A legal representative of a deceased person, who is assessed in respect of the total income of the latter person, as if he were the assessee, is an assessee within the meaning of S. 46(1) of the Indian Income-tax Act and is liable to pay the penalty for default in payment of tax.

Judgment

HIDAYATULLAH, J. : Whether the legal representative of a deceased person, who is assessed in respect of the total income of the latter person, as if he were the assessee, can be ordered to pay a penalty under S. 46 (1) of the Indian Income-tax Act is the short question that arises in this appeal.

2. One Ebenezer died intestate on November 22, 1945, during his year of account which ended on March 31, 1946. He left behind him the respondent, E. Alfred, his son, and eight daughters. For the assessment year, 1946-47, the respondent was assessed under S. 248(2) of the Income-tax Act, after a notice was issued to him under S, 22(2), ibid. The assessment was completed on March 26, 1951, and a notice of demand was issued under S. 29 of the Act. The respondent appealed against the order of assessment to the Appellate Assistant Commissioner, but during the pendency of the appeal, a penalty of Rs. 250 was imposed upon him under S. 46(1) of the Act by the Income-tax Officer, as he had defaulted in payment of tax on the due date. After the appeal was disposed of with very minor modifications, a notice of demand was again issued to him to pay the tax on or before December 15, 1951. On his default, a second penalty of Rs. 10,000 was imposed upon him on March 8, 1952. The respondent then filed a petition under Art, 226 of the Constitution in the High Court of Madras challenging the imposition and levy of penalty imposed upon him. The High Court held in is favour, and quashed the two orders imposing penalty, but granted a certificate of fitness to appeal to this Court. This appeal was then filed.

3. In reaching the conclusion that S. 46(1) of the Act did not apply to a legal representative, the learned Judges of the High Court held that a legal representative could not be said to be included within the words of that sub-section "when an assessee is in default in making a payment of income-tax" because of the scheme of the Act, particularly S. 29, where a distinction is made between "an assessee" and "other person". According to the learned Judges, a legal representative is assessed as an assessee under a fiction in S. 24B (2), and that fiction, comes to an end when the computation of the tax or, in other words, the assessment is made. The learned Judges drew a distinction between the three sub-sections of S. 24B, and pointed out that sub-s. (1) only created a liability on the legal representative for collection of tax but, did not refer to him for that purpose as an assessee and sub-s. (3) which did not concern itself with collection, did not refer to the legal representative as an assessee, and held that the fiction in sub-s. (2) was created for the limited purpose of assessment, and since that sub-section also did not concern itself with collection, the fiction could not be carried beyond assessment resulting in the determination of the tax. Thereafter, according to the High Court, the legal representative is not an assessee within the meaning of S. 29, but can only be brought under the words "other person", and inasmuch as Ss. 45 and 46 refer to "an assessee in default", the legal representative cannot be treated as such and no penalty can either be imposed upon him or recovered.

4. We are concerned with the definition of "assessee" before its amendment in 1953. That definition read as follows :

assessee" means a person by whom income-tax is payable".

The generality of this definition is sufficient to include even a legal representative who is to pay the tax, though out of the assets of the deceased person. Section 24B which makes a legal representative liable, it as follows :

"24B. (1) 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 if he had not died.

2. Where a person die