remaining
2224 shares of the Company to Morarka and pursuant
thereto the relevant share certificates with transfer
deeds were handed over to Morarka on October 12,
1946, against payment of the price at the rate of Rs. 140
per share. Morarka, for some reason which is not
·clear from the record, failed to present the transfer
deeds and the share certificates for registration at
.I
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5 S.C.R.
SUPREME COURT REPORTS
593
the office of the Company and the name of Gannon
remained at all material times on the register of shareholders in respect of those 2224 shares.
1963
Commissioner
of Income-tax
In the assessment of the Company for the assessBombay
ment years 1946-47 and 1947-48 the Income-tax
v.
Officer, Bombay, made an order on March 26, 1953, James Anderson
under s. 23A of the Income-tax Act, 1922 (as it then
stood) that certain undistributed parts of the assessable income of the Company shall be deemed to have
been distributed as dividends .amongst the shareholders
as at the dates,. viz., May 26, 1947, and December
22, 1947, of the General Meetings of the Company.
The net dividends so deemed to be distributed m
respect of the shares were Rs. 61,051 and Rs. 3,73,099.
The Income-tax Officer then issued on March 28,
1953, a notice under s. 34(1)(b) of the Income-tax
Act addressed to
"James Anderson, Administrator
to the Estate of late Mr. Henry Gannon" reciting that
he had reason to believe that Anderson's "income
assessable to income-tax for the year ending 31st of
March 1949" had escaped assessment and that he
proposed to re-assess the escaped income and for
that purpose called upon Anderson to make a return
of his total income and the total world income assessable for the year ending March 31, 1949. In compliance with the requisition Anderson submitted a
return, but did not include therein the dividend
deemed to have been distributed under the order dated
March 26, 1953. The Income-tax Officer in his
order of assessment included dividends deemed to
be distributed and after processing the amount under
s. 18(5) included it in the total income of Anderson
and levied tax thereon at the appropriate rate. Anderson's appeals against the order of the Income-tax
Officer to the Appellate Assistant Commissioner and
to the Income-tax Appellate Tribunal, Bombay, were
unsuccessful.
At the instance of Anderson the
following
questions were referred by the Tribunal to the High
Court of Bombay . under s. 66(1) of the Income-tax
Act:-
1/SCI/64-38
Shah J,
1963
Commissioner
of Income-tax
Bombay
v.
James Anderson
Sarkar J.
594
SUPREME COURT REPORTS
[1964]
~
'*
..
"(l)Whether in the facts and in the circumstances
of the case the assessment made on Mr. James
Anderson, Administrator to the estate in India
of Mr. Henry Gannon (deceased) is valid in law?
If the above question is answered in the affirmative (2) whether in the facts and in the circumstances of the case the dividends of Rs. 61,051 and
"Rs. 3,73,099 deemed to have been distributed
on 26th Mav 1947 and 22nd December 1947 respectively under s. 23A of the Income-tax Act
were assessable in the hands of the applicant?"
The High Court answered the first question in the
negative and declined to answer the second question.
With special leave, the Commissioner of Incometax, Bombay, has appealed to this Court.
The estate of Gannon to which the Letters of
Administration relate, vested by virtue of s. 211 of
the Indian Succession Act, in Anderson, but he did
not take steps to get his name entered in the register
of shareholders maintained by the Company,· and the
Income-tax Officer sought to tax the dividends deemed
to have been distributed in the hands of Anderson
as administrator of the estate of Gannon. The order
made by the Income-tax Officer under s. 23A gives
rise to a notional income: it merely creates a fiction
about distribution and consequential receipt of dividend. The order by its own force however does not
charge the income to tax: it has to be followed by an
order of assessment to make tax on such income
exigible.
The sole question in this appeal is whether the
Act contains
machinery for
assessing dividends
deemed to have been distributed by virtue of an
order under s. 23A in respect of the shares held by
a shareholdef, when before the date on which the
fiction of distribution becomes effective-viz., the
date of the relevant General Meeting of the Company
-the registered shareholder has died and his representatives have not been substituted in the register of
the Company.
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'
•
5 S.C.R.
SUPREME COURT REPORTS
595
It was held by this Court in Commissioner of
1963
Income-tax, Bombay City II v.
Shakzmtala and
others(1l following Howrah Trading Company Ltd. v. Commissioner
Commissioner of Income-tax,
Central
Calcutta(2) of Income-tax
that the expression "shareholder" in s. 23A of the
Bombay
Indian Income-tax Act, 1922, means a shareholder
v.
registered in the books of the company, and such James Anderson
shareholder alone is liable to be taxed in respect of
the dividend deemed to be distributed. Counsel for
Shah J.
the Commissioner submits that the principle of those
cases applies only when the registered share-holder
is alive and the beneficial ownership in the shares
is vested as a result of some transaction inter vivos
in a person in whose name the shares do not stand
in the Company's register, but not where by the grant
of representation to the estate of a
registered
shareholder who has died, the representative is invested, without his name being entered in the register,
with the rights of the shareholder.
Whether on the death of a shareholder his executor
or administrator may enforce the rights of the shareholder or incur liability in respect of the shares to the
Company, depends upon the nature of the right
and the obligation, and terms of the statute and the
articles of the Company which create those rights
and obligations. The legal representative of a deceased
person cannot vote on behalf of the shareholder and
may not become a director of the Company on the
strength of the
representation alone. Again by
the express provision contained in s. 35 of the Indian
Companies Act, 1913, a transfer of the share or other
interest of a deceased member by his legal representative although he is himself not a member is as valid
as if he were a member at the time of the execution
of the transfer.
This implies that the legal representative does not acquire in all cases the rights of
a shareholder of a company in respect of shares
of which the name of the deceased was registered as
holder. But if the estate of a shareholder of a com-
(I} 43 I.T.R. 352.
(2) 36 I.T.R. 215.
596
SUPREME COURT REPORTS '
[1964]
pany is by virtue of the Articles of the Company
liable in respect of calls upon shares whether made
Commissioner during the life-time of the holder or after his death,,
of Income-tax the legal representative is obliged to satisfy the calls
Bombay
in his representative character. This obligation arises
1963
v.
not because the legal representative becomes, by
James Anderson virtue of probate or Letters of Administration, a
ShahJ.
shareholder in place of the person whose estate is
vested in him, but because as a representative it is
his duty to ·discharge the obligations enforceable
against the estate.
Under an order made by the Income-tax Officer
under s. 23A of the Indian Income-tax, 1922, dividend
is deemed to be distributed among the shareholders
and by the express provision contained in the statute
the proportionate share of the dividend of each shareholder has to be included in the total income of such
shareholder for the purpose of assessing his total
income. The statute therefore in terms applies to
the shareholder and makes the dividend taxable
as his income. The obligation to pay the tax on the
dividend so deemed to be distributed is of the shareholder, and may be enforced against him or his legal
representative in the manner and to the extent the
statute permits. There is no
special
machinery
devised by the Income-tax Act enabling assessment
and levy of tax in respect of such deemed income
from the estate of the shareholder in the hands of
his legal representative when the order of the Inco:riJ.etax Ofucer pursuant to which the income was to
be deemed to be distributed becomes effective was
made after the death of the shareholder, and the general
provision in s. 24B for enforcement of liability against
the legal representative of a deceased person to pay
tax which would have been payable if such person
had not died, has a limited application.
Jn Commissioner of Income-tax Bombay v. Ellis
C. Reidel> it was observed by the Bombay High
Court in rejecting the claim made by the Incometax Department to assess a deceased person's estate
(I) l.L.R. 55 Born. 312: 5 I.T.C. 100.
•
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5 S.C.R.
SUPREME COURT REPORTS
597
in the hands of his legal representative to tax, that
1963
the definition of "assessee" in s. 2(2) of the Indian Income-tax Act, 1922 (as it stood at the material date) Commissioner
in terms only applied to a living person, the words of Income-tax
being "a person by whom income-tax is payable"
Bombay
and not "a person by whom or by whose estate incomev.
tax is payable", and in the absence of appropriate James Anderson
provisions for collecting tax from the estate of a
·
deceased person in the Act, the claim of the IncomeShah J.
tax Officer to make an assessment under s. 23(4)
must fail. The Court also observed that throughout
the Income-tax Act there is no reference to the decease
of a person on whom the tax had been originally
charged, and it was difficult to suppose that the omis·
sion was unintentional. In Reid's casell> the tax
payer had died after the commencement of the financial
year but before the income of the previous year was
assessed, and it was held that the executors under
the will of the tax-payer were not liable to pay tax
on receipt of income due to the deceased, notwithstanding that he died while assessment proceedings
were pending, because the proceedings could not
be continued and the assessment could not be made
after the tax-payer's death.
To rectify the lacuna in the machinery of assessment the Legislature enacted s. 24B, by the Indian
Income-tax (Second Amendment) Act, 18 of 1933.
The first sub-section of s. 24B provided:
"Where a person dies, his executor, administrator
or other legal representative shall be liable to
pay out of the estate of the 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 this Act ifhe had not died."
In interpreting that enactment this Court held in a
recent case: Commissioner of Income-tax, Bombay
City I v. Amarchand Shroff<•> that by the incorporation of s. 24B the Legislature has extended the
legal personality of a deceased person for the duration
(1) 1.L.R. 55 Born. 312: 5 I.T.C. 100.
(2) 48 I. T. R. 59.
598
SUPREME COURT REPORTS
[1964]
1963
of the entire previous year in the course of which
he died, and therefore the income either received
Commissioner by him before his death or by his heirs and
of Income-tax representatives after his death in that previous year
Bombay
becomes assessable to tax in the relevant assessment
v.
year, but not the income received in the year subsequent
James Anderson to the previous or account year. In Amarchand
"=
Shrojf's case<lJ, 'A' who was a partner in a firm of
Shah 1·
solicitors which maintained accounts "on cash basis"
died on July 7, 1949. Outstandings of the firm in
respect of professional services rendered prior to
the death of 'A' were realized during five years subsequent to 'A's death and were divided between the
partners of the firm and certain sums were paid to the
heirs and legal representatives of 'A' as his share.
The Income-tax Department sought to assess the
amounts received by the legal representative of
'A' as his share to tax under s. 34(1)(b) read with
s. 24B. It was held that s. 24B did not authorise the
levy of tax on receipts by the legal representative of
a deceased person in the years of assessment succeeding the year of account in which such person died and
accordingly the income received by him before his
death and that received by his heirs and legal representatives after his death in that previous year became
assessable to income-tax in the relevant assessment
year, but not receipts by the legal representatives
after the expiry of the account year in which 'A' died.
In the case before us Gannon died in May 1945,
and the dividend in respect of which orders under
s. 23A were passed was deemed to be distributed
in the year of account ending March 31, 1949. The
legal personality of Gannon as held in Amarchand
Shroff's case(lJ came to an end for the purpose of
s. 24B at the end of the account year in which Gannon
died and no tax could be levied under s. 24B on the
dividends deemed to have been received by him or
his legal representatives after the end of that year.
Counsel for the Commissioner sought to rely on the
following observations made by Kapur, J, who spoke
for the Court in Amarchand Shroff's case<n (at p. 67):
(I) 48 I.T.R. 59.
I
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I
5 S.C.R.
SUPREME COURT REPORTS
599
"In the present case the amounts which are
1963
sought to be taxed and which have b~en held
-. -.
not to be liable to tax are those which were Commisswner 01
not received in the previous year and are thereIncome-tax
fore not liable to tax in the several years of assessBombay
ment. It cannot be said that they were income
. v.
which may be deemed by fiction to have been James Anderson
received by the dead person and therefore they are
not liable to be taxed as income of the deceased,
Amarchand, and are not liable to be taxed in the
hands of the heirs and legal representatives who
cannot be deemed to be assessees for the purpose
of assessment in regard to those years",
and on the latter part of the opinion sought to raise
two arguments (1) that even if after the expiry of the
year of account receipts which if the person earning
had not died would have been treated as his income,
ceased to be liable to assessment as income of the
deceased, they could still be taxed as his income
in the hands of the legal representatives and (2) that
where the income was notional as under s. 23A the
legal personality of the deceased must be regarded as
extended to the end of the year in which such notional
income must be deemed to have been received by the
legal representatives of the deceased. The first argument is plainly inconsistent with what was decided in
Amarchand Shroff's case< 1l. In that case the Court
held that the receipts by the heir or legal representative
for professional services rendered by the deceased
solicitor were liable to be brought to tax in the hands
of the legal representatives only to the limited extent
permitted bys. 24B. The second argument involves the
importation into the expression "deemed by fiction
to have been received" a concept which was wholly
alien to what was decided by the Court, for in
Amarchand Shroff's caseC 1 ) the Court was dealing
not with a fiction of distribution by an order under
s. 23A of dividends which never reached the shareholder or his legal representative, but to a fiction of
receipt by a deceased person of income by extending
(1) 48 I.T.R. 59.
Shah J.
600
. SUPREME COURT REPORTS
[1964)
1963
his legal personality. Section 24B does not warrant
--
the application of two different interpretations in
Commissioner of the matter of extension of the legal personality of
Income-tax
the deceased according as the income is actual or
Bombay
notional. Section 24B in terms refers to the liability
v.
of the legal representative to pay tax assessed as
Jc mes Ar.derson payable by such deceased person, or any tax which
-
would have been payable by him under the Act if
Shah J.
he had not died, and ifthe expression "tax which would
have been payable under this Act, if he had not died"
is intended to impose liability for tax on income
received in the year of account in the course of which
the tax-payer died, a different interpretation of the .
same expression in the context of notional· income
would be impermissible. The Legislature not having .
made any provision generally for assessment of income receivable by the estate of the deceased person,
the expression . "any tax which would have been
payable by him under this Act if he had not died"
cannot be deemed to have supplied the machinery
for taxation of income received by a legal representative to the estate after the expiry of the year in the
course of which such person died.
It was then urged that apart from s. 24B, the legal
representatives of a deceased person also represent
his estate in the matter of taxation of income and
it is competent to the ·taxing authorities to assess
them on income received on behalf of the estate.
Counsel did not rely upon any specific provision of
the Act in support of the contention, and merely
asserted that the Act seeks to tax all assessable incomes, and income received by a legal representative.
of the estate of a deceased person should not be
permitted to escape tax to the detriment of public
revenue. But if the Legislature has failed to set
up the procedure to assess such income, the Courts
cannot supply it.
The expression "assessee" in
s. 2(2) as substituted by the Indian Income-tax (Amendment) Act, 25of1953, with effect from April 1, 1952,
means a person by whom income-tax or any other
sum of money is payable under the Act, and includes
J
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.,
- J ; .
' }
' i
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~J
t J
5 S.C.R.
SlJPREME COlJRT REPORTS
601
every person in respect of whom any proceeding under
this Act has been taken for the assessment of his income
1963
or of the loss sustained by him or of the amount Commissioner of
of refund due to him.
By s. 3 where income-tax
Income-tax
is chargeable for any year at any rate or rates presBombay
cribed by the Act of the Central Legislature, tax
v.
at that rate shall be charged for that year in accordance James Anderson
with and subject to the provisions of the Act in respect
of the total income of the previous year of every
individual, Hindu undivided family, company and local
authority, and of every firm and other association of
persons or the partners of the firm or the members of
the association individually. The charge to income-tax
has therefore to be in accordance with and subject
to the provisions of the Act, and the Legislature
has not provided that the income received by a legal
representative which would, but for the death of
the deceased, have been received by such deceased
person, is to be regarded for the purpose of assessment as the personal income of the legal representative.
To assess tax on such receipts on the footing that it
is the personal income of the legal representative
is to charge tax not in accordance with the provisions
of the Act.
We therefore agree with the High Court, though
for somewhat different reasons. The appeal therefore
fails and is dismissed with costs.
Appeal dismissed.
Shah J.