Section 168 applies only to testate estates, not intestate succession, under a context-based reading of executor.

Section 168 of the Income-tax Act, 1961 was construed as applying only to income from the estate of a deceased person who died testate. The court read the provision's placement, its references to executors, beneficiaries and specific legatees, and the Explanation extending "executor" to an administrator or other person administering the estate as pointing to administration under a will. It held that executor and administrator are distinct concepts under the Indian Succession Act, and that the extended definition was intended to cover de facto administrators of testate estates, not all persons dealing with intestate property. The contrary argument based on intestate succession was rejected, and section 168 was held inapplicable to intestate estates.

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Issues: Whether section 168 of the Income-tax Act, 1961 applies only to the income of the estate of a deceased person who died testate, or whether it also extends to the estate of a person who died intestate.

Analysis: Section 168 is placed under the heading relating to executors, charges the income of the estate of a deceased person in the hands of the executor, contemplates distribution to beneficiaries and specific legatees, and the Explanation extends the expression "executor" to an administrator or other person administering the estate. Reading the provision with the Indian Succession Act, the Court held that executor and administrator are distinct concepts, and that the extended definition was intended to cover de facto administrators of testate estates, not every person dealing with an intestate estate. The scheme, setting and language of the provision, including the references to beneficiaries and specific legatees, showed that the provision was framed for estates governed by a will. The contrary approach based on unity of possession in intestate succession was rejected as not being the proper test.

Conclusion: Section 168 of the Income-tax Act, 1961 is confined to estates of deceased persons who died testate and does not apply to intestate estates.

Final Conclusion: The extended definition of "executor" was held to be limited to de facto administrators of testate estates, and the reference was answered against applying section 168 to intestate succession.

Ratio Decidendi: The expression "executor" in section 168, including the Explanation, must be construed in the statutory context as confined to administration of a testate estate and cannot be extended to all undistributed intestate estates.

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