Executor-based estate taxation applies where probate is rejected on technical grounds and the will remains operative.

A rejected probate application on technical grounds does not extinguish the will or shift the deceased's estate into the natural heir's individual hands. Section 213 of the Indian Succession Act bars proof of rights under a will without probate or letters of administration, but it does not apply where the issue is tax assessment rather than assertion of testamentary rights. Section 211 treats the executor as the legal representative, and section 168 of the Income-tax Act requires the estate of a deceased person to be assessed in the hands of the executor separately from the executor's own income. The estate could not be clubbed with the assessee's individual income, so the assessment had to be made against the executors.

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Issues: Whether, when probate of a will is rejected on technical grounds, the estate of the deceased is to be assessed in the hands of the executor under the Income-tax Act or treated as having devolved on the natural heir; whether section 213 of the Indian Succession Act, 1925 bars such assessment; and whether the income of the deceased's estate could be clubbed with the individual income of the assessee.

Analysis: Section 213 of the Indian Succession Act, 1925 bars the establishment of rights under a will without probate or letters of administration, but that provision does not apply where the issue is not assertion of a right under the will. Section 211 of the Indian Succession Act, 1925 makes the executor the legal representative for all purposes and vests the deceased's property in the executor. Section 168 of the Income-tax Act, 1961 specifically directs that the income of the estate of a deceased person be assessed in the hands of the executor, separately from the executor's own income, and where there are more executors than one, the assessment is to be made as in the case of an association of persons. A rejected probate application on technical grounds does not extinguish the will, and the estate cannot be clubbed with the individual income of the executor.

Conclusion: The assessment of the deceased's estate had to be made under section 168 of the Income-tax Act, 1961 in the hands of the executors, and not in the individual hands of the assessee; the answers to the referred questions were therefore in favour of the assessee.

Final Conclusion: The reference was answered by holding that the will remained operative despite the technical rejection of probate, the executor was the proper representative for tax assessment, and the impugned additions could not be sustained.

Ratio Decidendi: Where a will has not been invalidated and probate is refused only on technical grounds, the deceased's estate is assessable in the hands of the executor under section 168, and the property cannot be treated as devolving on the executor in an individual capacity as natural heir.

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